Sarat Chandra IAS Academy

Sarat Chandra IAS Academy UPSC Civils Daily Mains Question 17th July -2021

Strategies in tackling the COVID-19 crisis must include local governments being equipped and fiscally empowered. Elaborate

The pandemic has put enormous pressure on local governments to respond and minimize the effects it may have on citizens. Apart from the regular responsibilities, municipalities had to intensify their work in assisting the most vulnerable citizens and engage in direct communication to prevent the pandemic from spreading.On the one hand, municipalities had to react quickly in disinfecting and cleaning the streets and residential apartments. On the other hand, they had to also keep up with other areas of the municipal mandates, such as waste collection and other services.

Concerns in local financing

  • There is no clarity in the assignment of functions, functionaries and financial responsibilities to local governments
  • In States such as Uttar Pradesh, Bihar and Jharkhand, local tax collection at the panchayat level is next to nil.
  • Inadequate grants from the finance commission.
  • Un skilled staff to effectively collect the taxes levied
  • Corruption by the legislative authorities result in the decline of transparency in distributing funds to various projects.
  • Building health infrastructure and disease control strategies at the local level find no mention in the five tranches of the packages announced by the Union Finance Minister.

Steps to fiscally empower local bodies

  • Financial devolution should be transparent as it increases accountability to people so performance can be realized as direct contact with people.
  • Issues like lack of expertise to plan development priorities and use resources optimally have to be solved with proper mechanisms.
  • In the context of the crisis under way, all grants must be untied for freely evolving proper COVID-19 containment strategies locally.
  • Creating a separate tax domain for local governments, by amending the Constitution, is not practicable. However, States should ensure that the law gives sufficient powers to the local bodies regarding taxes that are more appropriately collected at local levels.
  • Introduction of the new simplified and transparent system of taxation would definitely improve the collection efficiency.

As covid-19 has shown us the critical need for the equipment and empowerment of the local governments, the process to strengthen local bodies should come to reality.

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