CHAPTER - GOVERNANCE & FINANCE1. INTRODUCTIONGovernance is the exercise of economic, political, and administrative authority to manage a countrys affairs at all levels. It comprises the mechanisms, processes, and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. UNDP (1997)With rapid expansion of the economy, rising per capita incomes, and growing awareness and assertion of rights by an increasingly educated population, both the need for good governance and the demand for good governance have increased. Good governance is needed for effective implementation of Plan schemes. It is also needed for ensuring that ordinary citizens can effectively access public services that are their right. Finally, it is needed for a better functioning of the private sector in the economy. Poor governance leads to corruption, both petty and large, both of which corrode the moral fabric of the society. Large scale corruption occurs either because of mishandling of government contracts, or because discretionary decision making in some areas is used to the advantage of some. Corruption undermines the legitimacy of the system in the eyes of the public and reduces potential for achieving efficiency through competition.1.1 12TH FIVE YEAR PLAN APPROACH ON GOOD GOVERNANCETransfer of all the 18 functions identified in the 74th CAA to the ULBs. In all metropolitan areas and cities, dedicated government agencies with additional autonomy should be carved out to provide services like water supply, solid waste management, sewerage, sanitation etc. The allocated municipal bodies may procure services from these agencies by entering into suitable MoUs. Every State should institutionalize a dedicated municipal cadre with necessary technical skills. A major strategy under the 12th Plan would be to strengthen the municipal finance and make them predictable. The Master Plan approach focuses on only the core area of the city and has little linkages to any financial and operational strategy. Every city/town should have a Development Plan by taking at least a 10 year perspective.2. VISION FOR GOOD GOVERNANCE FOR AMRITSAR CITY, 2035Important contribution to equitable and just society and thus to prospects for social development and poverty alleviation. Enhanced engagement of Good Governance with anti-corruption. Enhancing civil service capacity through appropriate reform measures that matches performance and accountability. Strengthen the municipal finance and make them predictable. Social Accountability Social Audits, Right to Information Act, Community Score Cards.3. KEY ISSUES IN AMRITSAR & THEIR RESPECTIVE PROPOSALS3.1 Implementation of 74th Constitutional Amendment Act3.1.1 IssueAs comprehensive planning is the first step for improving quality of governance, as envisaged in Article 243ZD and ZE of the Constitution. The role of District Planning Committees and Metropolitan Planning Committees should be given effect to in letter and spirit. As in case of Amritsar, MPC and DPC have been constituted but as as Amritsar UA itself comes under Amritsar district so MPC formulation is an anomaly. Considering the transfer of 12th Schedule to Municipal Corporation of Amritsar, 15 of the 18 functions have been transferred. 3 important functions 1) Urban planning including town planning, 2) Regulation of land-use and construction of buildings, 3) Planning for economic & social development; have not been transferred. Also in Punjab there has been no change in the functional domain of the ULBs in the post-CAA regime. 3.1.2 ProposalTransfer of City Planning Functions to MCA should be made mandatory. As MPCs boundaries will be more amorphous with time as it is based on actual urban growth. Presently, Amritsar UA itself comes under Amritsar district so if both MPC and DPC prepare the development plan, they would be duplicating each others work. Hence, there is only necessity of formation DPC which will work on the ULBs as well. There is a need to introduce a governance setup that is technically qualified and professionally equipped to bring about the developments in Amritsar, Also, Deprovincialization of all posts be carried out in municipal bodies, to strengthen the autonomy of the ULB and to improve their administration. Important role of preparing plans for economic development and social justice to be given to M.C.A. A necessity remove multiplicity of authorities and overlapping functions in terms of delivery of services should be focused on. Also to introduce technically qualified personal into the process of planning with e-Governance.Capacity BuildingAn assessment course have to be made which will assess the present situation of MCA, staff, their skill status and would ask for probable training requirement. It will also give direction to ULB to judge the skill growth in a trainee by conducting tests and it would directly impact their position/promotion and income. The ULB and development Authority not headed by a qualified planner instead are held by engineers or administrators. This lead to problems such as delayed decision making, lack of appropriate vision and policy in planning, delay in master plan preparation. Hence qualified planner head at such bodies is the need of the hour.

