Government of Telangana has constituted its First State Finance Commission (SFC) for the award period (2020-2025). Sri G Rajesham Goud is the Chairperson, Sri M Chennaiah is the Member and Sri Suresh Chanda, IAS is the Member Secretary of the Commission.
The Commission will play a key role in the inter-governmental transfer of resources from State to Urban Local Bodies (ULBs) and Rural Local Bodies (RLBs). The Commission will also outline recommendations for improving the financial position of the ULBs and improve service delivery standards in cities and towns of the State.
The key findings of the study are given below:
While service delivery situation with respect to water supply, solid waste management, drainage etc has improved in ULBs over the last few years, gaps exist and needs considerable investments.
Hyderabad city, because of its importance for the State of Telangana, needs considerable investment support in the areas of roads, sewerage, drainage etc.
The financial situation of ULBs is weak and they are barely able to cover the cost of administration and O & M expenditure. The capital investment requirement to address infrastructure needs cannot be financed with modest revenue surplus being generated by ULBs.
ULBs, especially GHMC should increase O&M expenditure to improve the quality of infrastructure such as roads, parks, footpaths etc.
The estimated additional financial requirement of 73 ULBs including GHMC is estimated at Rs 40720 Crores over five years.
Significant reforms are needed to address financial needs and service delivery improvement in urban local bodies. These could include: 1) coverage and collection efficiency improvement of property tax, vacant land tax and other non-tax revenues, 2) land monetization measures, 3) promoting PPP for amenable municipal infrastructure areas 4) increase share of assigned revenues from State to ULBs 5) increase grant funding from State SFC 6) strengthening property Tax Board 7) integrated spatial data management system and 8) promoting citizen engagement in municipal management.
There is a sense of urgency for improving quality of life in urban areas in Telangana and strong financial support from the State coupled with accountable municipal management at ULB level is the need of the hour. Further, Hyderabad needs special attention and support.