Approach Paper

( Draft )

Levying User Charges in Implementation of e-Governance in Urban Local Bodies

July 2009

Project Management Unit

(e- Governance)
Jawaharlal Nehru National Urban Renewal Mission
Ministry of Urban Development Government of India

Summary

Summary The e-Governance project in municipalities (Municipal Corporations & Municipalities) has been recently launched at national level under JNNURM e-Governance National Mission Mode Program (NMMP). As part of the NMMP, Municipalities that form a part of Mission Cities would focus on implementation of eGovernance to improve service-delivery and undertake process-related reforms. The scope of the program has been defined to cover a select set of services and functions. The e-Governance user charges have been implemented by select ULBs in India to recover the costs associated with delivery of services through e-Governance delivery channels. This approach paper examines the current situation in user charges in municipal & other sectors, and explores the various options that may be adopted by Urban Local Bodies (ULBs) for levying user charges in lieu of improved services that would be offered through an e-Governance system.

Key Words: e-Governance, User Charges, Municipal Services

Contents
Municipal Services & User Charges
Municipal Services : Functional Domain User Charges : Basic Services Principles of User Charges

e-Governance Services
Municipal Services : e-Governance Cost of Services : e-Governance e-Governance User Charges : Current Scenario Rationale for Levying User Charges

Levying User Charges for e-Governance

User Charges for e-Governance Issues & Limitations in Levying User Charges

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Comparison of PPP, ASP, SaS Models

Models for Delivering e-Governance in ULBs Best Fit Model for Delivery of e-Governance Services

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Legal Aspects to Levy User Charges Way Forward

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Municipal Services & User Charges

Background The Twelfth Schedule of the Constitution (Article 243W) provides an illustrative list of eighteen functions which fall under the purview of municipalities. Article 243W suggests that the Legislature of a State may, by law, endow the municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government. The Article goes on to suggest that such law may contain provision for the devolution of power and responsibilities upon municipalities subject to such conditions as may be specifiedwith respect to (i) the preparation of plans for economic development and social justice and (ii) the performance of functions and the implementation of schemes which may be entrusted to them, including those in relation to the matters listed in the Twelfth Schedule.

Municipal Services An analysis of the provisions of several municipal laws reveals that the following items as referred to in the Twelfth Schedule are covered in most of the Acts :

regulation of land use and construction of buildings (item 2 of the Twelfth Schedule); roads and bridges (item 4); water supply for domestic, industrial and commercial purposes (item 5); public health, sanitation, conservancy and solid waste management (item 6); fire services (item 7); provision of urban amenities and facilities such as parks, gardens and playgrounds (item 12); promotion of cultural, educational and aesthetic aspects (item 13); burials and burial grounds, cremation grounds and electric crematoriums (item 14); cattle pounds, prevention of cruelty to animals (item 15); vital statistics including registration of births and deaths (item 16); public amenities including street lighting, parking lots, bus stops and public conveniences (item 17); and regulation of slaughter houses (item 18).

However, urban planning including town planning (item 1), planning for economic and social development (item 3), urban forestry, protection of environment and promotion of ecological aspects (item 8), safeguarding the interests of weaker sections of society, including the handicapped and the mentally retarded (item 9), slum improvement and upgradation (item 10), urban poverty alleviation (item 11) and regulation of tanneries (item 18) are not covered under most of the Acts.

Within the framework of Twelfth Schedule, the municipalities provide multitude of services within its jurisdiction area. These services may be categorized as G2C Government to Citizen, G2B Government to Business, G2G Government to Government. The services may be further classified into services, activities, processes having internal and external interface. The internal interface services are those services which involves departmental interface within the municipalities and external interface services are those services which are citizen facing. Local governments depend upon four local sources and two external sources for their receipts. These are : (a) locally raised taxes , (b) user charges (c) other non-tax revenues from performance, primarily, of statutory and regulatory functions (d) incomes from commercial ventures and municipal properties (e) borrowings (f) transfers from higher levels of government including shared taxes, capital grants and grants-in-aid.