PostCurrent StatusRequired

Chief Town Planner11

Additional Chief Town Planner01

Senior Town Planner23

Associate Planner36

Assistant Planner312

Total923

Table 1: Number of Town Planners in Metropolitan Planninge-Governancee-Governance is the application of ICT in delivery of services to public by government. It brings efficiency, effectiveness, transparency and accountability of informational & transactional exchanges with in government, government agencies of National, State, Municipal & Local levels, and citizen. It empowers citizens through access & use of information. Its objective is to provide functional training to officers/employees of the municipality of Amritsar in areas related to Computer/Computer Awareness, Data Base Management System (DBMS), Management Information System (MIS) and GIS mapping. ProjectEase of UseSimplicity of ProcedureTime savings compared to manualAffordable Cost of ServicesReduction in CorruptionTotal

Suvidha - Kapurthala10810998.9

Property Registration - Sang9891047.4

Transport - Ropar10991077.7

Table 2: Impact assessment of e governance in PunjabShort Term Priorities: Upgrading Municipality infrastructure through dedicated internet facility and installing e-mail server for effective communications. Developing various application for municipality administration and various centres.Long Term Priorities: Developing software in collaboration with NIC/other Information Technology concern inside state, for various government departments to standardize and eliminate high cost of development.Grievance Redressal SystemA grievance redressal system should be established in every state with further decentralization up to the level of local development authority, which will provide a decentralized system for relief and dealing with complaints related to Urban / Regional plan. Hence, a Citizens Charter could be formed.Figure 1 : Proposed Administrative Set-up for Amrtsar

3.2 Master Plan Making Process3.2.1 IssueAccording to PRTPD Act, 1995, the development authority as a client of designated planning agency is deemed to prepare and implement master plan. Lack of technical people in the municipality for plan preparation may lead to mismanagement of resources. Also Public Participation is not legitimized in the process. Hierarchy of plans have been limited to Master plan, Zonal Plans and Town Development Schemes. Zonal Plan making under progress which will lead to non-manifestation of on ground vis--vis on ground constraints would not get incorporated in the plan. 3.2.2 ProposalMCA will be made responsible for plan making and implementation. Training programmes for the elected representatives and staff of urban local body. Amendments will be made in PRTPD Act to MCA as the authority of planning. Introducing hierarchy of plans in terms of zonal plans such that continuity is maintained which will link with the master plan. Also an advisory committee should be constituted for plan formulation. Core Planners team for holistic planning of cities and regions should necessarily consist of an urban planner and/or regional planner, environmental planner, transport planners and infrastructure planner. Apart from team of planners certain experts are also required (as per requirement of the study) such as heritage conversation expert, legal expert, economist, geographers, sociologist/anthropologist, expert in housing and good governance, tourism expert, water & sanitation expert and other.S. No.Type of PlanApproved ByTime (months)

