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| Management of Social Transformations - MOST
Discussion Paper No. 57 |
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Industrial growth in small and medium towns and their vertical
integration:
the case of Gobindgarh, Punjab, India
by
Amitabh Kundu and Sutinder Bhatia
- Chapter 5 -
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5. Provision of Basic Amenities, Infrastructure and Municipal Governance at Gobindgarh Levels and Quality of Select Amenities The coverage of households through basic amenities and their quality seem to be better in Gobindgarh than in other urban centres in the district or state. The relatively higher percentage of households having electricity, toilet and water taps bears testimony to this fact (Table 5.1). Similarly, the percentage of households residing in rented premises – often taken as an indicator of formal and better quality housing – is about 10 percentage points higher than that of urban Patiala and urban Punjab. Understandably, this can be attributed to the strong economic base of the town and the higher level of municipal expenditure on basic amenities.
Table 5.1: Select Amenities in Gobindgarh, Patiala and Punjab, 1991
Water Supply The town depends on underground water extracted through eleven tube wells operated by the MC. The total water availability is 4,500 thousand gallons per day. Water is supplied 20 hours and per capita supply works out as 80 gallons per day. The total number of domestic connections is 6,918 of which only 1,489 are metered. Three quarters of the households in Gobindgarh enjoy the tap water facility. Most of the industries have their own water supply system through tube wells, reducing the pressure on the local body. Sewerage The sewerage system in the town covers 90 percent of the area and population. The total length of the sewerage line is about 79 km. Only a small portion of the town including a couple of slum colonies and the area beyond the railway line are not covered through the system. The number of sewerage connections is 6,649. At present, there is no proposal to extend the system, as the MC believes that it is covering almost the entire city. There is no sewer treatment plant as yet. The sewage is released untreated into an open "nallah", which at times is used for irrigation. Discharge systems for industrial effluents and storm water are also connected with the sewerage lines. The drainage system has a length of 50 km and is fully covered. It serves the entire town. Electricity The Punjab State Electricity Board provides electricity to the town covering residential, commercial and industrial units. About 96 percent of the households have a power connection. In recent years, the Government throughout the State has enforced power cuts due to shortage in supply. The lighting of the streets and other public places within the municipal limits is the responsibility of the local body. The State Electricity Board, however, is responsible for the maintenance. All the streets, bazaars, parks and roads including the GT road are well lit. The total number of street light connections in early 2,000 was 2909. Of these, 400 are tube lights while others are sodium sets of different watts. There is a proposal by the MC to put all the wires and cables of electricity underground. Roads Gobindgarh is well connected by roads to the neighbouring towns and cities namely, Fatehgarh Saheb, Rajpura, Chandigarh, Sirhund, Ambala, Amloh, Khanna, Morinda etc. The GT road passes through the centre of the town as well as a broad guage railway line. Land and Housing In Gobindgarh, no major housing project has been taken up so far by the private or public sector. No state level agency has launched a project for developing and disposing residential plots in the town or neighbouring areas. This can possibly be attributed to the lack of demand for housing as the town has a large number of migrant populations, for whom housing is a low priority. Many among them reside in neigbouring villages and commute everyday. The people at high-income level viz. Industrialists, traders etc., on the other hand, have been residing in the town for a long time and have their own houses. Education The educational facilities available in Gobindgarh seem to be below the required levels (Table 5.2). There are eight primary schools, three middle schools, four secondary schools and three senior secondary schools as per the Census data of 1991. There are three "balwadi" schools run by the Municipal Council with a capacity of 150 children each. It is disheartening to note that the number of middle, secondary as well as senior secondary schools per 10,000 people reduced over the decade 1979-89. The number of schools, thus, has not kept pace with the fast growing population in the town, possibly due to the migrant workers not putting up a demand for educational facilities. Besides these, there is an Arts and Science college and a separate Girls’ College in the town, which provides education up to graduation level. To cater to the needs of technical manpower requirements of Steel re-rolling mills, the National Institute of Secondary Steel Technology (NISST) was established in 1990. It provides education and training to the secondary steel producers and assists them in technological innovations. There is also a college offering management courses to young trainees from within and outside the state. It is developing courses keeping in view the specific requirements of the industries in the region and has facilities for training people on the job. However, people prefer to go to the nearby towns of Khanna and Sirhind for higher education. Medical Facilities The health facilities available to the residents of the town are inadequate. Besides the ESI hospital for the industrial workers and their families, there is one government hospital, which can provide treatment to fifty indoor patients. The number of beds has remained the same over the past decade and a half (Table 5.3) despite the town experiencing a significant growth in population. The lack of proper health facilities is reflected by the fact that the number of beds per 1,000 people is lower than in urban Patiala. Three dispensaries and a large number of private doctors and nursing homes have, to some extent, compensated for the inadequacy of the hospital facilities. Table 5.2: Number of Schools per 10,000 Population
Table 5.3: Number of Beds per 1,000 Population
