5.9. 2nd ARC recommendation on Urban governance

♤ The functions of chairing the municipal council and exercising executive authority in urban local government should be combined in the same functionary i.e. Chairperson or Mayor.

o The Chairperson/Mayor should be directly elected by popular mandate through a city- wide election.

o The Chairperson/Mayor will be the chief executive of the municipal body. Executive power should vest in that functionary.

♤ The following principles should be followed while administering all taxes:

o The manner of determination of tax should be made totally transparent and objective;

o As far as possible, all levies may be based on self-declaration of the tax payer but this should be accompanied by stringent penalties in case of fraud or suppression of facts by the tax payer

o There should be an independent unit under the Chief Executive to monitor the collection of all taxes; and

♤ The capacity of the municipalities to handle legal and financial requirements of responsible borrowing must be enhanced.

o The limits of borrowings for various municipal bodies in a State may be fixed on the recommendation of the SFC.

o Municipal bodies should be encouraged to borrow without Government Guarantees.

♤ Land banks available with the municipalities as well as with the development authorities should be leveraged for generating resources for the municipalities. However, such resources should be used exclusively to finance infrastructure and capital expenditure and not to meet recurring costs.

♤ Citizens’ charters in all Urban Local Bodies should specify time limits for approvals relating to regulatory services such as licenses and permits and these should be scrupulously adhered to. The charter should also specify the relief available to the citizens in case of non- adherence.

♤ Municipal governments should have full autonomy over the functions/ activities devolved to them. If the State Government feels that there are circumstances that make it necessary to suspend or rescind any resolution passed by the Urban Local Bodies or to dissolve or supersede them, it should not do so unless the matter has been referred to the concerned local body Ombudsman and the Ombudsman recommends such action.