1.Master PlanDirectorate of Town & Country Planning12

2. Zonal Development PlanM.C.A12

3.Annual Action PlanM.C.A3

5.DPRTown Planning Section1

6.T.D.SM.C.A12

Table 3: Approving Authority and Time Frame

Figure 2 : Proposed Master Plan making Process

3.3 Multiplicity of Authorities 3.3.1 IssueThere is the multiplicity of urban planning and development agencies in the state as well as in the city. For instance, there are several agencies working for planning, such as Regional and Town Planning Board, Punjab Urban Planning and Development Authority (PUDA), Punjab Infrastructure Development Board (PIDB), Punjab Heritage and Tourism Planning Board (PHTPB) besides Town and Country planning department. The same is the case with urban development which involves agencies like Improvement Trusts and city-based development authorities like (GMADA) Great Mohali Area Development Authority, Amritsar Development Authority (ADA) etc. And let us not forget the ULBs which are envisaged as agencies apart, there is also a marked lack of inter-agency coordination. The result is a duplication of authority, overlapping jurisdictions, functional confusion, shifting responsibilities, lack of accountability and interagency misgivings and tensions. Further, it also results in multiplicity of rules and procedures, as every agency frames its own rules and procedures which are also often contradictory. This generates distortions in urban development. The fragmented character of urban planning, governance and development administration is also a source of immense problems to the people. The lack of coordination between improvement Trusts and Municipal Corporation is a common example of it. Improvement Trust develops certain residential and commercial areas and hands them over to Municipal Corporations which the latter are usually reluctant to take over for one reason or another. This puts people to unnecessary harassment.3.3.2 ProposalThere is a need to have proper coordination between various administrative agencies. Specialized depts. for particular use should be formulated. Also it is proposed to link Municipality with para-statals and state depts. There should be a formulation of Zonal Development Officer at the town planning section to be responsible for the preparation of zonal development plan. Also a Plan Monitoring Department will be formulated to monitor the status of plan which is being implemented and would look at project details pertaining to time schedule and management of funds. Amritsar Improvement Trust shall be dissolved into Amritsar Development Authority. Dedicated government agency with additional autonomy should be carved out to provide services like water supply, solid waste management, sewerage, sanitation etc. The allocated municipal bodies may procure services from these agencies by entering into suitable MoUs.3.4 JNNURM Reforms 3.4.1 IssueThe very first mandatory reform suggested under the JNNURM is also the implementation of the 74th CA. Experts opine that putting conditionalities is the very reverse of the professed goal of decentralisation and is, in fact, a reversal to centralisation.Governments are not doing all that they can for their citizens; hence a little bit of disciplining might be perfectly in order. For instance, most States have reneged on fully implementing the Constitutional directives on 74th CA itself. Also, the current bane of all municipal budgeting is that it gets hijacked to serve the interests of the elite (in urbaninfrastructure it goes mainly to support the needs of the private car-based economy) in the form of fly-overs, expressways, etc., a la big dams in rural areas, which guzzle a huge amount of funds to benefit only a few.

One of the fixed allocations under the JNNURM, of allocating 65% of funds for city infrastructure while allocating only 35% for basic services to the urban poor appears to be abetting such misplaced priorities. If the conditionality of JNNURM is on privatization of basic services, despite the recent revealing experiences of the Delhi Jal Board in its plans to privatize operation and maintenance of water supply, it will have to be opposed through peoples sustained campaigns. The World Bank tried to arm-twist the Delhi Jal Board to accept the tender of its favourite US MNC, Price-Waterhouse Coopers. The tender conditions were more or less on the lines of the infamous Enron agreement which would have only led to the bankruptcy of the Delhi Jal Board.The refrain is always, From where will the funds come, unless we bring in private investment? There are many examples from Latin America which show that privatization is not a panacea and that there are alternative ways of overcoming the cities inefficiency and corruption. These alternatives indicate that it is possible to make the people own service agencies as opposed to the public or private sectors - by making each citizen a share-holder in a citizens cooperative to run the service. These have proven to be efficient and free of corruption. If obligatory functions of the state, such as water supply, solid waste management, and primary education and primary health care, etc., are to be privatised, then why do we need to pay taxes and why do we need a government, is the cry of several activists. While talking of privatizing services, there is no mention in the JNNURM of certain services being provided free, for instance, a minimum quantity of water for subsistence, as a human right of all, as in South Africa.