Concept of User Charges User charge is a fee applied to users, and is normally related to the cost of the goods and/or services provided by municipality. In most municipal laws in India, provisions exist for levying of rents/charges for use of any services like stalls, shops, slaughterhouse, burning ghat or crematorium. In Karnataka, provisions exist for charging fees for use of public halting places, cart stands, cattle sheds, public bath houses, etc. The Maharashtra, Karnataka and Andhra Pradesh Acts have enabled provision for levying of water charges and sewerage charges in lieu of water tax, sewerage tax and, in case of Bombay, water benefit tax and sewerage benefit tax. The Calcutta Municipal Corporation Act, 1980, while providing for levy of user charges for water supply, sewerage and drainage and disposal of solid wastes makes a distinction between charges levied for residential and non-residential purposes1.

Principles of User Charges Cost Recovery - Cost recovery is the main purpose of user charges. It requires that user charges recovered from consumers ,when aggregated, should produce revenue equal to the financial cost of the service. Moreover, the revenue stream should be relatively stable and should not cause cash flow or financing difficulties for the ULB. Economic Efficiency - Economic efficiency can be achieved by setting the amount of user charges equal to their relevant marginal costs. For example, in many cities the cost of bringing additional water is higher than the cost of supplying existing water, since the cheapest sources/options are developed first. Thus, when additional water is brought at higher cost, user charge rates should be adjusted to reflect this. Equity - Equity can be achieved when user charges treat similar customers equally, and that customers in different situations are not treated the same. This means that users pay monthly bills for services, which are proportional to the costs of providing the same by the ULB. Affordability - While the basic objective of user charges is to recover service costs, the charges levied, should be affordable to the users. This principle requires the ULB to choose appropriate service levels and help ensure service-efficiencies. Many a time, ULBs adapt lifeline tariffs for vulnerable customers, duly subsidizing the costs through cross subsidy mechanisms to address the issue of affordability. Resource conservation - User charges should serve the purpose of discouraging excessive or wasteful uses of public service, thus promoting the conservation of depleting resources. Acceptability - User charges have an inescapable political dimension. A successful user charge is one that is free from public criticism and not objectionable to political leaders. Simplicity, feasibility, and transparency - User charges should be simple and easy to comprehend for both users and ULB managers in order to avoid anomalies and disputes. Finally, there should be transparency in every aspect regarding the fixing, revision and implementation of user charges. Public disclosure is key for ensuring transparency; the users should be provided with complete information.

Model Municipal Law (MML), Ministry of Urban Development, GoI

Almost all the sectors like Municipal Governments, Roads & Highways, Airlines etc levy user charges for availing services by users. The primary objective of levying user charge is to recover the cost for providing services to the users. The example of water tariff from the select cities, as provided in the table shows that, both fixed flat tariffs and varying volumetric charges linked to the level of consumption are in practice. The user charges for other sectors like Airport & Toll Road / Expressway, the user charges levied are based on using the airport infrastructure & kilo metre (km) road length traveled by users.

Examples of User Charges ULBs : Water Supply (User Charges) 1 Bangalore Domestic : 0-8000 litres : INR 6/KL Coimbatore Domestic - INR 480 (INR 40/- Per month) Bulk-Domestic - INR 3600 (INR 300/- Per month) Jaipur Upto 15KL = INR 1.25 >15 up to 40 KL = INR 2.4 Greater Mumbai [Rate per 1000 litres] 1] Domestic a] Stand Post - INR 2.25 b] Housing Societies INR 3.50

8001-25000 litres : INR 9/ KL Non-Domestic:

> 40 KL = INR 3.2 Non Domestic - INR 2100 (INR 175/- Per month) Bulk-Non Domestic INR 5400 (INR 450/- " ) 2] Trade & Commerce

0-10000 litres: INR 36/KL 10001- 20000 litres: INR 39/KL

INR 10.50 to INR 18.00 3] Commercial & Industrial INR 25 INR 38

Other Sectors (June 2009) Airport User Charges from Passengers Bangalore International Airport Ltd. GMR Hyderabad International Airport Ltd. Toll Road / Expressway User Charges Gurgaon Jaipur Expressway Noida Toll Expressway Worli-Bandra Sea Link Expressway Domestic INR 260 INR 375 International INR 1070 INR 1000

