Latest news with #ULGs
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Business Standard
6 days ago
- Business
- Business Standard
CAG, Janaagraha sign MoU to strengthen ULG finances, digital audits
The five-year non-financial partnership aims to improve transparency, audit quality, and financial management in India's urban local governments through digital reforms Droupathi Mahalakshmi M Sharanya India's cities are urbanising at a rapid pace, yet urban local governments (ULGs) continue to struggle with financing and governance. According to PRS Legislative Research, India's Urban Local Bodies (ULBs) rank among the weakest globally in fiscal autonomy, with limited devolution of revenue powers. Varshith, public policy research lead at the Foundation for Democratic Reforms, noted: 'As local governments in India are a state subject, it is primarily the duty of the state to ensure that ULGs maintain accounts and conduct audits as prescribed by law. Most states have entrusted the audit responsibility to the Comptroller and Auditor General (CAG). However, the CAG is already burdened with Union and state-level audits. As a result, the financial scrutiny of ULGs is often neglected.' A strategic partnership for accountable cities To address this gap, the Janaagraha Centre for Citizenship and Democracy, a non-profit trust focused on transforming urban governance, and the Office of the CAG of India signed a five-year, non-financial Memorandum of Understanding (MoU) on April 8, 2025, in New Delhi. The MoU was signed by Subir Mallick, Deputy CAG (Local Government Audit), and Srikanth Viswanathan, CEO of Janaagraha. The partnership aims to strengthen accountability mechanisms and improve financial management in ULGs, thereby enhancing service delivery and enabling Indian cities to contribute more effectively to national development. Prabhat Kumar, Head of Public Finance at Janaagraha, said, 'This engagement aims to strengthen accountability systems and improve financial management in ULGs, which would ultimately result in improved governance and service delivery.' Reviving the municipal accounts manual A key initiative under this partnership is the development of a revised, digital-first National Municipal Accounts Manual (NMAM 2.0). 'Under this new partnership, the CAG will lead efforts to update the NMAM, making it natively digital,' said Kesavan Srinivasan, Senior Adviser at Janaagraha. 'With our experience from the CityFinance portal and public finance work across states, we are confident this effort will mark a paradigm shift in analysing ULG finances.' The collaboration seeks to combine CAG's constitutional authority and audit expertise with Janaagraha's experience in digital public finance management, policy reform, and civic engagement. The broader vision includes stronger audit systems, transparent data ecosystems, and actionable municipal financial insights. Towards systemic reform The 74th Constitutional Amendment Act (1992) gave municipalities constitutional status and empowered states to create systems for their operation and finances. Yet, the actual transfer of powers and resources remains slow, and financial management continues to be a critical bottleneck. Janaagraha's roadmap for city-systems reform calls for digital finance management, cadre and recruitment reforms, and stronger state capacity in municipal finance—all areas where the CAG's technical guidance is seen as essential. The road ahead The five-year collaboration marks a pivotal moment in addressing the chronic challenges of transparency and accountability in urban governance. By aligning their respective expertise, the CAG and Janaagraha aim to improve how Indian cities are funded, audited, and held accountable. However, experts remain cautious. 'While it is a welcome move that the CAG is taking ULG audits seriously, I feel the additional workload could compromise turnaround times. The CAG's human resource capacity should be enhanced to publish state audit reports faster,' said Varshith. Looking ahead, the success of this initiative will depend on timely audits, implementation of recommendations, and the translation of digital and structural reforms into measurable improvements in urban service delivery and citizen participation.
