Public Policy

Status of Finance Health of Urban Local Bodies in Odisha

Status of Finance Health of Urban Local Bodies in Odisha Status of Finance Health of Urban Local Bodies in Odisha Dushyant Meher February 22, 2025 Indian Economy, Public Policy, Urban Development Fiscal Excellence of Odisha Financial health is the key indicator of capability, opportunities and challenges of an individual, family, institution or a government. Urban Local Bodies (ULB) like city corporations, municipalities and town panchayats are belong to the third tier of our governance structure responsible for urban growth centres that plays a crucial role in the era of aspirational India. The third tier of governance was enforced through 73rd and 74th Amendments Act in 1993 – an early stage of our economic reforms gradually becoming part of policy discourse because of its mandate and functions entrusted upon. On the backdrop of the latest report on “Fiscal Health Index 2023” to assess the fiscal health of the States; it is also a matter of imperative to look at the   state of municipal finances as reported by Reserve Bank of India in its “Report on Municipal Finances 2024”. This report delineates the sources of revenue generation, opportunities and challenges by the municipal corporations of the states. In the context of “Odisha” that stood on top of the list of States in India due to its fiscal prudence obtained through a systematic financial management over a period of time as per “Fiscal Health Index 2023” by NITI AAYOG; an analysis of the financial health of MC may help further strengthening the overall financial wellbeing of the State through its municipal governance. There are 5 MCs in Odisha namely- Berhampur, Bhubaneswar, Cuttack, Sambalpur and Rourkela situated in eastern, western and northern region of the state. As per 2011 Census, Odisha was one of the least urbanized states in India, however, it is catching up in urbanisation as in 2024; 34 new notified area councils (NCCs) and upgradation of 5 municipalities added to the list of local urban governments. The NITI AAYOG Report on Fiscal Health Index 2023 highlighted that “Odisha excels in fiscal health with the highest overall index score of 67.8. It tops the Debt Index (99.0) and Debt Sustainability (64.0) rankings with better than average scores under Quality of Expenditure and Revenue Mobilization. The state has maintained low Fiscal Deficits, a good debt profile, and an above average Capital Outlay/GSDP ratio.” Also “the top five high-performing states are Odisha, Chhattisgarh, Goa, Jharkhand, and Gujarat.” Further, the report stated that “Odisha and Chhattisgarh have performed well under Revenue Mobilization, with their Own Non-Tax Revenue growing significantly due to high revenue collection from mining.” The Reserve bank of India, started focusing on the financial health of MCs by releasing state-wise reports in 2022 and 2024 that delve into fiscal position. Since, MCs are responsible for the provision of vital public services like health, education, water, sanitation, street lighting, public parks registration of births and deaths under their jurisdictions; they have a crucial role to play in effective urban management, urban development and upgradation of urban infrastructure. Odisha is also mineral rich state which supports for manufacturing sector across different region. Odisha publishes monthly fiscal report. According to RBI report “Odisha was one of the most fiscally stressed States in the early 2000s, with a debt-GSDP ratio of 57.3% in 2002-03 – well above the consolidated debt-GDP ratio of 32.1% for all States. The interest payments to revenue receipts ratio (IP/RR) was 34.2% in 2002-03, imposing a significant strain on the State’s finances. Over the subsequent two decades, there has been a turnaround in the fiscal position of the State, with the debt-GSDP ratio declining to 16.0% in 2023-24 –the lowest among the Indian States”. RBI Report also highlights that “during the challenging times of COVID-19, Odisha maintained prudent fiscal practices like periodic revision of the rates/user charges of various tax and non-tax sources and monthly reviews of revenue collection. Odisha is the only State to register a revenue surplus (1.7% of GSDP) during the pandemic year of 2020-21, which increased to 6.5% of GSDP in 2021-22 on account of higher realisation of non-tax revenue.” Status of MCs in Odisha The RBI report primarily highlights the revenue account, revenue sources and reforms being undertaken by MCs. In the context of Odisha – the following observations convey the status of its MCs: The size of revenue receipts of MCs in Odisha has increased substantially in last five years period from Rs.612.36 crore in 2019-20 to Rs.1266.96 Crore in 2023-24 (BE). Total revenue expenditure of 2023-24 (BE) is Rs.1060.89 crore. Ratio of Municipal Corporations’ Revenue Receipts to State Government’s Revenue Receipts comes to 0.7 Ratio of Municipal Corporations’ Tax and Non-Tax Revenue to State Government’s Tax and Non-Tax Revenue is 0.3. The percentage of Revenue Grants, Contribution and Subsidies has marked an increase by 21.6% which doubled from 22.27% in 2019-20 to 43.87 in 2023-24 (BE). In terms of capital receipts; there is a marked increase in Finance Commission grant from 6.17 % out of total receipts for specific purposes in 2019-20 to 21.28 % in 2023-24 (BE). Similarly, the State Finance Commission grant increased by 10.26% from 21.17 % to 31.43 % for specific purposes. Capital expenditure of the MCs in Odisha has been consistently above 95% throughout in last five years under evaluation. The ratio of capital expenditure to total expenditure for MCs is more than 50%. The own tax ratio of MCs in Odisha was only 14.98 % in 2023-24 (BE) as compared to the highest level at 53.8% in Karnataka and 50.3% in Telangana. A trend of decreasing in percentage of own tax revenue (OTR) was observed in last three years from 22.86 % in 2021-22 to 16.00 % in 2022-23 and a further decrease to 14.98 % in 2023-24 (BE). Similarly, sources like- “income from investment” and “interest earned on loans” have reported a decrease from 4.13 % in 2019-20 to 1.72 % in 2023-24 (BE) and from 4.08 % to 1.45 % respectively. RBI Report Highlighted the following Institutional

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Open Defecation, Stray Dogs, and Child Stunting

