Context:

Goa has become the 6th State in the country to successfully undertake Urban Local Bodies (ULB) reforms stipulated by the Department of Expenditure, Ministry of Finance.

ULB Reforms

• Reforms in the Urban Local Bodies and the urban utility reforms are aimed at financial strengthening of ULBs in the States and to enable them to provide better public health and sanitation services.
• Economically rejuvenated ULBs will also be able to create good civic infrastructure.
• The reforms stipulated by the Department of Expenditure to achieve these objectives are:

The State will notify

• floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (i.e. guideline rates for property transactions)
• floor rates of user charges in respect of the provision of water supply, drainage, and sewerage which reflect current costs/ past inflation.

The State will put in place a system of periodic increases in floor rates of property tax/ user charges in line with price increases.

Citizen centric areas of reforms

• The States get permission to raise additional funds equivalent to 0.25 percent of GSDP on completion of reforms in each sector.
• The four citizen-centric areas identified for reforms were
  • Implementation of One Nation One Ration Card System
  • Ease of doing business reform
  • Urban Local body/ utility reforms
  • Power Sector reforms.

Progress of these Citizen-Centric Areas so far:

• 10 States have implemented the One Nation One Ration Card System.
•  7 States have done ease of doing business reforms
• 4 States have done local body reforms Total additional borrowing permission issued so far to the States who have done the reforms stands at Rs.54,265 crore.

The benefit of ULB Reforms

• Goa has joined five other States namely, Andhra Pradesh, Madhya Pradesh, Manipur, Rajasthan, and Telangana, who have completed ULB reforms.
• Goa has become eligible to mobilize additional financial resources of 75 crore rupees through Open Market Borrowings. Each state can mobilize different amounts.