3.4.2 ProposalAll proposed policy changes should be preceded by a policy for the urban poor, ensuring them free, or nearly free, minimum basic services. The Right to Shelter of all, declared a part of the Right to Life and Livelihood under Article 21 by the Supreme Court in 1981 and 1990 to be ensured by earmarking adequate land for the housing of the urban poor in Bangalore, for instance, disused factory lands. The earmarking of 25% for EWS in all housing projects to be made mandatory. No plans to privatize basic services should be initiated. The Centre to be convinced to increase its grants under NURM from 35% of the cost of projects to at least 80% to prevent MCA from getting into a debt trap. .The very first project to be taken up by all cities should be the up gradation of all slums and provision of basic services to all the urban poor. The total cost for this should be realistically estimated and should be made the first charge on NURM funds. Only when these are completely budgeted, should other projects be taken up. All projects must be in line with the guidelines laid down by the National Slum Policy, National Housing and Habitat Policy and National Street Vendors Policy. Conduct massive capacity building of municipalities, elected representatives and communities on the 74th Amendment and NURM with the 5% funds earmarked for it under NURM. Prepare genuinely bottom-up CDP plans by involving communities in ward and sub-ward sabhas. Citizen involvement in implementation of reforms.

3.5 Deprivation in ULB Finances 3.5.1 IssueMost of the total funds was spent on running the administration and contingencies only and just 28-30 per cent funds were used for carrying out developmental works. Income from house tax, water and sewerage charges is also not fully collected by the MCA from the residents. In 2005 -2006 MCA was having a debt of Rs. 13 crore now it has now increased to Rs. 40 crore. The amounts that will be provided to the municipalities in lieu of octroi represent a new charge on the finances of the state, necessarily reducing the funds available for expenditure on infrastructure. All this emanate ULB from their own reluctance to fully utilize their taxation powers, and to levy appropriate user charges to recover the cost of services. Also aggravate the already fragile financial structure of the ULB besides generating an unhealthy tendency in the public to avoid paying for the services they receive.Poor finances in municipality results in i. Poor basic servicesii. Low capital investmentiii. Low credibility of municipalityiv. Poor revenue collection efficiencyv. Corruption & vi. Lack of innovation in resource mobilization3.5.2 ProposalThis situation needs to be corrected through augmentation of resources at ULB level using alternate sources of finance. The move towards off-budget instruments that provide financial flows from unconventional sources is now considered to be a world wide phenomenon.

Figure 3: Funding Sources Figure 4: Revenue SourcesRefurbishing Of Property TaxDelinking the assessment of property tax from the rental value of the property. The unit area method approach for tax calculation be applied. All ULBs should start levying property tax on vacant land on which no building has been built but on which a building can be built or is in the process of being built. There should be a provision for linkage between the records of the buildings, water supply and house tax departments in the ULBs to ensure that all properties are covered by property tax. GIS technology and remote sensing data can be used for locating un-assessed properties.Professional TaxPunjab being a state where earnings are high and the quality of life superior, it makes eminent sense to levy profession tax in urban areas to ensure that the civic amenities in Punjab also develop apace with the economic development of the state. Land As A ResourceThe ULBs need to exploit various land based revenues, which have greater implication to urban growth and development and concomitant problems like slum formation, redevelopment, rehabilitation and resettlement. The funds realized from land based revenue sources can be effectively deployed for the improvement of urban poor people living in the slum areas.Valorization ChargesValorization, which refers to situations where the local body has provided improved services and needs to recover these costs, either on a one-time basis or over a period of time. In such cases, the local body can apportion the cost of providing improved services according to the extent of use by various properties to which the services have been provided.Development Impact ExactionExactions are taken from developers in the form of land, to provide necessary public and community services. There are prescribed norms regarding exactions to guide local bodies.Institutional Finance The municipal bodies now can take recourse to HUDCO, Infrastructure Leasing and Finance Corporation, NHB, LlC, and HDFC for loan.Effective Tax AdministrationThis could be done by, among other things, by introducing a system of incentives for prompt payment and penalities for defaulting.