Open Defecation, Stray Dogs, and Child Stunting Open Defecation, Stray Dogs, and Child Stunting Ghanshyam Sharma February 21, 2025 Child Development, Public Policy, Urban Development Child stunting—the phenomenon of children not being able to grow to their potential heights—is an acute problem in India. India is ranked 132nd out of 152 countries and outperformed by neighboring countries such as Nepal and Bangladesh. This means that over some time, children in Nepal and Bangladesh will be taller than children in India. Open defecation and malnutrition are the primary causes of child stunting. In a recently published research focused on India, Indonesia, Mali, and Tanzania, scientists found that a sanitization program designed to eliminate open defecation has led to much-improved child health and height.  This is because open defecation leads to fecal contamination of water and food supplies with parasitic worms and causes diarrhea and parasitic infection among children under 5 years old. In this context, the Prime Minister’s drive to eliminate open defecation and promote cleanliness is a welcome step. However, Indian laws promote mass open defecations and unhygienic conditions – by encouraging stray dogs. As per the law, stray dogs can neither be euthanized nor displaced from their locations. Dog shelters are not an adequate solution. The stray dogs can breed quickly, and the only limiting factor is food availability. The apathy of municipal corporations towards garbage disposal ensures an uninterrupted food supply.  In elite neighborhoods, such as Lutyens Delhi – the abode of the political class, stray dogs are rare. In elite neighborhoods, municipal corporations are more efficient. However, municipal corporations are less sympathetic to middle-class and economically poor neighborhoods. Poor waste disposal mechanisms in these neighborhoods lead to a higher stray population and more defecations— – none of which gets removed. Children play in the same spaces where dogs defecate – thus exposing them to infections, dog bites, and reduced heights. The problem is acute in slums where waste disposal mechanisms are non-existent. In metropolitan cities, poor migrants and stray dogs occupy the same space on the roads, leading to several health and safety hazards. Such laws put middle-income and poor neighborhoods at the greatest risk. As per the World Health Organization, India accounts for 36 percent of deaths due to rabies which translates to 18,000 to 20,000 deaths a year. In several instances, stray dogs have attacked, injured, and even killed small children and older adults. People walking with sticks to ward off attacks from stray dogs are a common sight. Stray dogs create a problem of externalities in local communities. While dog lovers feed stray dogs, they do not allow them inside their homes like pets. This creates a positive externality for dog lovers who enjoy the company of dogs without taking responsibility for them. On the other hand, stray dogs create a negative externality for people who do not feed them and are vulnerable to dog attacks, particularly senior citizens and young children. Developed countries have addressed the problem with massive public funding. However, developing countries such as India need to prioritize public spending towards malnutrition among children, among other issues. Therefore, we need innovative ways to address the matter. This can be done by incentivizing the Resident Welfare Associations (RWAs) and panchayats to find solutions they find appropriate. However, according to the Supreme Court, municipal authorities cannot be granted unbridled discretionary powers to address the issue of stray dogs. Such judgments are unfortunate because they further centralize the Indian governance structure. India’s political elites suffer from what Noble Prize-winning economist Friedrich Hayek called the ‘fatal conceit’ – the belief among the elites that ordinary people and local communities are inferior to them and, therefore, incapable of self-governance. Thus, the elites should enact laws. India’s over-centralized governance structure is based on the belief that local governments cannot self-govern, even on matters related to stray dogs. In India, the central and state governments make laws even on local homeless dog populations. When it comes to dealing with stray dogs, even the local MPs and MLAs are powerless. India should move towards decentralization and allow local authorities such as RWAs and other local residential groups jurisdiction over local matters because local authorities are more likely to reflect local preferences.  Further, Section 291 of the Bhartiya Nyay Sanhita provides six months imprisonment and five thousand rupees in fine for the individual whose pet attacks another individual. Section 291 should be interpreted to consider stray dog feeders as dog owners and face penalties under the law if the stray dogs attack others. Such an interpretation will correct the incentives faced by dog lovers, and they will accept the full responsibility of dog ownership. The author is an Associate Professor at the School of Economics and Public Policy, RV University, Bengaluru. The Author is a Honourary Research Fellow at AgaPuram Policy Research Centre. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre. This article was originally first published by Deccanherald at https://www.deccanherald.com/opinion/child-stunting-a-public-health-crisis-fuelled-by-stray-dogs-open-defecation-3405071?utm_source=whatsapp&utm_medium=referral&utm_campaign=socialshare

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Economic Survey of India 2024-25: MajorHighlights by Madhusudhanan S

Economic Survey of India 2024-25: Major Highlights by Madhusudhanan S Economic Survey of India 2024-25: Major Highlights Madhusudhanan S February 8, 2025 Economic Reforms, Indian Economy, Public Policy On 31 January, 2025, the Union Finance Minister tabled the Economic Survey 2024-25 in Parliament. Before going into the major highlights of the Economic Survey, it is pertinent to know what an economic survey is, its preparation and presentation, and its importance. Economic Survey Every year, the Finance Ministry releases the Economic Survey of India, an annual report that evaluates the country’s economic performance during the previous year. It draws attention to macroeconomic indicators, economic development, and the possible future challenges for India. To handle those economic challenges, the economic survey recommends necessary policy changes. Preparation & Presentation The Economic Survey of India is prepared under the supervision of the Chief Economic Advisor (CEA), Department of Economic Affairs, Ministry of Finance. Until 1964, the Economic Survey was presented in parliament along with the Union Budget, after which it was tabled one day before the Union Budget. The first Economic Survey was released in the Fiscal Year (FY) 1950-51. Importance  of Economic Survey The Economic Survey is the most comprehensive and reliable official analysis of the Indian economy. Economic Survey provides the Government’s official framework for decision-making and economic policy considerations. Economic Survey’s recommendations are suggestive and not binding. Economic Survey 2024 – 2025 – Major Highlights  The Economic Survey 2024-25, contains 13 chapters and includes a chapter which talks about whether the Artificial Intelligence era is Crisis or Catalyst for Labour (Labour in the AI era: Crisis or Catalyst). As the Survey is comprehensive, this article summarises the key points into the following seven major themes: State of the Economy Medium-Term Outlook: Deregulation Drives Growth Investment and Infrastructure Industry Service Sector Agriculture and Allied Activities Employment and Skill Development……To read more, download the PDF DOWNLOAD PDF

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Deterioration of State Finances of Tamil Nadu