INR 18 INR 20 INR 50

JNNURM Quarterly Progress Reports (QPRs), Ministry of Urban Development, GoI

e-Governance Services
Municipal Services : e-Governance Cost of Services : e-Governance e-Governance User Charges : Present Practices Rationale for Levying User Charges

Municipal Services: e-Governance Various Municipalities have successfully taken up e-Governance initiatives in India for improving service-delivery to citizens. Widely adopted services include: payment of property tax, water supply & utility bills, birth & death registration, building plan approval, issue of license, and complaint redressal system. The eGovernance service delivery differs across municipalities and involves a combination of service delivery channels including City Civic Centres (CCC) / Citizen Facilitation Centres (CFC), web enabled or stand-alone system / integrated service delivery system at municipal level. Some of the well-documented e-Governance initiatives at ULB-level include: Ahmedabad Municipal Corporation, Bangalore Municipal Corporation, Kalyan Dombivili Municipal Corporation, e-Seva initiative from Andhra Pradesh etc. Based on study of these initiatives it is observed 20-30 percent of the population, on average, avail the municipal services through e-Governance initiatives. The maximum transactions are attributed to services related to property tax, utility bills, birth & death registration, complaints. The property tax & utility bills account for 70 to 80 percent, birth & death registration, and complaints range from 5 to 7 percent of the total transactions 1.

Analysis of select ULBs across; DPRs on e-Governance from ULBs

Case Study 1: Case Study 2: Ahmedabad Municipal Corporation (AMC) 1 Kalyan Dombivili Municipal Corporation (KDMC) The Ahmedabad Municipal Corporation (AMC) initiated citizen services through its City Civic Centres (CCC). The service delivery channels provided services for: Professional Tax, Property Tax, Vehicle Tax, Building Plan, TDO Fees, Shops, Birth & Death Registration, Hawkers License, Hotels & Restaurants, RTI, and Marriage Registration. The total transactions observed for year 2007 & 2008 are : 700347, and 14,67,460 respectively. In year 2007, around 15 percent of the population had availed citizen services through CCC, which had improved to 32 percent in year 2008. The average transactions & revenue received through property tax services by City Civic Centres (CCC) attributed to highest percentage of around 80 percent for the two years, followed by birth & death registration system with around 8 percent.
Transactions
1400000 1200000 1000000 800000 600000 400000 200000 0 Property Tax Professional Tax Vehicle Tax 5.80% 7.29% 0.19% Building Plan 5.41% 0.25% 1.71% TDO Fees Birth / Death Registration Shops 78.98%

KDMC initiated the delivery of services through citizen centric delivery channels in the year 2002 through Citizen Facilitation Centres (CFC). The Citizen Facilitation Centres (CFC), provided services for : Assessment Related Services, Birth / Death Certificates, Food Licenses, Market Licenses, New Water Connections, Water Bill Payments, Property Tax Bill Payments, Complaints, Inward Letters, other services. The total average transactions observed per year was around 2,50,000, with around 21 percent of the population availing the services through Citizen Facilitation Centres (CFC).
Transactions
120000 42.51% 40.00% 100000 35.00% 80000 25.84% 25.00% 60000 20.00% 40000 6.15% 20000 1.16% 0.94% 0 Property Tax Bill Payments Water Bill Payments Birth / Death Certificates Assessment Related Services New Water Connections Complaints Accepted Food Licenses Market Licenses Inward Letters Accepted Other Services 0.22% 0.57% 6.35% 4.11% 5.00% 0.00% 12.13% 15.00% 10.00% 30.00%

%
45.00%

%
90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.03% 0.02% 0.33% 0.00% 0.00% Hotels/Restaurants RTI Hawker's License Marriage Registration

1
2

AMC website, details analyzed for years 2007 & 2008 KDMC DPR on e-Governance, KDMC website
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Cost of Services: e-Governance