4. FINANCIAL ESTIMATIONEstimation to be done to provide financial backing to the proposals according to the priorities of development. Levy of reasonable user charges, with the objective that full cost of operation and maintenance is collected within phased years.Land AcquisitionLand Acquisition Rate in Amritsar 1240/sq.ftDevelopmentPurposeExternal Development Charges (Rs./sq.m)Conversion Charges (Rs./sq.m)License Permission Fee (Lacs/gross acre)

NHSHOther Road

Residential (Plotted)827 133112893

Residential (flatted)2346 (1.50 FAR)2001671334 (1.50 FAR)

Commercial 2902 (1.50 FAR)1067889712150 (1.50 FAR)

Industrial1067 (1.00 FAR)133112890.5 (1.00 FAR)

Recreational1164 (1.00 FAR)133112890.5 (1.00 FAR)

Institutional827 (1.00 FAR)133112890.5 (1.00 FAR)

Table 4: Development Charges in Amritsar1. External Development Charges (EDC) are the charges for utilization of existing infrastructure/proposed infrastructure. 2. The External Development Charges will be utilized by the concerned local planning and urban development authorities for providing infrastructure3. only one agency i.e. Department of Housing and Urban Development will approve the change of land use/grant permission of land use against payment of prescribed charges4. For higher FAR, the rates will increase proportionately. 5. Licence/Permission fee is the fee for granting permission to colonizers/promoters for their projects.6. For mixed land use, proportionate charges for different categories will apply

Operation & Maintenance5% of the total costs (acquisition, development, up gradation etc.) and also includes pays and allowances for the municipality.

Figure 4: Methodology for Estimation

PHASESMUNICIPAL INCOMEINFLATED MUNICIPAL INCOMEPROJECTED EXPENDITURETOTAL EXPECTED EXPENDITUREEXPECTED SOURCESTOTAL EXPECTED INCOME

ACQUISITIONUPGRADATIONDEVELOPMENTTOTALO&MSCHEMESBANKRECOVERYTOTAL

(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)(crore Rs)

PHASE I560.95617.045133933.14138.921511.0675.551586.6180.9843106.631030.531591.48

PHASE II563.11675.7351341.58107.91662.4933.12695.61156.870160.43317.3880.41

PHASE III323.86421.02502207.99201.5911.4945.57957.06256.37194.1214.23664.7988.56

PHASE IV403.92565.49059.46102161.468.07169.5353.510268.03321.54725.46

TOTAL1851.842279.282354342.17550.333246.5162.323408.82547.651037.1749.322334.074185.91

Table 5: Income and Expenditure of MCA (Induced Growth)

SchemesUpgrdation and development can be received by upto 90% through central (GOI)/state (GOP) sponsored schemes.Some schemes through which cost can be recovered are 1. Amritsar Building Reconstruction Repair Schemes.2. Special Area Redevelopment Schemes3. CBULB (for capacity building)4. E-governance in municipalitiesInflation in Municipal IncomeInflation in taxes, primarily the property tax is foreseen. This will be as follows - 1. .Phase I - 10%2. Phase II 20%3. Phase III 30%4. Phase IV 40%Loans Lead Bank Punjab National Bank Bilateral Ageny Infracture Development Board Multilateral AgencyRecoveryCosts can be recovered by selling developed lands for residential, industrial and commercial uses. 40% return to investment expected.RemarksExtra income is to be used for paying back the bank loans in the future

4. PROJECT IDENTIFICATION AND PHASINGS.NoName of ProjectAdhere to the vision of Master PlanRequired Service/ProductStrategic AlignmentValue to UsersImportance to Risk ManagementLeverage PotentialFull Recovery of CostTotal

INDUSTRIAL

1.IMC near Delhi-Mumbai-Kolkatta Corridor999999963

2.Industrial Estate: Near Verka999999963

HOUSING

3.New Housing Areas PPP Model996996654

4.Special Area Redevelopment Schemes993663339

5.In-situ Slum Rehabilitation993693342

TOURISM

6.Tourist Circuits966966951

7.HoHo Bus Services966966951

HERITAGE

8.Conservation, preservation and development of heritage and culture (Urban Renewal) 696666342