By B.Chandrasekaran Deterioration of State Finances of Tamil Nadu By B.Chandrasekaran Deterioration of State Finances of Tamil Nadu By B.Chandrasekaran Chandrasekaran Balakrishnan January 31, 2025 Economic Reforms, Public Policy, Tamilnadu Economy In recent years, the Government of Tamil Nadu’s steadily increasing overall debts and excess borrowings for financing the welfare programmes has sparked fierce debate among ruling party leaders and opposition leaders. The opposition leaders argue that despite increased tax collections, the state government has continuously borrowed loans for funding the welfare programmes alone and is not able to fund increased capital expenditures, which would help the state economy to also fund the urban civic infrastructure facilities and services that are lagging. During the last few years, the fiscal management of Tamil Nadu has increasingly become a concern. However, the ruling government has not accorded adequate attention to the worrying trend of rising fiscal debt. In this context, it is very pertinent to look at the recently released report of the Reserve Bank of India (RBI) on “State Finances: A Study of Budgets of 2024-25- Fiscal Reforms by States” in December, 2024, with respect to the state of Tamil Nadu. The report contains fiscal data for the years 2021-22 (actuals), 2022-23 (revised estimates), and 2023-24 (Budget Estimates) besides other key data. The RBI report highlights that the states should make efforts towards strengthening fiscal prudence with the following measures on priority: “State-specific Fiscal Responsibility Legislations (FRLs) along with tax and expenditure reforms have strengthened their finances over the past two decades. In view of high debt levels, contingent liabilities, and the rising subsidy burden, State government finances would benefit from the adoption of a risk-based fiscal framework with provisions for counter-cyclical fiscal policy actions; A prudent medium-term expenditure framework; A clear, transparent, and time-bound glide path for debt consolidation; and Enhanced data dissemination and communication policies, including on reporting of outstanding liabilities, off-budget borrowings, and guarantees. Strengthening of State Finance Commissions is also critical for ensuring adequate and timely fund transfers to local bodies.” DISCOM drags down Finances of Tamil Nadu The level of revenue deficit in States such as Haryana, Kerala, Punjab, Rajasthan, Tamil Nadu, and West Bengal witnessed a level much higher than the all-state average during the period of 2021-22 to 2023-24. With respect to Tamil Nadu, the revenue deficit for 2021-22, 2022-23, 2023-24 (RE) and 2024-25 (BE) were 2.2%, 1.5%, 1.7% and 1.6% in GSDP respectively. These are higher than all India levels. One of the major indicators of the deterioration of state financial health is the continuous losses incurred by the state electricity department and the failure to undertake institutional reforms apart from funding freebie schemes. According to the RBI Report, six states contribute 75% of the total national losses incurred by electricity distribution companies (DISCOMs) which amounts to Rs. 6.5 lakh crores (2.4% of GDP) by 2022-23. Tamil Nadu is one of six states with the largest share of 26% in national level losses, followed by Rajasthan (15%), Uttar Pradesh (15%), Madhya Pradesh (10%), Telangana (10%) and Maharashtra (5%). The RBI Study on State Finances-2023-24 observed that “Power distribution has strained State finances due to persistent operational inefficiencies and significant under-recoveries. Receipts from the power sector constitute less than a tenth of the corresponding revenue expenditure incurred by the States.” By March 2023, Tamil Nadu DISCOM reported losses of over Rs. 1.6 lakh crores. The major issues in the context of DISCOM finances highlighted are low tariff rates, high procurement costs of power, cross-subsidisation, and the dominance of State authorities which limits decision-making autonomy (Pinaki Chakraborty and Kaushik Bhadra, 2024). One of the remedies suggested by experts is to increase tariffs in electricity utility rates across different categories and reduce AT&D losses with smart meter systems and institutional reforms. In fact, analysis shows that more than a 50% increase in tariffs would be required in Madhya Pradesh, Tamil Nadu, and Rajasthan where tariffs are already higher than the national average. However, Tamil Nadu has linked tariff increases to inflation for automatic annual adjustments (MERC, 2023; TNERC, 2023). In order to finance the expenditures of states over and above the revenues, the state governments borrow loans. As per RBI Report, the net market borrowings of States rose by 38.2% to Rs.7.17 lakh crore in 2023-24, with Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh, Rajasthan, West Bengal, and Telangana amongst the major borrowing States. Also, States such as Madhya Pradesh, Maharashtra, Puducherry, Punjab, Rajasthan, Tamil Nadu, and Uttar Pradesh undertook re-issuances of loans during the year (2024-25). Overall, for the states with an increasing focus on capital expenditure, the ratio of revenue expenditure to capital outlay (RECO) of the States has seen a welcome decline from 6.3% in 2021-22 to 5.2% in 2024-25 (BE). Unfortunately, a state like Tamil Nadu has 7.3%, which is higher compared to states like Gujarat (2.9), Karnataka (5.5), Maharashtra (6.1), and Telangana (6.6). Total Revenues of Tamil Nadu Over the last three years period from 2022-23 to 2024-25, the overall revenue of Tamil Nadu increased by 22.7%. Similarly, the total tax revenues and Tamil Nadu‘s Own Tax revenues increased by 29.6% and 29.9% respectively during the same period (See Figure 1).                                                        Source: RBI Report on State Finances 2024-25 Capital Outlay and Expenditure The capital outlay of Tamil Nadu has not increased substantially over the last three years. The share of capital outlay in development expenditure has declined from 19.1% in 2022-23 to 18.6% in 2024-25 (BE). Figures 2 and 3 reveal the substantially decreased overall capital expenditure over the last three years. This shows the poor attention given by the state government during the period.                                                             Source: RBI Report on State Finances 2024-25      

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Internationalising Indian Higher Education by Dr. M.Saravanan