Cost of Services : e-Governance The average investment cost for providing e-Governance services ranges from INR 110 per-citizen, percapita for million plus cities to INR 137 per-citizen, per- capita 1. However, based on certain assumptions related a adoption of a standard ICT model, the estimated per capita costs range from INR 96 for infrastructure catering to 2 million population, to INR 63 for upto 5 million population, and INR 48 for infrastructure catering to 10 million population 2. Around 20-30 percent of the total population avail of municipal services thorough e-Governance service delivery channels. The average per user cost increase two-three fold when compared to the average per capita cost, based on the services availed by the users. The capital costs consists of capital expenditure towards hardware & software infrastructure, and O&M costs would include yearly recurring costs towards operation & maintenance of the hardware & software, and service provisions.

Summary of Capital, O&M Costs and Cost Per Capita 2 Sr. No. Cost Components (Capital , O&M Costs) Infrastructure catering to 2 Million Population Per Capita Cost I II III IV V VI VII VIII Server & System Network & Security Desktop & Peripherals System Software MIS Components GIS Components Other Cost-Fixed O&M Costs (Recurring Costs) Infrastructure catering to 5 Million Population Per Capita Cost Infrastructure catering to 10 Million Population Per Capita Cost

INR 96

INR 63

INR 48

1 2

DPR on e-Governance (Mission Cities) Assumptions based on cost analysis for e-Governance implementation in cities ; estimated average cost of INR 19.10 crore for infrastructure catering to 2 million population; INR 31.2 crore for 5 million population, and INR.47.44 for 10 million population

e-Governance User Charges: Current Scenario

e-Governance User Charges : Current Scenario e-Governance services offered by ULBs, are being provided through various delivery channels including Citizen Facilitation Center (CFC) / Common Service Centre (CSC)/ City Civic Centres (CCC), internet, municipal offices through stand-alone or integrated systems. SomeULBs have initiated outsourcing of these delivery channels to provide services to citizens including payment of property taxes, utility bills, issues of birth / death certificates, citizen grievance system. User charges levied by ULBs for providing services through e-Governance delivery channels the ULBs range from INR 10 INR 35 1 . However, all services are not covered under these delivery channels, and hence user charges are levied only for select services. The charges collected is shared between the ULB and the private player providing & maintaining the services. In Andhra Pradesh and Chhattisgarh, the user charges are being levied by the Government across all the municipalities. In case of Andhra Pradesh the user charges are being collected for providing services including information, online form filling, form submission, and issuing of certificates 5. The Government of Chhattisgarh has worked out an appropriate amount which would be paid by the citizens in availing any services from the Notified Citizen Services from CHOICE Centre (Chhattisgarh Online Information System for Citizen Empowerment).

Sr. No . 1

2 3 4

Details of Select User Charges (INR) for provision of services through e-Delivery channels 1 Service Areas Ahmedabad Bangalore Navi Mumbai Andhra Municipal Municipal Municipal Pradesh 5 Corporation Corporation Corporation (AMC) 2 (BMC) 3 (NMMC) 4 Registration & Issue of 25 35 20 5- 15 Births / Deaths Certificate Payment of Property Tax Payment of Water Supply & other utilities Grievances & Suggestions

Chhattisgarh 6

15

15 15 15

1
2

DPR on e-Governance (Mission Cities); 3 4 AMC website ; BMC website ; NMMC DPR on e-Governance; 5 Govt. of Andhra Pradesh, Abstract, IT&C Department : e-Governance User Charges, 2003 6 Chhattisgarh Citizen Service (Electronic Governance), Rules, 2003

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Rationale for Levying User Charges

