5.8. Challenges related to ULBs

• Use of discretionary power by states: The act made some of its provisions mandatory and others discretionary. States have used the discretionary power in favour local political consideration, sometimes, against the spirit of the act. Since acts do not provide uniform parameters for delineation of local bodies, Very large settlements are still dubbed as villages and smaller ones are converted into towns.

• Political patronage: At the ward level, the Act desired the induction of individuals of knowledge and experience in local governance. However, this became a means of providing refuge to party functionaries or those who were unable to win elections.

• Status of Mayor: The act is silent on the status of the mayor. There is wide variation in the manner of elections of Mayors. They could be in office for one year, or two, or five; they could be directly or indirectly elected; and they could have some powers or fulfil a purely ceremonial role.

• Lack of devolution of power: Since, the powers and responsibilities of the ULBs are to be decided by state, states have devolved nominal functional authority to ULBs, in effect, making them dysfunctional.

• Finances: The recommendations of State Finance Commission’s for financial devolution to municipalities, have not led to any substantive transfer of resources to ULBs. The recommendations of the SFCs have largely been ignored at the state level, as states themselves reel under severe financial crunch.

• Passage of GST: GST has made the financial position of ULBs even more precarious. On the one hand, GST is silent on the financial share of ULBs; on the other, it has subsumed many of the local taxes.