Internationalising Indian Higher Education by Dr. M.Saravanan Internationalising Indian Higher Education Saravanan M January 31, 2025 Higher Education, Public Policy The National Education Policy (NEP) 2020 marks a historic shift in the policymaking for higher education as it aims to internationalise the quality of higher education, while simultaneously attempting to Indianise the sector. Various policy prescriptions of NEP encompass promoting Indian languages, conferring primacy to the mother-tongue at primary schooling, and covering Indian knowledge systems, including tribal knowledge and indigenous and traditional ways of learning, in various disciplines. These would instil a sense of rootedness and pride in India and its rich, diverse, and ancient culture. A detailed discussion about the policy paths for Indianisation would require a devoted space. However, a nation that intends to internationalise its higher education needs to focus on its indigenous strengths to offer a unique and real international learning experience and avoid being a clone of another international education model. The NEP has green-signalled a formal process to internationalise higher education, a topic hitherto witnessed at the margins of policymaking and not as the core. Further, the NEP aims to the improve mobility of students, teachers and researchers across nations, establish highest global standards in education, and nurture young minds to be global citizens exposed to diverse cultures. To this end, it has defined the purpose of education at the sectoral and institutional level, highlighted the different roles institutions of different quality and focus are expected to play, and how knowledge is to be created and disseminated. This perfectly aligns with the definition of the internationalisation of higher education by the eminent scholar, Prof. Jane Knight. While under the ongoing Pradhan Mantri Uchchatar Shiksha Abhiyan (PM-USHA) scheme, some public universities are being supported to enhance their quality and also to collaborate with foreign universities, just as was done in the previous avatar of the scheme, where it went with the name of Rashtriya Uchchatar Shiksha Abhiyan (RUSA), efforts have also been taken up to improve the quality and global standing of institutions under Institutions of Excellence (IoE) programme. While these are generic efforts to improve institutions that would also lead to internationalisation, the UGC has come up with targeted measures to promote internationalisation. In May 2022, the UGC introduced its Regulation delineating the various options of higher education programmes that domestic and foreign institutions can offer collaboratively, like twinning programmes, joint-degrees, dual degrees etc. It also set the conditions for such collaborations and set eligibility standards for the institutions in terms of NAAC accreditation, NIRF or global rankings, to ensure that only institutions of certain proven quality are allowed to collaborate with globally reputed and well-ranked foreign institutions. The UGC also urged all the institutions to set up an Office of International Affairs to function as a single point of contact to take up all necessary action for collaborations with foreign institutions and teacher-student mobility. As per the information available on the website of the UGC, a total of 235 Indian higher education institutions are eligible to collaborate with foreign institutions to offer Twinning, Joint Degree, and Dual Degree Programmes. While collaboration between Indian and foreign institutions is one way to internationalise, the UGC has also embarked upon facilitating the entry of foreign institutions to set-up their own institutions in India, either individually or in association with any other foreign or Indian institution, by notifying another Regulation in November, 2023. It allows Foreign Higher Educational Institution (FHEI) within the top five hundred in the overall category or subject-wise category of global rankings or the institution that possesses outstanding expertise in a particular area. The FHEI has the autonomy to determine the qualifications, salary structure, and other conditions of service for appointing faculty and staff, provided the qualifications of the faculty appointed are at par with the main campus in the country of origin and the international faculty appointed serves at least a semester at the Indian campus. The qualifications awarded by the FHEI in the Indian campus will have the same recognition, equivalence and status that the qualification awarded by the FHEI enjoys in its country of origin. The qualifications awarded by it will also be equivalent to any corresponding degree by any Indian Higher Educational Institution for all purposes. To make the Indian degree programmes comparable to the globally accepted structure, curricular changes have been made like offering four-year undergraduate degree programmes across disciplines, with multiple entry and exit; one-year postgraduate programme, platform for credit accumulation, transfer and redemption by students, etc. A major focus is on constant faculty development and research and innovation, which would lead to enhancement in the quality of higher education. Further, cultural aspects of the diverse Indian sub-continent are also being included in the curriculum, in addition to developing right attitude and skills in students to become a global citizen. Post introduction of NEP, the various measures have been taken to improve quality to international standards, increase global mobility of students and teachers and embed cultural inclusiveness in the mainstream education, which is expected to internationalise Indian higher education holistically. Already few universities have established (or in the process of establishing) their campuses in India including Australia’s Deakin University, which is the first foreign university campus in India, followed by the University of Southampton. It is only expected that the trickle would be followed by a deluge soon. Dr.M Saravanan, is specialised in Higher Education and Founder Secretary of the AgaPuram Policy Research Centre, Erode. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.

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Imperatives of Student-Centric Changes in Indian Higher Education

