Local government finances: financial challenges faced by Dehradun Municipal Corporation

The world, including India, is rapidly urbanizing with more and more people living in the cities. Consequently, cities have come to be realized as the harbinger of economic growth and prosperity. Correspondingly, this rapid urbanization has also been accompanied by increasing complexities and responsibilities of urban administration that progressively face daunting tasks of providing decent and livable conditions to all its citizens. However, to deal effectively with these increasing responsibilities and duties, it is imperative for the higher-level governments, including the Central Government (CG) and State Government (SG), to provide the Urban Local Bodies (ULBs) (i.e., the institutionalized form of Local Government (LG)) with requisite powers, functions and funds/finances. However, various studies, including the present research paper concerning the study of the Financial Performance of Dehradun Municipal Corporation (DMC), clearly elucidate that though the responsibilities of the ULBs/DMC have increased enormously, there hasn’t been a commensurate increase in their powers and funds/finances thereby, severely constraining their capacities to perform effectively and deliver the required services. During the course of the analysis, the main reasons ascertained for this unfortunate performance comprised administrative, financial and political reasons. The administrative-reasons mainly included lack of adequate staff/personnel (especially skilled/trained personnel) available with the ULB/DMC. The financial-reasons mainly included deficient/ insufficient financial autonomy devolved to the ULB/DMC, resulting in its heavy dependence on the SG for funds/finances. However, whatever minimal revenue-sources and taxes are available with the ULBs/DMC even their exploitation is not very promising. Most of the ULBs often fall short of even collecting the basic O&M costs through user charges/fees (one, due to lack of adequate staff; two, inefficient collection by the available staff; three, political resistance towards collection and raising of user charges/fees). Similarly, the tax collection is also not optimum. However, the politicalreasons appeared to be the most prominent and overarching ones which mainly included: a sense of anti-urban bias in the politico-administrative set-up; reluctance exhibited by SG and bureaucracy to devolve greater power, functions and fund/finances to the ULBs; desire of SG, rural LGs and people to remain rural; and apprehensions and uneasiness exhibited by senior politicians who see the elected members of the ULBs as their future competitors. All these have cumulatively resulted into halfhearted/ perfunctory-decentralization whereby, though the ULBs/DMC do exist in reality but to a large extent heavily dependent on SG for funds/finances and devoid of adequate functional/financial autonomy. The research therefore, recommends: substantial devolution of functions to the ULBs; augmentation of their human resources alongwith enhancement in their capabilities through regular training/workshops; and enhancement of their finances. However, since decentralization and empowerment of ULBs is a political process, the implementation of these recommendations will inadvertently require the requisite political will among central/state/local leaders who are expected to remain committed towards greater local participation and decision-making.