Sustainability challenges of city corporations

Photo: bdnews24.com

Public at large have expressed satisfaction on the election of four city corporations of Khulna, Rajshahi, Sylhet and Barisal held on 15 June, 2013 since they could cast their votes freely in a democratic environment. Bangladesh Awami League-backed four mayoral candidates were defeated with big margin. Equally, the councillors of opposition-backed alliance candidates won about 75 seats out of 116 positions. This has generated a hot political debate across the country.

A spokesperson of the party-in-power observed that the city polls proved an evidence of free and fair national election that could be held under the ‘partisan’ government and thus the demand for caretaker government sustains no longer. On the other hand, the opposition claimed that the landsides victory of opposition-backed candidates justified people’s demand for the caretaker government. Besides, they claimed the defeat of Awami League supported candidates as a verdict against the government’s misdeeds, unjust, repression and corruption through this poll. Some are in view to consider this election result as an outcome of a referendum in miniature.

Mayors, councillors and councillors of reserved seats, who gained voter’s confidence to come out as winners surely convinced their electorates with pledges to bring substantial changes in providing services to the city dwellers and make their lives more comfortable in coming days with significant improvement making the city clean and green. They have possibly assured the voters about the sustainability of city corporations financially and administratively with total eradication of corruption and any type of discrimination on their drive to ensure development.

Sustainability is the capacity to endure. It remains a challenge for all urban local bodies in particular due to multi-dimensional requirements to provide services to the city dwellers. Sustainability requires the reconciliation of environmental, social and economic demands. Sustainable development is the development that meets the needs of the present compromising the ability of future generations to meet their demands that apply for city corporations perfectly. The Schedule Third of the Rule 41 of the Local Government (City Corporation) Act  2009 has entrusted the city corporation with about 125  types of duties under 28 major heads like public health, death and birth registration, water supply, slaughterhouses, dead bodies disposal, construction of public thoroughfare, public safety, park and recreation, education and culture, social welfare, etc.

On the other hand, only 26 types of resource bases are earmarked for collecting revenues like holdings taxes, rates and fees, conservancy rate, rent and fees from market, lease money, etc. People living at slums (nearly 33% in DCC ) are outside the tax network since city corporations consider them as unauthorised occupants. Lack of transparency in assessment, weak collection efficiency, low level of service cost recovery and unstable grants from government are major impediments towards sustainability of city corporations. A city corporation can hardly mobilise their resources up to 50% to 60% from holding taxes and other fees as their source of own revenue. Low level of service cost recovery became major hurdles to meet the needs of primary health care, conservancy, sewerage, food safety, street lighting, etc.

Dhaka City Corporation recovered service cost only Tk.140 million from primary solid waste collection charges as against their spending of Tk 600 millions in a year. In the year 2001, Dhaka City Corporation collected holding tax from 1,80,000 households as against 11.00 lakhs households assessed for taxes.

A city corporation is a statutory urban local body with perpetual succession and it can acquire property moveable and immoveable, retain, transfer and proceed legally. There is little symptom that a city corporation can decide its modus operandi independently. Unfortunately, these urban local bodies are dependent on central government for financial support and administrative sanctions on many issues including the approval of their organogram, etc. City corporations and municipalities cannot revise their rates, taxes, fees or even small charges without the clearance from the relevant ministry or division.

An urban local body can be superseded in case a mayor or councillors fail to behave properly as per expectation of the central government. It is virtually difficult for an urban local body to emerge sustainable in the absence of significant delegation of authority and independence of decision-making authority.

There are at present 11 city corporations and 318 municipalities in the country. Most of them are not economically self-reliant but dependent on the grants and block allocations from the central government. Due to resource constraints as well as lack of transparency and accountability to the taxpayers, the efforts to attain sustainability appear to be invisible. Inadequately trained manpower, weak monitoring of the central government made the situation worse. To gain popularity, even by breaking law, the councillors remain reluctant to support the raising of taxes or impose new taxes. Thus, the revenue base suffers from stagnancy to keep pace with the needs of increasing urban population.

There should be major reformation in the municipal finance system. A Double Entry Accrual Accounting system should be introduced in all city corporations supported with computerisation in the assessment of taxes and payment procedure. The culture of tax exemption on review by the mayor should be discontinued and performance based targeted grants mechanism to be made effective in place of block allocation in practice at present. There should be a grievance redress committee and a coordination committee represented by stakeholders to overview performance as a step of voice and accountability.

The urban population growth in Bangladesh is around 5% as against the national growth rate of 1.37% creating massive demand for investment in urban areas in near future. At present, around 28% of the population are living in urban areas that might reach to 50:50 by 2040 AD. Dhaka City (North and South) might be the 4th largest densely populated city in the world by 2025 as per estimate of the UN Population Division. Thus, the challenges are enormous to address properly in coming days.

The inadequate presence of central government with more investment and reformatory measures during last few years was also a major factor for the debacle of the party in power in the election of the four city corporations. Besides, the bifurcation of Dhaka City Corporation has generated resentment since this step encouraged mismanagement.

In order to overcome the challenges of city corporations, the central government must invest remarkably in terms of infrastructure development and financial reformations to make city corporations sustainable to address challenges of urbanisation in Bangladesh.

Source: Bd news24

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