Rationale for Levying User Charges As per the JNNURM program, the mandatory reform to be undertaken at the local body / city level is the levy of reasonable user charges by ULBs and parastatals with the objective that the full cost of Operation and Maintenance (O&M) or recurring cost is collected within the next seven years. In other words, ULBs / parastatals managing the delivery of any service are required to revise/levy user charges to help ensure that by the year 2012, income from user charges of a particular service recovers the full cost of O&M of the service 1. While providing better & improved service delivery through e-Governance initiatives, the municipalities would incur cost in the provision of services to the citizens by various channels like Citizen Facilitation Centres/ City Civic Centres. As part of JNNURM NMMP on e-Governance, the projects would be implemented through Centre, State and Urban Local Bodies (ULBs) share for capital investment as well as O&M during the initial phase. However, in order to sustain the project, it is important for ULBs to devise a mechanism for ensuring long-term sustainability for service-delivery through the improved system. The rationale behind levying of user charges is to recover the project investment costs as well as provide financial sustainability for recurring costs including operation & maintenance costs. The minimum amount of user charges on a per-user basis would enable ULBs to adopt a suitable model for provision of improved municipal services. This would also provide an opportunity for exploring Public Private Partnership (PPP) options at the ULB level. It is envisaged that the new, improved system would bring benefits to citizens as well as ULBs. The benefits realized by ULBs would include : faster delivery of services to citizens, cost savings, revenue maximization, transparency, quality service levels, time savings. The citizens benefit from faster service delivery, better quality of services, increased transparency and easier access to service The question which need to be addressed is How much should an user pay for availing improved services through e-Governance service delivery channels ?

JNNURM Primer on User Charges

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Levying User Charges for e-Governance

Options for Levying User Charges Issues & Limitations in Levying User Charges
Approach for Levying User Charges Around two-thirds of the services covered under e-Governance initiative have citizen interface. Some of these services have potential for levying of user charges, based on transactions observed from various municipalities 1. Setting of user charges needs to balance the key principles & objectives of : cost recovery, economic efficiency, equity, affordability besides additional considerations like resource consumption, acceptability, simplicity, feasibility and transparency 2. Before setting of user charges, the municipalities should estimate the cost incurred in the provision of services through e-Governance delivery channels, capital & the associated O&M costs, assess the user groups, volumetric transactions, and citizens ability to pay for these services. While setting the user charges, issues including cross-subsidies and inflationary trends should be taken into account for ensuring that project costs are recovered over a period of time. However in the absence of measurement systems, a simple telescopic tariff system can be followed until the measurement systems are in place, and flat user charges may be levied across the services. Options for Levying User Charges An approach of simple telescopic tariff and flat system has been assumed for levying user charges to be set and recovered based on the following parameters 3 :

Option I: Capital Expenditure + O&M Expenditure Recovery Option II: Capital Expenditure Recovery Option III: O&M Expenditure Recovery Option IV: Central Share Recovery (50 percent for million plus cities; 35 percent for mega cities) Option V: State Share Recovery (20 percent for million plus cities; 15 percent for mega cities) Option VI: ULB Share Recovery (30 percent for million plus cities; 50 percent for mega cities) Option VII: Post Implementation Recurring Costs

1
2 3

DPR on e-Governance (Mission Cities) JNNURM Primer on User Charges Based on 20 percent of population as users availing e-Governance services
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The Central, State and ULB share varies for million plus and mega cities. The Central share is 35 percent for mega cities and 50 percent for million plus cities, the State share is 15 percent for mega cities and 20 percent for million plus cities, the ULB share is 30 percent for million plus cities and 50 percent for mega cities. The Central share ranges from 35 to 50 percent which is being provided to ULBs in form of a grant. Based on the detailed cost benefit analysis with varying population, per capita costs for the infrastructure catering upto 2 million, 5 million and upto 10 million population, has been worked out for setting appropriate user charges. The user charges to be set for cost-recovery has been worked out for full and partial cost recovery with given time frame of 3, 5 and 10 years. The following table provides a view of the user charges that could be set and recovered depending on the option adopted: Options for Levy of User Charges for Recovery Option - I Capital Expenditure + O&M Expenditure Recovery Option- II Capital Expenditure Recovery only Option- III O&M Expenditure only Population Coverage 2 million 5 million 10 million 2 million 5 million 10 million 2 million 5 million 10 million 2 million 5 million 10 million 2 million 5 million 10 million 2 million 5 million 10 million 2 million 5 million 10 million Per Capita Cost (INR) 96 63 47 71 47 36 24 16 12 48 22 17 19 9 7 29 31 24 24 16 12 User Charges for Cost Recovery (INR) 3 Years 26.55 17.39 13.18 19.80 12.96 9.87 6.75 4.43 3.31 13.27 6.08 4.61 5.31 2.61 1.98 7.96 8.69 6.59 6.75 4.43 3.31 5 Years 15.93 10.43 7.91 11.88 7.77 5.92 4.05 2.66 1.99 7.96 3.65 2.77 3.19 1.56 1.19 4.78 5.22 3.95 4.05 2.66 1.99 10 Years 7.96 5.22 3.95 5.94 3.89 2.96 2.02 1.33 0.99 3.98 1.83 1.38 1.59 0.78 0.59 2.39 2.61 1.98 2.02 1.33 0.99

