Madhya Pradesh has taken the lead in undertaking the Urban Local Bodies (ULB) reforms. MP along with Andhra Pradesh has successfully completed the set of reforms in functioning of ULBs, as specified by the Department of Expenditure, Ministry of Finance. To motivate the States to undertake reforms in various citizen centric sectors, the Ministry of Finance has linked a part of additional borrowing permission granted to the States to completion of reforms.
It may be noted that in view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17th May, 2020 enhanced the borrowing limit of the States by 2 percent of their Gross States Domestic Product (GSDP).
Half of this special dispensation was linked to undertaking citizen centric reforms by the States. 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 (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.
On successfully undertaking the ULBs reforms, Madhya Pradesh and Andhra Pradesh have been granted permission to mobilise additional financial resources to the tune of Rs.4,898 crore through open market borrowings. Out of these, Madhya Pradesh has been permitted to mobilize additional Rs.2,373 crore, while Andhra Pradesh has received permission of Rs.2,525 crore.
Reforms in the urban local bodies and the urban utilities reforms are aimed at financial strengthening of ULBs in the State and to enable them to provide better public health and sanitation services. Economically rejuvenated ULBs will also be able to create good civic infrastructure