Other Facilities/Services The local body has developed seven parks in different wards and there is a proposal to develop nine more. The local body also maintains a fire-brigade facility with a jeep and two medium sized fire tenders, supported by adequate field staff. There are three community centres, one indoor and one outdoor stadium with the capacity of 300 and 5,000 seats respectively. There is one cinema hall, three clubs, one vegetable market and one meat market in the town. Inadequacy of hotels & restaurant facilities, particularly for the better-off sections of the population, is evident from the pressure on the existing facilities. City Planning and Location of Industries There has been no serious effort to plan the growth and structure of the town by the state government or the local body. A Master Plan for the town was prepared for the period 1983-2003 to guide the developmental activities and land use pattern but it has been used more for violation than in compliance. As a consequence, the town gives an impression of chaotic growth with congested lanes and roads and encroachments everywhere. Mixed land use has become a norm rather than an exception. There is no segregation between industrial and residential areas, which results in serious problems of air and noise pollution for the residents. There are no proper parking places for personal and commercial vehicles despite about 5,000 trucks entering the town every day. A project for creating a large parking lot has been stalled due to the intervention by the Court. Consequently, trucks and lorries – bringing in and taking out various industrial products – stay parked haphazardly on the roads, affecting the movement of traffic, sometimes even on the GT road. Recently, the Punjab Urban Development Authority (PUDA) has identified a zone within the municipal limits as a focal point for industrial development and provided certain infrastructural facilities to the potential industrialists in the ancillary sector. Unfortunately, however, although 75 percent of the plots in this zone have been leased out, not many units have come up so far, due to the present industrial climate. The venture of PUDA has, thus, turned out to be a loss-making proposition. The state government has taken steps to identify and relocate industrial units, away from residential areas, following the orders of the High Court. Forty units in the residential areas have been identified for closure or relocation. But unfortunately, not more than 5 or 6 units have actually been closed down. The mill owners have shown reluctance to shift to the focal point provided by the government or the periphery of the town. The closure of the handful of units, mentioned above, has also been attributed to the industrialist using industrial plot for commercial and residential purposes and benefiting from the high land values. Municipal Earnings and Expenditure The financial health of Gobindgarh MC is considered to be very strong compared to all other towns in the state. Its per capita municipal income and expenditure is the highest among the towns not only in Punjab but in the whole country. In fact, Gobindgarh M.C. has extended loan assistance to other Municipal Councils as well as Improvement Trusts in the State through the Directorate of Local Bodies. The per capita receipt of this town in the late 1980s was Rs. 680 which is about three times the figure for Patiala Urban as well as all the MCs in Punjab (Table 5.4). The growth rate in per capita revenue in the town during the 1980s works out as the highest in the state. Despite deceleration in demographic and economic growth, Gobindgarh MC has improved its financial position in relation to other towns in the state. Its per capita expenditure was just twice as high as other urban local bodies in Punjab in the late 1970s but in the late 1980s it was more than three times.
Table 5.4: Total Receipts and Expenditures in Per Capita Terms for Gobindgarh MC, MCs of Patiala District and MCs of Punjab at Current Prices
Source: Town Directory & District Census Handbook of Patiala, 1991 and 1981 An analysis of the receipts and expenditures at constant prices in Gobindgarh over the last one and a half decade reveals a downward trend from the mid 1980s to the late 1980s but an upward swing from the early 1990s (Table 5.5). The total receipts came down from 21.93 million in 1985-86 to 19.79 million in 1989-90. The socio-political unrest in the state could be responsible for this, adversely affecting the level of industrial activities and bringing down the revenue earnings of the local body. The economy seems to have registered some recovery from 1991-92 onwards and it generated a revenue of Rs. 47.68 million in 1995-96 which again slid down to 39.21 million in 1997-98. It started picking up again from 1998-99, reaching 52.47 million in 2000-2001. In other words, the total income at constant prices increased two and a half times over the period under consideration. The per capita income at constant prices also followed this trend. It went down from Rs. 699 in the mid 1980s to Rs. 535 in 1989-90 but improved subsequently to Rs.1007 in the mid 1990s which again came down to Rs. 904 in 2000-2001 (Table 5.5). The MC at Gobindgarh relies mostly on tax revenue for resources. A small contribution comes from non-tax revenue and other sources (Table 5.6). The transfer from the state government is also very small. Of the total tax revenue generated, octroi has the largest share (Table 5.7). This evidently is due to the concentration of steel re-rolling mills and their input-output linkages with units outside the town resulting in sale and purchase of intermediate products. It must be argued that the municipal council has adopted an easy way out for mobilising resources through octroi rather than relying on other sources. According to the estimated figures for the year 2000-2001, the octroi collected in Gobindgarh is Rs.122 million, contributing as much as 67.0 percent in the total revenue. The figure has come up to this level from a low base of about Rs.33.2 million in 1991-92. The system of collecting octroi has undergone a change. This was leased out to private parties for a fixed amount per annum. This has stopped large-scale evasion by the traders and increased the revenue of the MC. As far as its percentage share is concerned, the figure, however, has gone down significantly from 86.0 to 67.0 during this period. This implies that the growth in octroi earning has been less than that from other sources. The income from excise duty has increased more than five times, from 1.82 million in 1991-92 to 10 million during 2000-2001. Its percentage share in the total income has, however, remained almost the same. The income from house tax, on the other hand, has gone up almost thirteen times from 0.90 million in 1991-92 to 13.2 million in 2000-2001. This is due to the large increase in revenue coming from house tax in recent years. The earnings from this source had been more or less constant in financial terms until 1995. It was in 1996 that a policy decision was taken to revise the rates for property tax by moving away from rent based valuation to market based valuation. The latter is based on a few measurable indicators, commonly used in property valuation. The house tax for most of the residential, commercial and industrial premises has, as a consequence, increased by about 10 times or more. Ever since, the collections from house taxes have increased year after year as the MC is able to bring in more properties under the new system of taxation. Further, the new policy makes it possible to revise the rate of house tax every five years. It is, however, doubtful that the MC will exercise this option in the immediate future. The recent increase in house tax does not appear to be a burden on the rolling mills as this constitutes a small fraction of the total taxes. Discussions with many of the mill owners revealed that they do not think it would affect their cost of production or profitability in any significant manner. Even the owners of residential units and commercial undertakings are unlikely to feel the pinch as the property values have increased significantly in recent years.