COMMERCIAL

9.Laying down of 5 Facility Corridors966939951

PHYSICAL INFRASTRUCTURE

10.New Sewer Networks393999951

11.3 new Sewage Treatment Plants393999951

12.Renovation and replacement of existing sewer lines393999951

13.1 new landfill site393999951

14.Laying down of Rainwater Harvesting mechanism363663330

TRANSPORTATION

15.Completion of NH-1 Bye- pass in south666636942

16.Elevated Road nh-15666636942

17. 2 Freight Complexes near Industrial Estate996636948

18. Proposed BRT corridor666636942

19.Relocation of Bus Terminal near Verka666636942

SOCIAL INFRASTRUCTURE

20. 2 colleges, 8 hospitals666996951

GOVERNANCE

21Capacity building, E-governance, Urban Finance696666948

Table 6: Prioritization of Projects and their Phasing Phase 1 (2014-24) Phase 2 (2024-35)Parameters Used Adhering to the vision of Master PlanIs the service/product fully adhering/complimenting to the vision of master plan? RequiredService/Product(areanyofthesetrue?)1. Mandate2. Impactscore/foundational service3. Otherservices/productsdependonit

StrategicAlignment1. Initiatives/Strategic2. Priorities3. AdministrativeExcellence/Innovation

Value to Users

ImportancetoRiskMitigationWouldthecitybeexposedtoariskorimpactiftheserviceorproductisnotoffered? LeveragePotentialMultipliereffect:service/productcanbeleveragedforotherusers FullDisclosureofCostsincludesimplementationandmaintenancecosts

ProjectsPhase I1. IMC near Delhi-Mumbai-Kolkatta Corridor2. Industrial Estate: Near Verka3. Completion of NH-1 Bye- pass in south4. Relocation of Bus Terminal near Verka5. Capacity building, E-governance, Urban Finance6. Tourist Circuits

Phase II1. New Housing Areas PPP Model2. New Sewer Networks3. 3 new Sewage Treatment Plants4. 1 new landfill site5. Elevated Road NH-15Phase III1. Special Area Redevelopment Schemes2. In-situ Slum Rehabilitation3. HoHo Bus Services4. Conservation, preservation and development of heritage and culture (Urban Renewal) 5. 2 Freight Complexes near Industrial Estate6. Proposed BRT corridor7. Renovation and replacement of existing sewer lines8. Laying down of 5 Facility CorridorsPhase IV1. 2 colleges, 8 hospitals2. Laying down of Rainwater Harvesting mechanism

5. CONCLUSIONIn India, with the rising urban population and growth of urban areas, the development pressure on cities is increasing and metros are particularly sharing more burden. The development of Amritsar itself is critically dependent upon the availability and delivery of good urban infrastructure services. However, the resource requirements of urban infrastructure services are quite large and hence pose a great challenge. Also, the creation of urban infrastructure basic civic amenities and other support services is itself expensive and time consuming; in other words, infrastructural investments are essentially lumpy in nature that require investments primarily by government.The Central government has allocated one time support by creating JNNURM, which provides a substantial funding. The State and Urban local governments have to take a lead role so as to sustain the resource flow from the new assets and from their sources. The city have to show a resolve to increase the resources for urban infrastructure development by exploiting the potential non-conventional means of resource mobilisation and using PPPs for service delivery arrangements. Given that most of the Amritsar show little or no revenue surplus to match the capital expenditure required for providing basic infrastructure services, it may resort to accessing finance from market through floatation of bonds. The ULBs assumption of maximum responsibility in the process the financing of a healthy proportion of required resource requirements would have been a feasible option. The 74th CAA and the ensuing decentralisation initiatives are hailed as meaningful steps for achieving this objective, with greater infusion of accountability among the local elected officials, on the one hand, and enhanced resource capacity of the local bodies on the other.

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