Urban Reforms in Vijayawada City and their impact on people

URBAN REFORMS INITIATED BY  VIJAYAWADA MUNICIPAL CORPORATION

Urban reforms were initiated in Vijayawada Municipal Corporation (herein after referred as VMC) immediately after the Municipal Elections had been over in September 2005. Though the Congress (I) has emerged a single Largest Party in VMC, CPI candidate took over the charge as Mayor as per the electoral seat adjustment. The Mayor from CPI continued for one year only. Later Candidate from Cong(I) took over as

Mayor. The Local Parliament Member belonging to Cong (I) made efforts to join Vijayawada City in to JNNURM. The fact was that Vijayawada City having the population a little bit over 8 lakhs as per 2001 Census was not eligible for JNNURM. But our MP and the then Mayor manipulated the population figure to 10 Lakhs by adding the population of surrounding Gram Panchayaths naming it as Urban Agglomeration. Thus the curtain was raised to Urban reforms in Vijayawada City.

The process of JNNURM was started in March 2006 in Vijayawada City. VMC, without any consultation with General Body of VMC Council, prepared a City Development Plan (CDP) and sent to Urban Development Ministry for the purpose of JNNURM. Getting a tip off about this, CPI(M) corporators demanded to reveal the facts about JNNURM on the floor of General Body of VMC Council. Thus came to light the whole episode of JNNURM. Then the VMC formally placed in the agenda about the JNNURM Project. Then the CPI(M) objected this and advocated about the ill effects of JNNURM on the basis of in-built conditions. Since then, CPI(M) has been constantly waging the struggles against the ill effects of these Urban reforms.

On the basis of the CDP submitted by VMC, Govt of India sanctioned 20 projects worth Rs 1422.67 Crs to Vijayawada City. Out of these 20 Projects, 12 projects are under UIG worth Rs 679.36 Crs and 8 projects are under BSUP worth Rs 743.31 totaling Rs 1422.67 Crs. Of this, GOI share shall be Rs 711.34 Crs, GOAP share Rs 284.53 Crs and VMC share Rs 426.80 Crs.

Till today, VMC has expended Rs 678.28 Crs on these projects. Out of the amount thus expended, GOI released Rs 348.35 Crs and Govt of AP released Rs 122.15Crs .The remaining Rs 207.79Crs have been expended by VMC. The projects remained uncompleted. To complete these projects, it needs another Rs 751 Crs as estimated. GOI and GOAP are yet to release Rs 362.99 Crs and Rs 162.38 Crs respectively.

The above are the figures of the arithmetic. The fact is that out of 20 projects approved worth Rs 1422.67 Crs, 5 projects worth Rs 653.30 Crs under BSUP pertain to housing for urban poor. It is to be noted that both Central and state Governments hitherto owned the responsibility of providing Houses to the poor. Now after the advent of the JNNURM , the Governments abdicated this responsibility and included in to JNNURM. So, the Housing projects in JNNURM absorb 45% of total cost of all Projects. The remaining 55% (worth Rs 769.37Crs) is intended for urban Infrastructure.

Now the GOI is not releasing its remaining share for these projects not because of incompletion of these projects started. But it stopped releasing the funds advocating that VMC has not implemented all the conditionalities enshrined in JNNURM. Now it is pressurizing the VMC to implement them in order to get the unreleased portion of the GOI share released.

There is another fact which is detrimental to the interest of ULBs. As per the first State Finance Commission (SFC) recommendations, the state government has to allocate 39.24% to Local Bodies from its own revenue earnings. State’s Own revenue earnings means the total budgetary Income minus the GOI grants to state. The GOAP agreed these recommendations in toto. But setting aside its own agreement, GOAP has been allocating to Local Bodies around 17%. Had the GOAP allocated the funds in accordance with 1st SFC recommendations, VMC would have received around Rs 1093 Crs from F.Y 2005-2006 to F.Y 2010-2011 unconditionally. But the state GOAP stopped releasing the unconditional funds to VMC from Budget on the pretext of giving its 20% share to JNNURM It has released unconditional fund of Rs 7 Crs only to VMC since 2005-2006 to2010-2011(up to August). But it released, as narrated above, only Rs122.15 Crs to JNNURM. So, the GOAP stopped releasing the funds sans conditions and started releasing the funds with harmful Conditions. What is to be noted here is that, even as the VMC agreed to implement the conditionalities enshrined in JNNURM, both GOI and GOAP do not release the funds to meet all the expenses of VMC. They are giving the funds under JNNURM for approved Projects only. Showing these funds, GOAP stopped releasing the funds from Budgets. In order to meet the other Expenses as well as its 30% share to JNNURM, VMC thus is forced to explore other avenues to reap the revenue to its coffers. I will explain latter how VMC is resorting to burden the People.