The Print
09-07-2025
- Politics
- The Print
India's mayors have no power to lead cities. They need to be like CEOs
India's mayors are denied even basic executive functions. They cannot plan holistically, approve budgets, hire or supervise staff, or direct civic authorities. According to the CAG , urban local governments (ULGs) headed by mayors on average have no control over 75 per cent of the powers constitutionally devolved to them. Many mayors, as in Maharashtra, Karnataka, and Himachal Pradesh, hold office only for 12–30 months. State-appointed municipal commissioners often exercise real control in ULGs. This, coupled with the multiplicity of state-controlled agencies like development authorities, utility companies, and infrastructure SPVs, reduces mayors to mere figureheads. In most Indian cities, the average citizen is more likely to know the name of the municipal commissioner than that of the elected mayor. A 2022 survey by Janaagraha found that fewer than two out of 10 Bengaluru residents could name the last mayor. This is not surprising, given that elected mayors lack both the authority and visibility they deserve as leaders at the first mile. Their roles are dwarfed by higher-level leaders like MPs and MLAs. From President Droupadi Murmu, Jawaharlal Nehru, Subhas Chandra Bose, to Vallabhbhai Patel, several of India's well-known leaders began their public service careers as heads of municipal governments. The list also includes Chief Ministers like MK Stalin, K Chandrashekar Rao, Bansi Lal, BC Roy, Jagannath Mishra, Manohar Joshi, and D Devaraj Urs. Nearly 90 sitting MPs have served in local governments. Yet the office of the mayor remains weak and largely ceremonial, lacking the attention and authority needed to effectively lead cities in the 21st century. The weakened position of mayors leads to poor governance — marked by fragmented planning, duplication of efforts, delayed project implementation, resource wastage, and weak accountability. This ultimately diminishes the quality of life and ease of doing business in cities. Globally, empowered mayors and local governments deliver better outcomes. In developed countries like the US, UK, France, Germany, Japan, and South Korea, directly elected mayors lead city transformation. Developing nations such as Brazil, Mexico, Indonesia, Colombia, and even China have vested substantial authority in city leadership. India's vision of becoming a developed nation hinges on empowered urban leadership. Cities contribute over 65 per cent of GDP and house more than 30 per cent of the population. Reforms are urgently needed to position mayors as CEOs of cities with clear authority, drawing from Indian and global best practices. Also read: India is letting the AI revolution bypass the country. It may have to pay a heavy price Need for reforms First, we must adopt a cabinet form of government for cities, akin to those at the union and state levels. This includes five-year mayoral tenures and a Mayor-in-Council (MIC) system, where select councillors manage portfolios like finance, sanitation, transport, and health. India's largest cities, including New Delhi, Mumbai, and Bengaluru, have mayoral tenures of less than five years and outdated governance models. Meanwhile, states like Chhattisgarh and West Bengal follow the MIC system. Evaluating this alongside the directly elected mayor model in place in Madhya Pradesh, Odisha, and Jharkhand, can inform improvements to strengthen the office of mayor. Second, the mayor must have the highest executive authority in the city. Municipal commissioners should function like secretaries (just as the cabinet secretary at the union level and the chief secretary at the state level) — appointed by and reporting to the mayor, and accountable to the elected council. Parastatal agencies must come under mayoral supervision and council oversight to ensure democratic accountability. Third, loopholes in electoral processes must be tightened. Only 40 per cent of ULGs across the 17 states audited by the CAG had elected councils. This is largely due to the discretionary powers of state governments in ward delimitation and reservation. State Election Commissions, therefore, must be empowered to oversee the entire electoral process, including ward delimitation and reservation, and elections for indirectly elected mayors. Anti-defection laws for ULGs, such as those adopted by Kerala, Odisha, and Karnataka, may be suitably adapted to ensure stability in the position of mayor. Fourth, mayors and councils should be installed within 15 days of the declaration of election results. At present, delays may extend for months. In Karnataka, delays averaged 11 months for city corporations. To keep state executive excesses under check, the power to dissolve councils should rest with the legislature, not the state government. Any suspension or supersession must be limited to six months unless ratified by the state assembly, similar to the President's Rule imposition in states. Fifth, mayors and councillors shoulder significant responsibilities as first-mile elected leaders but receive a token honorarium of Rs 3,000 a month or less. Forty-six per cent of councillors in India are estimated to be women, and many belong to weaker sections of society. While a few states like Tamil Nadu and Maharashtra have increased monthly mayoral allowances to Rs 