Imperatives of Student-Centric Changes in Indian Higher Education By Dr. M.Saravanan Imperatives of Student-Centric Changes in Indian Higher Education By Dr. M.Saravanan Saravanan M January 28, 2025 Education, Public Policy, Skills Development Sector The momentous National Education Policy (NEP) 2020 has student-centricity as its core, for the transformational and incremental changes envisaged accord student learning and developmental outcomes the topmost priority. Multiple initiatives undertaken as part of the implementation of the NEP so far have enlarged the range of options available to the students. One of the challenges stifling tertiary education hitherto has been the mandatory forfeiture of all the achievements and efforts of the students in case of discontinuation of the degree before the completion of the requisite duration. This issue has been addressed with the implementation of multiple entry and exit for students. In case a student intends, or is forced due to any unforeseen situation, to drop-out of the programme, say after a year or two, the student can carry the past achievements in the form of credits and rejoin the programme at a later period within the stipulated time, and complete the programme. If a student enrols for a four-year Honours Degree programme but leaves the programme after the successful completion of the first year, the student would be awarded a Certificate. Similarly, for successful completion of two years and three years, a Diploma and Degree would be awarded respectively. The earlier situation of completely losing their credits or marks is not the case anymore. The carrying forward of credits earned till the time of discontinuation and redeeming them later at the time of rejoining the programme is made possible by a mechanism called Academic Bank of Credit, which works similar to a commercial bank. A student is required to open an account on DigiLocker, free of cost, using the Aadhar Number. This student account gets linked to the institution and linked to the programme for which the student is enrolled. Every successful completion of a course in a programme earns credit, which gets accumulated. If a student continues the programmes throughout the duration and the total credit accumulated equals the requisite total credits for the programmes, then the corresponding qualification is awarded. In case the student drops midway, the credits accumulated thus far are retained in the account and can be redeemed whenever the student rejoins the programme and completes it. Until a short while ago, a section of students who are more industrious had a grouse that despite their willingness and aptitude, the rules did not permit them to pursue an additional programme other than the one being pursued. Recent tweaks in regulations have permitted students to take up an online programme along with another regular programme. This allows students to pursue and complete two degrees simultaneously, as online degrees have the same equivalence and validity as that of a regular degree. Post NEP, online education has got more fillip, as the UGC allows up to forty percent of the total credits of a programme through online courses offered under SWAYAM / NPETEL platforms. This allows students two benefits: doing any course of choice even if the same is not available in the institutions where the student is enrolled and accessing the course at any time of choice or convenience. In addition, new regulations have also been introduced to encourage eligible universities to offer online programmes. Further, under the Choice Based Credit System (CBCS), which is in vogue for over two decades, students have some liberty to choose a few courses of their choice under each programme. Post NEP, the UGC has brought in a revised curricular framework to also include skill-based or vocational courses mandatorily in each programme. The emphasis given to making the institutions multidisciplinary automatically expands the horizon of choices for students to choose from. Using English as the medium of instruction for many programmes has posed and continues to pose challenges to students who have had their schooling in their mother language. Following the mandate of NEP to introduce programmes in the languages, degree programmes are offered in languages other than English by many universities. Doing higher studies abroad after graduation, especially doctoral programmes, has been a dream choice for some students. One issue for such students was the structure of the undergraduate students, as the Western countries and those that modelled on that have four-year undergraduate programmes even for humanities and social sciences, whereas in India they were three-year programmes. With the introduction of four-year undergraduate programmes, the structure of Bachelor’s programme is now aligned with the global framework, easing access to higher studies abroad for interested students. There are cases when collaborations result in better services being offered. To enable Indian institutions to associate with globally top-ranked institutions, the UGC has made regulatory changes, whereby the domestic and foreign higher education institutions can now offer a bouquet of programmes together. Further, the best international institutions may also offer their services individually to the students by opening their campuses. While entry into quality international institutions has become possible and easy, the quality of the programmes offered in India has to be of the same quality offered in the main campus of their country. It is hoped that governments and institutions constantly reform the system to remain student-centric, to remain relevant and meaningful. Dr.M Saravanan, is specialised in Higher Education and Founder Secretary of the AgaPuram Policy Research Centre, Erode. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.  

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Expansion of City Corporations and Municipalities Merely Does Not Guaranty Quality of Services and Facilities in Tamil Nadu

Expansion of City Corporations and Municipalities Merely Does Not Guaranty Quality of Services and Facilities in Tamil Nadu By B.Chandrasekaran Expansion of City Corporations and Municipalities Merely Does Not Guaranty Quality of Services and Facilities in Tamil Nadu By B.Chandrasekaran Chandrasekaran Balakrishnan January 28, 2025 Democracy and Institutions, Public Policy, Tamilnadu Economy, Urban Development As the nation embarks on Viksit Bharat@2047, its ambitious plan to make India a developed country by 2047, it is imperative that the country develops organically with the local bodies driving the economic development and also benefitting from it. If this opportunity is missed, the gains derived from the 73rd and 74th Constitutional amendments would dissipate. To this end, the second-generation institutional reforms of urban local bodies (ULBs) need to be taken up. Despite new initiatives like Smart City Mission, AMRUT, etc., the ULBs continue to face challenges in providing basic civic facilities like water supply, sanitation, urban public transport, all-weather road connectivity, stormwater and drainage, solid waste management, sewage, public sanitary facility, street lights, safety, and security, etc. Hamstrung by inadequate decentralisation, the local governments are unable to raise funds and channelise development projects to solve physical infrastructure facilities. Moreover, the funds allocated by the states are always disproportionate to the requirements and spending on developmental projects is scarce and riddled with quality issues. Status of Local Bodies in Tamil Nadu Take the case of Tamil Nadu, which envisions becoming a trillion-dollar economy by 2030. While the State is the most urbanised (53% population) in the country, the civic facilities that its cities and town offer to its residents are no different from any other poorly managed cities and towns in the country. The predominant reason is the lack of financial and administrative autonomy of the ULBs. The recent efforts to improve some of the services have also not yielded sustainable results. Given this background, the government of Tamil Nadu has recently announced proposals to expand the existing geographical coverage of urban ULBs limits by merging nearby municipalities into city corporations, town panchayats into municipalities, and village panchayats into town panchayats. Some of the major factors for the expansion of urban areas include increase in population, popular demand from people, and an increase in tax revenues. The following are the key announcements of the Government of Tamil Nadu’s Department of Municipal Administration through the issue of G.Os notified on 31st December 2024: Expansion of 16 municipal corporations including Greater Chennai, Coimbatore, Cuddalore, Dindigul, Erode, Karur, Hosur, Madurai, Salem, Tiruchirapalli, Tiruppur, Avadi, Kumbakonam, Thanjavur, Thoothukudi, and Sivakasi by annexing 4 municipalities, 5 town panchayats and 149 village panchayats; 41 municipalities including Tiruvarur, Tiruvallur, and Chidambaram, are to be expanded by annexing 1 town panchayats and 147 village panchayats; Formation of 13 new municipalities including Kanyakumari, Harur, and Perundurai; Formation of 25 new town panchayats including Yercaud, Kalayar Koil and Thirumayam; and Annexation of 29 village panchayats with 25 town panchayats. Advantages of Geographic Expansion Expansion through mergers increases land values thereby boosting the real estate and related sectors. The expanded city corporations and municipalities may get relatively higher fund allocation for improving the infrastructure development facilities and services. Decentralised regulation of planned development of the city at least on paper if not for implementation in letter and spirit. Disadvantages of Geographic Expansion The citizens of expanded ULBs may bear higher taxes for services like water, property tax, municipal waste disposal, etc. The expansion may result in parent ULBs being unable to cater to the needs of its newer territory. The newly added areas either continue with existing services or face neglect having lost its erstwhile independent identity. Incompatibility between the vision of the parent ULBs and the needs of the merging units. Issues with Expansion through Mergers Often ULBs are expanded for political reasons or to obtain approvals from the Centre for new projects, like metro train services, which require a particular size of population. Further, ULBs are already financially stressed and the state governments do not give adequate funds after the merger, aggravating their financial position. Furthermore, expansion through merger goes against the principle of local governance where small is considered beautiful. There is absolutely no need for mergers just to develop infrastructure, which may be developed as there are. Prerequisites for Expansion Any merger of ULBs should be done only after existing areas of an ULB achieve the desired levels of reasonable, minimum standards of urban infrastructure and quality of life. Further, a thorough study has to be made on the likely benefits and issues with prospective mergers from administrative, financial and other perspectives. If ULBs are really empowered through adequate decentralisation, mergers may be proposed by the ULBs themselves or, they may explore partnerships and sharing of resources without formal mergers. All the decision-making process has to be decentralised, moving closer to the local level and ward level for the participation of people. Only the technical aspects have to be decided at the state or regional level to support ULBs effectively and on timely. Anything on the contrary would create chaos as witnessed in big cities. like recent floods and inundations during regular monsoons. Several years ago, the scheme on Providing Urban Amenities to Rural Areas (PURA), a vision of Dr APJ Abdul Kalam, was implemented in a few states like Andhra Pradesh, Kerala, Maharashtra, Puducherry, Rajasthan, and Uttarakhand. It is a Public Private Partnership scheme with a clear framework for governments, state governments, the private sector, and local government to take advantage of improving facilities and services with 10 years of maintenance services. Why not try something like this new scheme to make our semi-urban and rural areas with all infrastructure facilities? B.Chandrasekaran is an Economist and Founder Chairman of the AgaPuram Policy Research Centre, Erode. Views expressed by the author are personal and need not reflect or represent the views of the AgaPuram Policy Research Centre.  

