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As of April 28, Odisha has 118 cases of COVID-19. Of these, 37 have been cured, and 1 person has died. In this blog, we summarise some of the key decisions taken by the Government of Odisha until April 28 for containing the spread of COVID-19 in the state.
Before the lockdown
On March 24, the state government enforced state-wide lockdown. Before enforcing it, the state government took several measures for preventing the spread of COVID-19 besides declaring it as a State disaster on March 13. Some of the key measures are summarised below.
Health Measures
The Odisha COVID-19 Regulations, 2020: On March 18, the Government issued The Odisha COVID-19 Regulations, 2020. These regulations are valid for a year. As per these regulations, both government and private hospitals must have dedicated COVID-19 isolation facilities.
Foreign returnees: On March 16, the Government issued an order for foreign returnees to: (i) mandatorily register on COVID portal within 24 hours of their arrival (ii) home quarantine themselves for 14 days. An incentive of 15,000 rupees will be provided for registration and completing home quarantine.
Prisons: On March 17, the Government released precautionary measures to be taken in prisons by authorities and inmates. Newly admitted prisoners should be quarantined in different wards for a week. From March 18, e-Mulakat was allowed in District headquarters jails.
Private Health Care Facilities: On March 19, the Department of Health and Family Welfare issued guidelines for Private Health Care Facilities. The guidelines specify the hospitals to have a COVID-19 specific counter with separate entrance, regulating the entry of visitors, and infection control measures.
Media: On March 21, the Department of Health and Family Welfare issued guidelines to the media not to publish any information or interview the infected persons, their relatives, doctors and support medical staff of them.
Increasing the health workforce in the state: The Department of Health and Family Welfare issued an order on March 23 for the engagement of Staff Nurses and other Paramedics on a short term basis. The hired employees will be provided with additional incentives.
Administrative Measures
State crisis management committee: On March 4, a State crisis management committee was formed to take policy decisions regarding cluster containment.
Prohibiting strikes of employees: On March 21, the government issued an order prohibiting any strikes by employees engaged in the supply of drinking water and sanitation in urban local bodies. The order is valid for six months.
Public and private establishments: On March 21, the government requested all public and private establishments not to terminate the employees or reduce their wages.
Movement Restrictions
Closure of commercial establishments: On March 13, the Department of Health and Family Welfare ordered for the closure of cinema halls, swimming pools, gyms and educational institutions except for holding examinations until March 31.
Suspension of bus services: On March 23, the Department of Health and Family Welfare issued an order suspending intra-state bus services from March 24 and City bus services in all urban local bodies from midnight of March 23.
Lockdown in few districts: On March 21, the government announced lockdown in five revenue districts and eight towns of the state until March 29. The lockdown involved (i) suspension of public transport services (ii) closure of all commercial establishments, offices, and factories (iii) banning the congregation of more than seven people at any public place.
During the lockdown
With two cases in the state, on March 24, the government extended the lockdown to the entire state till March 29. Establishments engaged in the supply of essential goods and services were excluded from this lockdown.
This was followed by a nation-wide lockdown enforced by the central government between March 25 and April 14, now extended till May 3. Before the extension announced by the central government, the state government extended the lockdown in the state till April 30.
Starting from April 20, the central government allowed certain activities in less-affected districts of the country. Further, on April 24, the Ministry of Home Affairs allowed the opening of certain categories of shops with a limited workforce.
Welfare Measures
The Odisha government announced several welfare measures to address the difficulties being faced by people during the lockdown. Key measures include:
Temporary shelter for migrants: On March 28, the government ordered District collectors and Municipal Commissioners to use closed down schools and hostel buildings as temporary shelters for the migrants.
Provision of food in rural areas: On March 30, the government decided to provide hot cooked food for needy people in rural areas at affordable prices. Two meals per day will be provided at Rs 60 for adults and Rs 45 for children per day.
Compensation to family members: The Odisha government will be giving compensation of fifty lakh rupees to the family members of the employees who may die due to COVID-19 and are not covered under insurance scheme of the central government.
Administrative Measures
Ordinances: As the State Assembly is not in session, the government promulgated two ordinances.