Table 5.5: Income and Expenditure Trends for Gobindgarh MC
There have been increases in the user charges levied by the MC but these are not very high and in fact have not kept pace with inflation. The total amount collected from the provision of civic amenities such as water supply and sewerage has, however, gone up considerably during the period 1991-2001. The collection from water supply has increased from 0.14 million to 3.06 million and that from sewerage facilities has increased significantly from 0.07 million to 1.26 million (Table 5.7). Discussions with Municipal officials as well as select industrialists reveal that the increasing trend of earnings from house tax, and user charges from the water supply and sewerage facility can partially be attributed to the local administration adopting stricter measures of collection. The substantial increase in the total revenue has come from the non-traditional heads, many of which are shown under "other sources". It is the earning from ‘other sources’, which has put Gobindgarh MC at the top of others in the state and enabled it to carry out certain developmental activities for the residents. Its percentage share has gone up from 4.40 in 1991-92 to 16.66 in 2000-2001 (Table 5.7). A detailed analysis of the earnings from these heads has been attempted in Table 6.8. The most significant component here is the ‘power cess’, which accounts for over 80 percent of the total earnings. It was introduced during 1994-95 and its share in total earnings has increased constantly ever since. The second important source is ‘building plan fee’. This is the amount charged by the MC for clearing ‘building plans’ for constructing houses or commercial-industrial units within the municipal limits. This has been multiplied by about 100 in recent years. The ‘Bus stand fee’ and ‘road cutting charges’ have also increased by more than 25 times (Table 5.8). The share of these sources in the total ‘other sources’ is, however, very small to make any significant impact on the over-all revenue receipt of the Council. The pattern of per capita expenditure is similar to that of earnings as the local bodies are under the obligation of balancing their budgets. The per capita expenditure for Gobindgarh in the late 1980s works out as Rs.680, which compares very favourably with that of urban Patiala viz. Rs. 241 and urban Punjab viz. 270 per year. For all the MCs in the state, the average per capita expenditure is still less, about Rs. 210. It may further be noted that although the per capita expenditure here is very high, the per capita expenditure on administration is the same as that of urban Punjab. This reflects efficiency of administration, allowing the MC to spend a large amount on infrastructure and basic services, which works out as high as 70 percent of the total budget. Importantly, the town spends as much as six times on municipal services in per capita terms as compared to the average urban centres in Punjab. It may, thus, be argued that the MC at Gobindgarh has provided a medium to high level of amenities to its residents and entrepreneurs, as compared to other similar towns in the state. This is evidently due to high earnings and expenditures on civic facilities, as discussed above. The major problem of the town, however, is its unplanned growth and absence of a perspective plan for development. One would argue that the local administration should play a more active role by designing and implementing a development plan and carrying out infrastructural projects within the framework of the plan. Mobilising resources for this purpose is definitely not a big problem for the MC as it has substantial economic base to generate tax and non-tax revenue. The residents are also willing to pay the enhanced taxes provided there is corresponding improvement in the quality of the civic amenities.
Table 5.6: Income and Expenditure Trends by Major Components for Gobindgarh MC (in Rupees Millions)
Table 5.7: Disaggregated Income by Major Heads for Gobindgarh MC (in Rupees Millions)
Figures in parentheses are percentage figures * budgeted figures ** estimated figures
Table 5.8: Disaggregated Income from Other Sources for Gobindgarh MC (in Rupees Millions)
@ budgeted figures * estimated figures © UNESCO 2001 The opinions expressed in this publication are those of the author and do not necessarily reflect the views of UNESCO. |
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