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Financial Health of Municipal Corporations in Tamil Nadu by B.Chandrasekaran

Financial Health of Municipal Corporations in Tamil Nadu by B.Chandrasekaran Financial Health of Municipal Corporations in Tamil Nadu by B.Chandrasekaran Chandrasekaran Balakrishnan January 3, 2025 Public Policy, Tamilnadu Economy, Urban Development Introduction The federal governance structure has envisaged a three-tier institutional mechanism for national, State-level, and local-level governance. While the system looks theoretically sound, the issue with the local bodies is that they exist only for elections, where political parties compete to have a maximum number of their members in office. Lacking institutional, administration, and financial autonomies and the associated responsibility and accountability, the local bodies exist as mere extensions of state governments with elected office-bearers having limited authority. One of the prime reasons for this unfortunate reality is the continuing colonial mindset, which promoted centralised governance. Contrary to the widely held belief that the rural local bodies (Village Panchayats) and urban local bodies (Town Panchayats, Municipal Corporations, and City Corporations) became functional only after the 73rd and 74th Constitutional Amendments, India has a long history of local governance, with panchayati system traced back to ancient vedic era. As for modern Indian references, Shri.VS Srinivasa Sastri, a freedom fighter and classical liberal thinker wrote a pamphlet titled “Self-Government for India-Under British Flag” in 1916, delineating the existence of local governance in India for long and listed 18 major subjects of local governance for administration and delivery of services for people’s welfare. Financial Autonomy of Local Bodies To exercise institutional autonomy, the local bodies need financial strength. An analysis of the financial status of the local bodies reveals the actual achievements and challenges of the local bodies. In this connection, the reports of Reserve Bank of India on the Municipal Corporations (MCs) and Panchayati Raj Institutions (PRIs), throw adequate light on their financial status and challenges. The latest RBI’s Report on Municipal Finances released on November 13, 2024, with the theme of “Own Sources of Revenue Generation in Municipal Corporations: Opportunities and Challenges” provides a first-of-a-kind analysis of the budgetary data for 232 municipal corporations (MCs), which covers more than 90% of total MCs in the country. The main findings are reproduced below: While the revenue account of the MCs has remained in surplus, their heavy reliance on transfers and grants from upper tiers of government continues. The own revenue sources are not adequate for meeting the revenue expenditure of most of the MCs, thereby affecting their functional and financial autonomy. Comprehensive reforms, including the adoption of technologies like GIS mapping and digital payments, rate rationalisation and their periodic revisions as well as better monitoring to plug leakages can help in the augmentation of their own source revenues. Key statistics The following are the key data reproduced from the report: MCs in Maharashtra, Gujarat, Karnataka, Madhya Pradesh, Haryana, and Telangana have surplus budget of above Rs.1,000 crore in 2023-24. MCs in Delhi, Andhra Pradesh, Rajasthan, Odisha, West Bengal, and Tamil Nadu have surplus budget of above Rs.100 crore. However, some MCs in Tripura, Jharkhand, Himachal Pradesh, Bihar, Chhattisgarh, Jammu and Kashmir, Uttar Pradesh, and Kerala have deficit budget, ranging from Rs.2 crore to over Rs.700 crore. Interestingly, Kerala, which is widely believed to have a strong local body system, has budgeted for a revenue deficit of Rs.789 crore for 2023-24. The revenues of MCs as a proportion of the revenues of the respective State governments vary widely. Delhi (34.5%), Maharashtra (14.1%), and Gujarat (7.8%). The revenue receipts of MCs amounted to 0.6% of GDP in 2023-24. Tax revenues are the largest source of revenue of the MCs (30%) followed by revenue grants, contributions, and subsidies (24.9%) and fees and user charges (20.2%). The ratio of MCs’ tax and non-tax revenue to the respective State government’s tax and non-tax revenue varied across States, indicating a vertical imbalance. Property taxes are a major source of own tax revenue of the MCs in India, constituting more than 16% of revenue receipts and more than 60% of their own tax revenue. The total expenditure of the MCs was at 1.3% of GDP. The revenue expenditure/GDP ratio hovered around 0.5 per cent of GDP, while the capital expenditure/ GDP ratio was 0.8%. The share of revenue expenditure in total expenditure was at 38.5% The proportion of capital expenditure in total expenditure for the MCs was 61.5% as compared with 24.8% and 21.4% for State governments and the Central government, respectively. The ratio of revenue expenditure to capital expenditure was 0.63 for the MCs as against 3.7 for the Centre and 3.0 for the States. Status of MCs in Tamil Nadu By the end of the financial year 2023-24, Tamil Nadu had a total of 21 MCs, up from 15 MCs in 2020-21. By mid of 2024-25, the state has 25 MCs. The own tax ratio of MCs in Tamil Nadu was 44.3% as compared to the highest level at 53.8% in Karnataka and 50.3% in Telangana. The MCs in Tamil Nadu were able to maintain the ratio of capital expenditure with more than 50% in 2023-24 (BE) like in Maharashtra, Andhra Pradesh, Telangana, Jharkhand, Uttar Pradesh, Odisha, and Bihar. The per capita capital expenditure of the MCs in Maharashtra, Uttar Pradesh, and Tamil Nadu exceeded the All-India level (Rs.11,532/-) during 2023-24. However, per capita spending by MCs in Tamil Nadu was far behind the level of Maharashtra. The ratio of Revenue Expenditure to Capital Expenditure in 2023-24 (BE) for MCs in Tamil Nadu was below the All-India Level (0.63). Also, Own Source Revenue as a Ratio of Revenue Expenditure (Average of 2020-21 to 2022-23) in Tamil Nadu was below the All-India Level. MCs’ Tax revenues increased by 10.28% to 44.27% in 2023-24 from 33.99% in 2019-20. Revenue expenditures for operations and maintenance increased by 7.29% to 34.72% from 27.43% during the same period. Tables 1 and 2 show the details of the same. Table.1: Revenue Receipts of Municipal Corporations in Tamil Nadu (Figures in %)     2019-20 Accounts) 2020-21 (Accounts) 2021-2022 (Accounts) 2022-23 (Revised Estimates) 2023-24 (Budget Estimates) A. Tax Revenue 33.99 31.13 34.26 45.61