The Epidemic Diseases (Amendment) Ordinance, 2020: On April 7, the government promulgated an ordinance to deal with COVID-19 spread. The Ordinance amends Section 2 and 3 of the Epidemic Diseases Act, 1897. The Act provides for the prevention of the spread of dangerous epidemic diseases. The ordinance amends the act to increase the penalty for individuals committing the offences under the act.
The Odisha Contingency Fund (Amendment) Ordinance, 2020: On April 9, the Odisha Government promulgated Odisha Contingency Fund (Amendment) Ordinance, 2020. The ordinance increases the corpus of the contingency fund from 400 crores to 2000 crores. The contingency fund is generally used for meeting any unforeseen expenditure.
Setting up control rooms: On March 26, the Home department set up a round the clock control room for monitoring the issues regarding the implementation of lockdown and stranded Odias in various parts of the country. On March 27 and 28, three control rooms were set up in Bhubaneswar and Delhi for the migrant labourers.
Deferment of salaries: The government announced 70% deferment of salaries of all the elected representatives of the state and 50% deferment for the employees of All India Services such as IAS and IPS.
Implementation of MGNREGS: On March 31, the Department of Panchayati Raj and Drinking Water issued an advisory for the implementation of MGNREGS. Key measures include: (i) Job cards will be provided to people interested in doing unskilled works, (ii) Individual works up to 5 persons is allowed (iii) Hand wash and safe drinking water should be provided at the worksites.
Essential Goods and Services
On March 25, the government authorised certain authorities to issue passes for the free movement of essential goods.
For facilitating the movement of goods, the government allowed the opening of roadside dhabas, and vehicle repair shops situated on Highways. These should be located outside of towns and cities.
Health Measures
Amendments to Odisha COVID-19 regulations, 2020
On April 3, the government added following provisions to the Odisha COVID-19 regulations, 2020: (i) additional duties and responsibilities of hospitals and local bodies such as infection control measures in hospitals among others. (ii) state government or empowered officers can declare any government or private hospital as COVID hospital.
On April 9, wearing masks were made compulsory for the people stepping out their houses and were included in the regulations.
On April 16, the government included the ‘prohibition of spitting in any form in public places’ into the regulations.
Short term engagements: On March 27, the government invited senior professionals having expertise in various sectors such as health care management, international logistics, and charities to work as Honorary Advisors to Government on a voluntary basis. The government issued an order for engagement of microbiologists on a short term basis.
Training of MBBS students- On March 28, the government decided to train the MBBS students of all medical colleges studying 7th, 8th and 9th semesters and deploy them if there is a rise in the number of cases in future. Training of government establishments was taken up in the first phase. Private colleges were also requested to train doctors and students simultaneously.
Additional resources: On April 6, the State Executive Department authorized the Principal Secretary, Department of Health to requisition the services of anybody having expertise in public health care management. When the need arises, the government can use the services of healthcare professionals such as doctors, nursing staff from government or private organisations to assist the state government.
Support to personnel fighting the Pandemic: On April 22, the government announced certain measures to support the personnel fighting COVID-19 in the state. They are
The Government will invoke the National Security Act, 1980 against the individuals causing violence to any member of the medical community such as doctors, nurses, and health workers.
While on duty, if any government employee dies due to COVID-19, the family will get the salary until the retirement date of the deceased employee.
The cremation of the individuals dying due to COVID-19 on duty will be honoured by the state as usually accorded to the martyrs.
Handling the return of migrants from other parts of the country: On April 19, the Revenue and Disaster Management department issued an advisory to Gram Panchayats and Urban Local Bodies for handling the influx of migrants from other parts of the country, once the lockdown is over. The advisory has the following steps.
(i) All local bodies should have registration facilities. People returning from other states should register through their relatives or family members.
(ii) All persons arriving from various states will be quarantined for 14 days.
(iii) An incentive of 2,000 rupees will be provided to the people for completing the quarantine period in the quarantine facilities.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
India’s urban population has grown by 32% from 2001 to 2011 as compared to 18% growth in total population of the country.[1] As per Census 2011, 31% of the country’s population (377 million people) live in cities, and contribute to 63% of the country’s GDP.[2] The urban population is projected to grow up to 600 million by 2031.2 With increasing urban population, the need for providing better infrastructure and services in cities is increasing.[3] The government has introduced several schemes to address different urban issues. These include the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart Cities Mission, Heritage City Development and Augmentation Yojana (HRIDAY), Pradhan Mantri Awas Yojana – Housing for All (Urban) (PMAY-U), and Swachh Bharat Mission (Urban).
