Goa becomes 6th State to complete Urban Local Bodies reforms, allowed additional borrowing of Rs 223 crore

New Delhi, February 13, 2021

Goa has become the 6th State in the country to successfully undertake Urban Local Bodies (ULB) reforms stipulated by the Department of Expenditure, thus becoming eligible to mobilise additional financial resources of Rs 223 crore through Open Market Borrowings.

Goa has joined five other States -- Andhra Pradesh, Madhya Pradesh, Manipur, Rajasthan and Telangana -- which have completed ULB reforms. On completion of this set of reforms, these five states have been granted total additional borrowing permission of Rs 10,435 crore.

Reforms in ULBs and the urban utilities reforms are aimed at financial strengthening of ULBs in the States and to enable them to provide better public health and sanitation services to citizens. Economically rejuvenated ULBs will also be able to create good civic infrastructure, an official press release said.

The set of reforms stipulated by the Department of Expenditure to achieve these objectives specify that the state will notify floor rates of property tax in ULBs in consonance with the prevailing circle rates (guideline rates for property transactions).

It will also notify floor rates of user charges in respect of the provision of water supply, drainage and sewerage which reflect current costs/past inflation.

The state will put in place a system of periodic increase in floor rates of property tax/ user charges in line with price increases.

Given the resource requirements to meet multiple challenges posed by the COVID-19 pandemic, the Union Government had on May 17, 2020, enhanced the borrowing limit of the States by 2% of their GSDP. Half of this special dispensation, that is, 1% of GSDP was linked to undertaking citizen-centric reforms by the states. The four areas for reforms identified by the Department of Expenditure were the implementation of One Nation One Ration Card System, Ease of doing business reform, Urban Local body/ utility reforms and Power Sector reforms.

Till now, 17 states have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions. Out of these, 13 states have implemented the one nation one ration card system, 12 states have completed ease of doing business reforms, 6 states, the local body reforms and 2 states had undertaken power sector reforms.

Total reform linked additional borrowing permission issued so far to the states stands at Rs 76,512 crore, the release added.

NNN