New Delhi: India's rapid urbanization clearly indicates an inescapably urban future. Cities are emerging as the engines of economic growth. Simultaneously, rising migration is filling urban poverty. It is, therefore, critical to preserve and promote the economic and social viability of towns. Cities, however, seem unprepared to contend with these emerging challenges.

The Constitution (74th Amendment) Act clearly stipulates the need for decentralized urban governance and the empowerment of cities as the third governmental tier. It is widely recognized that such empowerment is critical for the emergence of cities that are inclusive, transparent, pro-poor and gender-centric.

The ability of urban local bodies (ULBs) to meet the urban challenges depends in large measure on their ability to function as the empowered third tier of governance.

Country Programme (2003-2007) of the UNDP aimed at capacity building for Decentralised Urban Governance and was designed to enhance institutional and human capacities and bring about good urban governance in the identified ULBs. The Project Documents were signed between DEA, Ministry of Finance, Ministry of UD and UNDP in August 2005. UNDP envisaged providing total assistance of US $2 million to implement the project covering 16 ULBs in four States - Kerala (Cochin, Thiruvanathapuram, Alleppey and Palghat), Orissa (Puri, Sambalpur, Cuttack, and Berhampur), Rajasthan (Bharatpur, Bhilwara, Sri Ganganagar, and Tonk), and Uttar Pradesh (Mathura, Varanasi, Meerut, and Allahabad).

Under this project National Municipal Accounting Manual (NMAM) at the State level with State specific modifications were adopted and operationalised in all the 16 ULBs.

Old pattern of accounting was shifted to accrual based financial accounting and management. Credit ratings of 9 ULBs (Non-JNNURM cities) were done by a credit rating agency approved by SEBI. This also includes capacity building of municipal staff to carry out the task in an efficient manner after migration to Double Entry Accounting system by the Municipality.

Carrying out rapid assessment of cities and preparation of baseline data leading to formulation of City Development Plans for non-JNNURM cities (Nine in numbers) were covered under the project.

Implementing property tax reforms with a view to achieving substantial increase in property tax collection in all the 16 ULBs has borne some fruits. All the 16 ULBs now have the mechanism to collect property taxes on-line.

The above Programme was launched on November 1, 2006. The Programme ended on June 30, 2008.

To mark the closure of the Programme, a Workshop was organized by the Ministry of Urban Development in Vigyan Bhawan which was attended by the representatives of the concerned State Governments, Municipalities, State-level agencies and other international donor agencies.

During the workshop, the municipalities show-cased the achievements made by them in implementation of the above components of the project. During the deliberation, it was informed that as a result of property tax reforms, the municipalities would be able to generate more revenue by levy of this tax on all such properties which have been assessed under the project.

City Development Plans (CDPs) have been prepared for the first time in most of the cities. It is hoped that these cities would be able to plan their resources in such a way to achieve long-term objectives of CDPs.

By adoption of double entry accounting system, the concerned municipalities would now be in a position to keep their accounts in a more systematic and scientific manner to reflect their actual financial position and manage their resources in a more judicious manner.

At the end of the workshop, the Ministry of Urban Development emphasized a need to carry forward the above initiatives on a sustainable basis in the concerned municipalities so that they function in a more efficient and transparent manner to fulfil the aspirations of the citizens.