Last week the Ministry of Urban Development released the next batch of winners under the Smart Cities Mission.[4] This takes the number of smart cities to 90. The government has also announced a few policies and released data indicators to help with the implementation of the urban schemes. In light of all this, we discuss how the new schemes are changing the mandate of urban development, the fiscal challenge of implementing such schemes, and the policies that are trying to address some of these challenges.
Urbanisation in India
The Jawaharlal Nehru National Urban Renewal Mission (JnNURM), launched in 2005, was one of the first urban development schemes implemented by the central government. Under JnNURM, the central government specified certain mandatory and optional reforms for cities, and provided assistance to the state governments and cities that were linked to the implementation of these reforms. JnNURM focused on improving urban infrastructure and service delivery, community participation, and accountability of city governments towards citizens.
In comparison, the new urban schemes move beyond the mandate that was set by JnNURM. While AMRUT captures most of the objectives under JnNURM, the other schemes seek to address issues around sanitation (through Swachh Bharat), affordable housing (through PMAY-U), and technology innovation (through Smart Cities). Further, the new schemes seek to decentralize the planning process to the city and state level, by giving them more decision making powers.2 So, while earlier, majority of the funding came from the central and state governments, now, a significant share of the funding needs to be raised by the cities themselves.
For example, under the Smart Cities Mission, the total cost of projects proposed by the 60 smart cities (winners from the earlier rounds) is Rs 1.3 lakh crore.[5] About 42% of this amount will come from central and state funding towards the Mission, and the rest will be raised by the cities.[6]
The new schemes suggest that cities may raise these funds through: (i) their own resources such as collection of user fees, land monetization, property taxes, etc., (ii) finance mechanisms such as municipal bonds, (iii) leveraging borrowings from financial institutions, and (iv) the private sector through Public Private Partnerships (PPPs).[7]
In 2011, an Expert Committee on Indian Urban Infrastructure and Services (HPEC) had projected that creation of the required urban infrastructure would translate into an investment of Rs 97,500 crore to Rs 1,95,000 crore annually.[8] The current urban schemes are investing around Rs 32,500 crore annually.
Financial capacity of cities
Currently, the different sources of revenue that municipal corporations have access to include: (i) tax revenue (property tax, tax on electricity, toll tax, entertainment tax), (ii) non-tax revenue (user charges, building permission fees, sale and hire charges), (iii) grants-in-aid (from state and central governments), and (iv) debt (loans borrowed from financial institutions and banks, and municipal bonds).
While cities are now required to raise more financing for urban projects, they do not have the required fiscal and technical capacity.8,[9] The HPEC had observed that cities in India are among the weakest in the world, both in terms of capacity to raise resources and financial autonomy. Even though cities have been getting higher allocations from the centre and states, their own tax bases are narrow.8 Further, several taxes that cities can levy are still mandated by the state government. Because of their poor governance and financial situation, cities also find it difficult to access external financing.8,7
In order to help cities improve their finances, the government has introduced a few policies, and released a few indicators. Some of these are discussed below:
Policy proposals and data indicators
Value Capture Financing (VCF): The VCF policy framework was introduced by the Ministry of Urban Development in February 2017.[10] VCF is a principle that states that people benefiting from public investments in infrastructure should pay for it. Currently when governments invest in roads, airports and industries in an area, private property owners in that area benefit from it. However, governments recover only a limited value from such investments, constraining their ability to make further public investments elsewhere. VCF helps in capturing a part of the increment in the value of land due to such investments, and use it to fund new infrastructure projects.
The different instruments of VCF include: land value tax, fee for changing land use, betterment levy, development charges, transfer of development rights, and land pooling systems.10 For example, Karnataka uses certain value capture methods to fund its mass transit projects. The Mumbai Metropolitan Region Development Authority (MMRDA), and City and Industrial Development Corporation Limited (CIDCO) have used betterment levy (tax levied on land that has gained in value because of public infrastructure investments) to finance infrastructure projects.