30,000, parity with MLAs and MPs — whose allowances range from Rs 1.5–2.5 lakh — is needed. Adequate financial support, trained staff, research capacity, and continuous training are essential to attract and retaining better talent for city leadership. National and state-level mayoral forums must be promoted for peer learning, as it's done in states like Kerala. Finally, vibrant citizen engagement through participatory budgeting and planning led by mayors and councillors must be embedded in urban governance. Ward committees, constitutionally mandated for larger cities, are mostly defunct. These, along with area sabhas, should be operationalised in all urban areas. Many of these reforms must be enshrined in the Constitution by overhauling the 74th Amendment (Part IX-A), shielding them from political interference. Others should be integrated into state laws and operational practice. Only empowered executive mayors will be able to lead the urban transformation essential to India's development goals. Santosh Nargund is Director, Policy Engagement, Janaagraha. He tweets @nargundsantosh1. Views are personal. (Edited by Ratan Priya)
Hindustan Times
01-06-2025
- Politics
- Hindustan Times
India's cities deserve more than token decentralisation
The 74th Constitutional Amendment Act (CAA) that came into force on June 1, 1993, promised to institutionalise democratic decentralisation in India's cities. When the Bill was presented in Parliament in 1991, the statement of objects acknowledged that many Urban Local Governments (ULGs) had become weak and ineffective due to irregular elections, prolonged supersession, and inadequate devolution of powers. India's municipal governance journey dates back to 1687 with the formation of the first municipal corporation in Madras (now Chennai). The 74th CAA promised empowered, accountable, and participatory city governments by granting them constitutional status and establishing a national governance. Over three decades later, that promise remains fulfilled more in letter than in spirit. In hindsight, the 74th Amendment addressed a historic backlog more than it offered a forward-looking blueprint. It fell short of anticipating the institutional demands of large cities in a liberalising economy. A landmark audit on the implementation of the 74th CAA across 18 states by the Comptroller and Auditor General (CAG) of India found that, on average only four of the 18 (<25%) functions mandated under the Constitution have been fully devolved to ULGs. Over 60% ULGs lacked elected councils. State Finance Commissions were delayed by 412 days on average. ULGs face a 65% shortfall in per capita spending, and a 42% resource-expenditure gap. Citizen engagement in planning and budgeting is minimal, with ward committees largely defunct. Meanwhile, Union and state governments continue to dominate urban development through schemes and parastatals, bypassing elected councils; 72% of urban infrastructure is financed by Union and state governments. ULGs lack control over core functions like planning, water supply, sanitation, housing, and transport. In many cities, even Group D staff appointments require higher-level approval. ULGs have been reduced to extensions of state governments. The consequences are visible: Water shortages, crumbling streets, flooded neighbourhoods, choked roads, overcrowded transport, and a deteriorating environment. India can no longer afford a business-as-usual approach to urban governance. To change the status quo, we must move beyond token acknowledgements of the 74th Amendment's limited achievements. A reform strategy must be structured around three components: Measure, Map, and Mandate. Measure: The Union ministry of housing and urban affairs (MoHUA) lacks a comprehensive assessment of urban decentralisation. Until the CAG audits began in 2020, there was no authoritative data of the 74th Amendment implementation. In contrast, the ministry of Panchayati Raj has conducted seven assessments since the 73rd CAA and tracks panchayat performance via a Panchayat Development Index. MoHUA and state Urban Development Departments (UDDs) must build capacity to measure and monitor decentralisation in real-time, linking data to reform-oriented grants and programmes. Map: Roles and responsibilities across all levels of government and civic agencies must be clearly mapped and harmonised. States must relinquish excessive control and empower ULGs with policy, finance, knowledge and human resources. Elected councils and mayors must have democratic oversight over all agencies operating in their cities. Mandate: The Centre must initiate a second wave of constitutional reforms to strengthen the 74th CAA — closing existing loopholes and future-proofing decentralisation. This includes differentiated governance models for metros, and emerging and small cities; guaranteed devolution of functions; time-bound elections; empowered ward committees and area sabhas; and fiscal decentralisation through stable revenue streams and formula-based transfers. The amendment must specify mayoral tenures, delimitation and reservation timelines, revenue entitlements, and citizen forums definitively. The 74th Amendment was a constitutional promise. It's time we honour it. Santosh Nargund is head of participatory governance at Janaagraha Centre for Citizenship and Democracy. The views expressed are personal