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BJP Manifesto 2024 Lacks Major Structural Reforms

BJP Manifesto 2024 Lacks Major Structural Reforms BJP Manifesto 2024 Lacks Major Structural Reforms Chandrasekaran Balakrishnan May 17, 2024 Public Policy The major political parties’ election manifesto provides their approach, thinking, and understanding of the current issues and challenges faced by the economy, society, and geopolitical nexus with national and international scenarios. However, what is apparently missing from both the Congress and BJP election manifestos are the intentions to address the long overdue structural reforms, which are embedded with institutional reforms and have huge potential for positive impacts on the economy, society, and welfare of the people. Most election manifestos’ promises are designed as deceptive ploys for perception changes among voters in general and targeted segments in particular. Bharatiya Janata Party’s 76-page manifesto for the 2024 general elections broadly outlines its intention for the continuity and expansion of its several welfare initiatives of the last decade. The party’s manifesto focuses on key segments like rural areas, youth, farmers, women, and the middle class. The party counters last decade’s performance with that of the decade before 2014, wherein the country faced corruption, policy paralysis, and governance failures by the government of those times. In these fierce debates, there is not much the Congress party can defend itself with since its weaknesses are at multiple levels, from organisational to leadership at national and regional levels. Unlike the Congress Party manifesto, the BJP has largely avoided any upfront freebie announcements in their manifesto. Nevertheless, there is a huge contrast in terms of aspirations of the segments vs the facilities and services available at present for these segments. However, evaluating each of the initiatives of the BJP is inevitable because ascertaining the long-term impacts created has to be done independently. The party might have touched every other aspect of  society and the economy, but the institutionalisation of some of the aspects, like decentralisation and empowering the local bodies, especially the urban local bodies, the party, or the government, has not done much yet. Inadequate institutional reforms lead to a lack of accountability, causing delays and resource wastage year after year for quite a long time. Given the mixed performance in urban and city development initiatives over the last decade, the BJP’s promises to shift the urban landscape towards providing world-class infrastructure and promoting sustainable living are ambitious undertakings. Accomplishing these goals within five years is no small feat and would require significant efforts from the government machinery, particularly in addressing the existing challenges within the local urban governance structure. These challenges include bureaucratic hurdles, rent-seeking practices, inadequate efforts to engage urban communities, a lack of independent evaluations, and the underutilization of technological tools in service delivery. It appears that the BJP’s election manifesto was crafted by individuals or a team with ambitious goals, possibly overlooking the complexities and obstacles inherent in achieving such sweeping changes within the specified timeframe. Despite these challenges, the BJP has promised the following sweeping announcements made in the manifesto, which are impossible to achieve in a matter of few years without decentralisation and institutional reforms for cities’ overall governance systems: 1. Creation of new satellite townships near metro cities across India through a combination of reforms and policy initiatives. 2. Create unified metropolitan transport systems that integrate multi-modal transport facilities and reduce commute time in cities. 3. Create water-secure cities, leveraging best practices for wastewater treatment, aquifer recharge, and smart metering for bulk consumers. 4. Long-term infrastructure projects with centre-state-city partnerships with a vision to revitalise our urban landscapes and enhance the quality of life for our citizens. 5. Develop more green spaces like parks, playgrounds, etc., reviving water bodies and developing natural spaces to make cities more adaptable, sustainable, and people-friendly. 6. Continue eliminating open landfills to manage all kinds of waste being produced in Bharat through ‘The Waste to Wealth Mission’. 7. Undertake the creation of the Digital Urban Land Records System.   8. Work with state governments and cities to encourage them to create a modern set of legislation, by-laws, and urban planning processes using technology.” The central government has to initiate a vibrant public policy dialogue with state governments and local governments for effective implementation of each of the above aspects of bringing about transformational changes in the urban landscape. Moreover, without institutional and decentralised reforms to empower the urban local bodies to deliver social, physical and digital infrastructure, the BJP’s following promises would end up in a nightmare in years to come: “We have initiated metro in 20+ cities over the past decade; we will expand the metro network in major urban centres, ensuring last mile connectivity…We will construct ring roads around major cities to improve mobility and decongest cities…effective use of PM Gatishakti National Master Plan. We will undertake the creation of the Digital Urban Land Records System. We will work with state governments and cities to encourage them to create a modern set of legislation, by-laws and urban planning processes using technology.” However, the BJP party manifesto assures that “we will undertake more institutional reforms and simplify processes using technology to ensure that citizen-government interaction is significantly improved,”  but it is not all that easy to do urban governance reforms without learning from the past. Any government, whether central, state or local, has to first recognise the facts of what went wrong for all these years in terms of the inadequate delivery of services and facilities that the people have demanded and the rise of aspirations. also, it is strange that even after a quarter century, the major political parties are not openly advocating implementing the 73rd and 74th Constitutional Amendments in true letter and spirit on not just the funds and functions but reasonable administrative and execution autonomy. The BJP’s promises should have been more substantive on concrete steps for decentralisation and institutional reforms rather than the currently proposed several bunch of guarantees with overambitious minimum governance guarantees at the local body level. The party has promised to “take further steps to facilitate the fiscal autonomy and sustainability of Panchayati Raj Institutions.” While these institutions are already distanced from