Municipal bonds: Municipal bonds are bonds issued by urban local bodies (municipal corporations or entities owned by municipal bodies) to raise money for financing specific projects such as infrastructure projects. The Securities and Exchange Board of India regulations (2015) regarding municipal bonds provide that, to issue such bonds, municipalities must: (i) not have negative net worth in any of the three preceding financial years, and (ii) not have defaulted in any loan repayments in the last one year.[11] Therefore, a city’s performance in the bond market depends on its fiscal performance. One of the ways to determine a city’s financial health is through credit ratings.
Credit rating of cities: In September 2016, the Ministry of Urban Development started assigning cities with credit ratings.[12] These credit ratings were assigned based on assets and liabilities of the cities, revenue streams, resources available for capital investments, accounting practices, and other governance practices.
Of the total 20 ratings ranging from AAA to D, BBB– is the ‘Investment Grade’ rating and cities rated below BBB– need to undertake necessary interventions to improve their ratings for obtaining positive response to the Municipal Bonds to be issued. By March 2017, 94 cities were assigned credit ratings, 55 of which got ‘investment grade’ ratings.[13]
Credit ratings indicate what projects might be more lucrative for investments. This, in turn, helps investors decide where to invest and determine the terms of such investments (based on the expected returns).
Earlier this month, the Pune Municipal Corporation raised Rs 200 crore through the sale of municipal bonds, to finance water supply projects under the Smart Cities Mission.[14] The city had received an AA+ credit rating (second highest rating) in the recent credit rankings assigned by the central government.
Other than credit ratings, the Ministry of Urban Development has also come up with other data indicators around cities such as the Swachh Bharat rankings, and the City Liveability Index (measuring mobility, access to healthcare and education, employment opportunities, etc). These rankings seek to foster a sense of competition across cities, and also help them map their performances year on year.
Some financing mechanisms, such as municipal bonds, have been around in India for the last two decades, but cities haven’t been able to make much use of them. It remains to be seen whether the introduction of indicators such as credit ratings helps the municipal bond market take off. While these mechanisms may improve the finances of cities, the question is would more funding solve the cities’ problems. Or would it require municipal government to take a different approach to problem solving.
[1] Census of India, 2011.
[2] Mission Statement and Guidelines, Smart Cities, Ministry of Urban Development, June 2015, http://smartcities.gov.in/writereaddata/SmartCityGuidelines.pdf.
[3] Report on Indian Urban Infrastructure and Services, March, 2011, The High Powered Expert Committee for estimating the investment requirements for urban infrastructure services, http://icrier.org/pdf/FinalReport-hpec.pdf.
[4] “30 more smart cities announced; takes the total to 90 so far”, Press Information Bureau, Ministry of Urban Development, June 23, 2017.
[5] Smart Cities Mission, Ministry of Urban Development, last accessed on June 30, 2017, http://smartcities.gov.in/content/.
[6] Smart City Plans, Last accessed in June 2017.
[7] “Financing of Smart Cities”, Smart Cities Mission, Ministry of Urban Development, http://smartcities.gov.in/upload/uploadfiles/files/Financing%20of%20Smart%20Cities.pdf.
[8] “Report on Indian Urban Infrastructure and Services”, March, 2011, The High Powered Expert Committee for estimating the investment requirements for urban infrastructure services, http://icrier.org/pdf/FinalReport-hpec.pdf.
[9] Fourteenth Finance Commission, Ministry of Finance, February 2015, http://finmin.nic.in/14fincomm/14fcrengVol1.pdf.
[10] Value Capture Finance Policy Framework, Ministry of Urban Development, February 2017, http://smartcities.gov.in/upload/5901982d9e461VCFPolicyFrameworkFINAL.pdf.
[11] Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015, Securities and Exchange Board of India, July 15, 2015, http://www.sebi.gov.in/sebi_data/attachdocs/1436964571729.pdf.
[12] “Credit rating of cities under urban reforms begins”, Press Information Bureau, Ministry of Urban Development, September 6, 2016.
[13] “Credit Rating of Urban Local Bodies gain Momentum”, Press Information Bureau, Ministry of Urban Development, March 26, 2017.
[14] “Pune civic body raises Rs200 crore via municipal bonds”, LiveMint, June 19, 2017, http://www.livemint.com/Money/JOOzaSTKnC6k1EZGeFh8LJ/Pune-civic-body-raises-Rs200-crore-via-municipal-bonds.html.