Option -IV Central Share Recovery (50 percent) Central Share Recovery (35 percent) Option - V State Share Recovery (20 percent) State Share Recovery (15 percent) Option-VI ULB Share Recovery (30 percent) ULB Share Recovery (50 percent) Option- VII Post Implementation Recurring Costs

Since the ULBs would also be benefit from offering improved services through e-Governance, the entire burden of cost recovery should noy be on citizens alone. The option of partial recovery like recurring O&M for project sustainability option seems feasible. In case of partial recovery like O&M recovery by ULBs over a period of 3, 5 and 10 years time, the approximate user charges would range as follows:

INR 7 INR 2 (for 2 million population) INR 4 INR 1 (for 5 million population) INR 3 INR 1 (for 10 million population)

The above user charges provide a view for setting & recovering the project investment & recurring costs. For some of the services, PPP models are appropriate, where the services could be delivered through eGovernance delivery channels. The appropriate user charges could be set based on the actual project & recurring cost, cost of provision of e-Services, population growth rate, user base availing the services, inflation rates, and range of services offered to the citizens.

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The other dimension of setting user charges would be based on level of Public Private Partnership (PPP) arrangement in delivery of services. The user charges could be set based on the delivery model, and revenue sharing arrangement under PPP model. The other important parameters include : frequency of the services & sub services associated 1 additional services user & cumulative user base service levels neutralization of costs between ULBs & citizens

Issues & Limitations in Levying User Charges

Determination of appropriate user charges for services to be availed through delivery channels. Willingness of ULBs to adopt user charges for delivery of e-Governance services Willingness and ability of users to pay additional user charges for availing services through eGovernance delivery channels. Low volume of transactions of select services for adopting PPP models Enforcement & recovery measures for user charges.

Indicative sub- service details for revenue stream : Birth & Death Registration (Registration, Correction, NAC, Adoption, Issuance); Water Supply Billing & Accounting (Connection, Disconnection, Issuance, License, Change of Ownership); Grievance & Suggestions (Complaint, Status, Escalation) ; Town Planning (Approval, Completion Certificate, NOC); e-Procurement & Project Monitoring (Indents, Tenders, Auctions); Licenses ( Registration, Issuance, Cancellation, Duplicate Copy, Ownership, etc

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Comparison of PPP, ASP and SaS

Best Fit Model for Delivering e-Governance Services
Comparison of PPP, ASP and SaS Under the conventional approach of eGovernance implementation, project ownership lies with the public sector along with the responsibility of managing project risk and project funding. The adoption of new technology demand new types of implementation models in an integrated way. Some of the models for providing e-Governance services being increasingly evaluted out in different parts of the world include : PublicPrivate-Partnership (PPP), Software-As-AService (SAS) and Application Service Provider (ASP). Public Private Partnership (PPP) PPP is a different method of procuring public services and infrastructure by combining the best of the public and private sector with an emphasis on value for money and delivering quality public services. Governments need a large amount of funding and a variety of technological and managerial skills to execute their e-Governance projects and lack the resources necessary for successful implementation. Many System Integrators leverage resources and network of partnerships to work with government agencies and departments in a unique PPP model.