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Same-Old-slogans-and-Appeasement-Politics-in-Congress-Manifesto

Same old slogans and appeasement politics in congress manifesto Same old Slogans and Appeasement Politics in Congress Manifesto Chandrasekaran Balakrishnan April 30, 2024 Public Policy The Indian National Congress Party recently released its 48-page manifesto, titled “Nyay Patra,” for the general elections of 2024. As we examine the manifesto, it’s apparent that the party has adhered to traditional formats reminiscent of past manifestos. The Nyay Patra is a mix of old rhetoric and questionable policy directions that raise serious concerns.The manifesto’s overarching theme seems rooted in the party’s traditional approach to governance, prioritising welfare schemes over robust economic growth strategies and development-driven governance. While the intention to uplift the socio-economically disadvantaged is noble, the reliance on handouts and appeasement politics may not address the root causes of poverty and inequality. There is room for a broader perspective that encompasses not just wealth distribution but also strategies for wealth creation and equitable growth.Instead of focusing on institutional reforms to strengthen the nation’s governance framework, the manifesto appears to propagate a divide-and-rule mentality, emphasising identity-based politics rather than inclusive nation-building. This is evident in the party’s insistence on long-standing minority appeasement policies, which risk perpetuating social divisions rather than fostering genuine integration. (Refer to pages of 4, 6, 7, and 11 of the Congress Manifesto-2024 on Equity, Religious, and Linguistic Minorities).Furthermore, the manifesto’s lack of emphasis on economic reforms and job creation reflects a worrying disconnect from the realities of the global economy. The proposal to create three million government jobs without addressing the need for a conducive environment for private sector growth is shortsighted and could exacerbate fiscal pressures. The manifesto’s failure to address the dynamics of Indian labour markets, particularly in sectors like rural-based agriculture, allied activities, and urban development, is a glaring oversight. Southern and Western states, which are relatively more developed, already face a significant shortage of semi-skilled and skilled manpower across sectors. Moreover, historical evidence highlights the adverse effects of artificial wage increases under schemes like MGNREGA, contributing to inflationary pressures. Despite these well-documented challenges, the Congress Party’s manifesto fails to learn from past failures, reflecting a lack of foresight and concrete developmental focuses.Additionally, the manifesto overlooks emerging challenges such as technological disruption and the need for digital infrastructure development. Amidst a dynamic technological revolution reshaping social and economic landscapes, the Congress Party’s manifesto appears disconnected from emerging realities. The traditional social stigma of caste dominance, which is gradually fading, remains unaddressed on the party’s agenda. The market process has the potential to mitigate caste-based disparities by ensuring equitable access to essential services and opportunities, yet the manifesto fails to recognise this transformative potential.Furthermore, the party’s oversight of emerging growth centres and the pressing need for world-class social and economic infrastructure underscore a lack of vision for rural-urban transformations. However, this aspect seems overlooked in the party’s agenda While some initiatives outlined in the manifesto, such as enhancing institutional credit to SC and ST for home-building, starting businesses, and purchasing assets, providing sports scholarships of Rs 10,000 per month for talented and budding sportspersons, and introducing reforms in industrial and labour laws, deserve recognition, they are overshadowed by the overall lack of vision and strategic direction.Moreover, it is crucial for the manifesto to outline concrete strategies for key areas such as constitutional reforms, judiciary strengthening, anti-corruption measures, and environmental protection. Emphasising national security, including measures to counter terrorism, should also be a priority. Lip service paid to these concerns without concrete action plans undermines the credibility of the document and the party’s commitment to effective governance.It’s worth noting that the Congress Party’s manifesto reflects an activist approach rather than embodying the maturity expected of a longstanding political party’s document. While the manifesto outlines several initiatives, some of its proposals, which are listed below, raise concerns: 2024 Congress Manifesto Promises Consequences Caste Census     In 21st-century India, the caste census is not the first principle for empowering the different communities. Unlike in the past, today we have many better ways of empowering the underprivileged communities in India through more decentralization, community participation, and blended technological use in the delivery of services and facilities. We must learn from history how we must not use poor people with caste tags as the only tool to woo them for anything but for vote sake. To raise the 50% cap on reservations for SC, ST and OBC   The rise of reservation caps cannot be the only solution but better quality of education and facilitating productive employment opportunities are actual empowerment for communities. Reservation of 10% in jobs and educational institutions for Economically Weaker Sections (EWS) will be implemented for all castes and communities without discrimination    This is a very vague promise. Stating “all castes and communities without discrimination” does not make any sense. Without improvements in the quality of education affirmative action measures will not achieve the desired goals even after a few decades.   Reservation in private educational institutions for SC, ST, and OBC   This is a very dangerous promise that will destroy the freedom of enterprises and economic freedom that we have unleashed after the 1991 reforms. Whatever the quality of education is found in the private educational institutions will be faced with grave situations for undermining the quality. Public Procurement Policy will be expanded to award more public works contracts to contractors belonging to the SC and ST communities.    This has not helped the targeted communities for decades. From these same communities, there are enterprises that are supplying goods and services to world-class projects with high quality and innovations in the products. Economic empowerment of minorities is a necessary step for India to realise its full potential  Without improving the quality of education to the communities including minorities, the promise of economic empowerment will not be feasible. The Rajasthan Model of cashless insurance up to Rs. 25 lakhs will be adopted for universal healthcare.    This promise for entire country coverage would not be feasible given the fiscal constraints faced already. However, the promise can be targeted at the needy people like the elderly population

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