Suggested Reforms of Urban Local Bodies

RBI survey of 221 municipal corporations (2020-21) revealed that more than 70% saw a decline in revenues; in contrast, their expenditure rose by almost 71.2%.
The 12th Finance Commission encouraged the use of the geographical information system (GIS) and digitization to improve property tax administration.
The 13^th Finance Commission mandated the setting up of the State Property Tax Board as one of the conditions necessary for performance grant eligibility of states.
The aim of the State Property Tax Board is to help municipal corporations and municipal councils to put in place a transparent and efficient property tax regime.
The 14th Finance Commission recommended that municipalities be enabled to levy vacant land tax.
Indore Municipal Corporation has floated a public issue of rated, listed, taxable, secured, redeemable and non-convertible green municipal bonds.
10% of income-tax collected from the cities was to be given back to them as a direct revenue grant from the central government.

Lack of maintenance and audit of accounts at the local level leaves no verifiable financial data for municipalities leading to a denial of performance grants.
Both the 13th and the 14th Finance Commissions included better data availability as a conditionality for accessing performance grants. Pune Municipal Corporation is also the first City Administration In India To Launch Its Open Data Policy And Open Data Initiatives Like Sharing Real Time API.

Currently, the head of the municipal corporation, the mayor, is merely a ceremonial authority and executive decisions are carried out by the municipal commissioner appointed by the state government.
An elected mayor with substantial powers of his own not only provides a single point for negotiations with outside agencies and investors but also ensures greater coordination among the different city departments and promotes decisive decision making.
A popularly elected mayor with a fixed tenure also offers more stability in governance as the person is not dependent on the elected members of the council or on the local or state level political leadership for his survival in office

Challenges of Directly Elected Mayor

State governments do not wish to delegate more authority to city-level institutions. Often, urban resources are transferred to rural areas in the name of development.
Municipal commissioner also, sometimes, becomes a hurdle. Even if some powers are delegated to the municipality, the state governments have in place municipal commissioners to perform the executive functions, again cutting the role mayor.
If a directly elected mayor belongs to a party in minority in the municipality, it becomes difficult to get other municipality members on board in taking decisions. This was witnessed in Himachal Pradesh, which ultimately led to the scrapping of this system.

Cities should be asked to draw up their plans themselves based on priority seeking from city residents.
They must encourage democratic participation of people to become institutions of self-governance.