Application Service Provider (ASP) The ASP model is an example of PPP model wherein the partnership is quite tenuous. In this model, the government contracts to avail the services of the partner for delivery of services as per mutually agreed services levels and commercial terms. The revenue model is typically transaction based. The ASP model is a third party entity that manages and distributes software-based services and solutions to customers across a wide area network from a central data center. In this model, the public and private sectors work together to implement ASP models and built the networks and portals to provide egovernment services. The ASP model is suitable to eGovernance initiatives that involve:

a) Need to launch the services in a short time fame. b) The technology is not complex and is widely accepted and practiced in the private sector

c) The nature of information is not very sensitive or critical to governance.

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Software-as -a-Service (SAS) Software as a service (SAS) is a software application delivery model in which customers pay to access and use software functionality over a network through a hosted, web-native platform operated by the software vendor (either independently or through a third-party). SAS is uniquely positioned to integrate and augment evolving government and education enterprise architectures that support eGovernance and customer relationship management initiatives. States are rapidly developing e-Government enterprise architectures and will invest crores of Rupees over the next decade in order to automate government processes, put information and forms online, and modernize the delivery of services to citizens. Initial technology investments have enabled every state to deploy web sites and to conduct limited transactions online with constituents. Future e-government investments will allow states to move beyond simple web enablement. These investments will transform state governments by streamlining operations and providing superior customer service. To capture the benefits of these investments, states must bring sound business practices, like customer relationship management, to government operations.

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Best Fit Model for Delivering e-Governance Services

Best Fit Model for Delivering e-Governance Services The best fit model would be a model in which the maximum possible investments are secured from the private sector and the sustainability for long term is achieved by the involvement of a private sector for O&M. Through this model the financial standing of ULBs would improve and there would be lesser financial, technical and managerial burden on ULBs. The private sector may recover the costs associated with the investments and O&M, which could be shared between the private sector and the ULB. At the same time the risks associated with the project is being taken care by the private sector. Such an example in e-Governance is seen in Andhra Pradesh, where the eSeva centres are being run on BOOT model. Based on the comparative study, PPP can be a powerful instrument in the implementation of the egovernment if there is a : a) PPP policy laid down by the state b) shared vision between the government and the partners c) an appropriate financial models selected for governing the partnerships Public Private Partnership is an important element of the NMMP, the PPP models would primarily include options where the services can be managed on service contract / management contract or lease where the private / public entity is involved in asset ownership/ O&M / investment / and shares common risks. Depending on the stage of e-Governance, project viability and preparedness, the ULBs may work out the options for particular type of PPP model. The PPP model can be adopted for single service at municipal level or Citizen Facilitation Centres(CFC)/ City Civic Centres (CCC) where a range of services can be provided to citizens through these service delivery channels.

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Legal Aspects to Levy User Charges

Legal Aspects to Levy User Charges The provisions of article 243X of the 74th Constitution Amendment Act, 1992 states that the Legislature of a State may by law 1 : (a) authorize a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits; (b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits; and (c) provide for making such grants-in-aid to the Municipalities from the Consolidated Fund of the State, Under Article 246 of the Constitution entitled Subject matter of Laws made by Parliament and by Legislatures of States, clause (3) provides that The Legislature of any State has exclusive powers to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule referred to as the State List and concurrent powers with respect to any of the matters enumerated in List III of this Schedule. As per the Model Municipal Law (MML), clause 130, the Municipality shall levy user charges for : i) provision of water supply , drainage and sewerage ii) solid waste management iii) parking of different types of vehicles in different areas and for different periods iv) stacking of materials or rubbish on public streets for construction, alteration, repair or demolition work of any type and v) other specific services rendered in pursuance of the provisions of the Act. Hence, ULBs can recover the costs by levying appropriate user charges for provision of services to the citizens.

Model Municipal Law (MML), Ministry of Urban Development, GoI

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Way Forward

Way Forward

Ministry of Urban Development (MoUD) may consider these options and suggest the best option to be followed by ULBs. The user fees for urban governance under e-Governance have to be calculated and recovered accordingly. Necessary amendment in the rules for setting user charges regarding delivery of e-Governance services have to be made.

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