From the above, it is clear that the Governments, Both state and Central, abdicated the responsibility of providing funds for developmental activities in the Cities. But Local Bodies have to get the money to meet the Expenses. How does a local body get money without State Government’s allocation for Developmental activity? To meet this question, a new argument has been heralded. Hiding the fact that the State Governments have to allocate the funds from its Budgets to Local bodies for Developmental Works, GOI coined a new argument in JNNURM that the Property Tax is the main source for Local Body’s Income in order to fill the coffers of the Local Bodies. The main intention of this argument is to make the people agree not only to bare the entire costs of Local Bodies but to get the people's approval for evading the allocations to Local Bodies from Budgets. Unless this argument is encountered, these Governments will press the people under the yoke of heavy burdens and the Governments enjoy the taxes collected from the people in providing concessions to the rich, without parting them to the amenities for Citizens.

Now Let us come to the topic how the in-built conditions of JNNURM are being implemented in Vijayawada City and how the people are burdened.

The first and foremost thing to be noted is that after the advent of JNNURM, the VMC started counting the cost for each individual work in stead of arriving total expenses for the Year for running the entire VMC. For example, VMC is calculating the income and expenditure of Drinking water alone. To remove the shortage in income is to collect the entire cost for providing Drinking water from People without getting the funds from the Government. It means Government will not provide any fund for Drinking Water. Thus the Government is abdicating the responsibility of providing safe drinking water. To meet this object, VMC is installing water meters for domestic connections also. Like wise, VMC is going to levy the user charges on Citizens for Garbage Collection in order to meet the entire cost. For changing the title of a property in the municipal records, VMC started collecting Rs 250/- per every one Lakh value of the property. Issuing of Birth and Death Certificates have become costly. Property Tax increased to the tune of 350%. After a stiff resistance from the Citizens led by CPI(M), VMC stopped for the time being implementing the hike for residential houses. However, VMC prepared tax books with the hiked Property Tax which may be implemented at any point of Time. Amounts in the name of donations for giving Under Ground Drainage Connections are collected heavily. This donation is Rs 2500/- for first Closet and Rs 1250 for each additional closet. Fees are collected for using play grounds/stadiums. Rents are collected from the users of School premises.

Another noteworthy feature of the JNNURM is the privatization of Public Properties under the rubric of Public Private Partnership (PPP). The properties owned by VMC is being handed over to Private Capitalists in the name development under PPP. For example a Piece of Land more than 3000 sq yards owned by VMC has been handed over to private owners for constructing more than 32 apartments of which 12 apartments will be given to VMC. The rest of them will be owned by the developer. Now the rulers are endeavoring to handover one existing market place located at the heart of the City to private persons in the name of development. The maintenance of income generating parks is being handed over private contractors while non-income generating parks are handed over to colony associations. All the Function Halls owned by VMC has been handed over to Private Contractors. Huge amounts are collected from the users of these Function Halls.

There are conditions in JNNURM which has to be fulfilled by the State Government. The legislations or amendments being made by the sate Government in accordance with conditions in JNNURM to existing laws are applicable to the entire state. For example there are two conditions in JNNURM. One is to abolish the Urban Land ceiling act and another is to bring down the registration Charges to 5%. GOAP abolished the Urban Land ceiling act allowing the capitalists to own the Land as much as they can buy. This leads to the scarcity of land not only to the poor but to the Government itself for implementing its programs like Housing etc. Another major implementation made by our state Government is to bring down the registration Charges. Previously, our Government used to collect 13 % of the Value for the property Registration towards registration Charges. Of this 13%, 6 % used to go to concerned Local bodies and remaining 7% to Government of AP. After the advent of JNNURM, these charges were brought down to first 9 %, then to 5%. Owing to this, Local bodies lost the income. In normal Course, the Income to the state Government should be lessened. In order not to lessen the income from registrations to sate coffers, the GOAP increased the land values. The more is the land value, the more is the income to the coffers. This has its bearing on the Vacant Land tax (VLT). 0.5 % of the Land value is collected by VMC towards VLT. As land values increased, so the VLT increased burdening on the Citizens.

Another important feature of these reforms is to emasculate the Local Bodies. In pursuance of the conditions in JNNURM, GOAP started to intervene in the General Council decisions. It started to abolish the resolutions made by VMC general Body however useful to people. Nevertheless, it started to issue GOs directing the Commissioner to implement by setting the elected representatives aside. It is gradually undermining the democratic process in contravention to the 73 and 74 amendments of Constitution.

From the above, we can deduce that the essence of Urban reforms is 1) to abdicate the responsibility of Local developmental activities by the Governments 2) to allow the private Interests or corporatists to plunder the people in the name of public Private Partner ship and 3) to privatize all the urban services and 4) to entrust the public Lands/properties to Private Interests.

Now our path is clear. We have to struggle 1) to ensure the democratic process 2) for the achievement of Share from the state Incomes to Local Bodies 3) against the privatization of Public properties and public amenities.