Nagaland stands to lose almost Rs 140 crore in grants from the Centre to modernize its decrepit urban infrastructure after the state government surrendered to tribal customs and failed to hold elections to urban local bodies (ULBs),This includes Rs 127 crore under the 14th Finance Commission (FFC) and another Rs 10 crore as incentive under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the union urban development ministry’s programme to upgrade urban amenities in 500 cities.The hilly north eastern state with a population of 19 lakh has been rocked by violence over the past week after the government decided to hold municipal elections with 33% seats reserved for women. Tribal organizations are up in arms saying reservation is against their customary laws.According to the FFC recommendation, which had been accepted by the government in 2015, the total grants to ULBs across India over a five year period (2015-2020) is to the tune of Rs 87, 143 crore. Nagaland’s share is Rs 127 crore that is to be used by the municipalities to augment basic services such as water supply, sanitation, solid waste management, maintenance of roads, etc.However, the recommendation, which was accepted by the government in 2015 mandates that the grants will be given to only those states, which have a “duly constituted ULBs.” The last time municipal elections were held in the state was 16 years ago.Besides Nagaland, Meghalaya and Jammu &Kashmir have also missed out the first instalment of funds because of their inability to constitute ULBs.“If Nagaland foregoes its share of the FFC grants, the planned development of fast growing urban centres such as Dimapur will suffer. Such cities are regional economic hubs but deficiencies in municipal infrastructure and services expose their citizens to a variety of risks,” said Jagan Shah, director, National Institute of Urban Affairs.Besides, the state will also miss out on 10% incentive from the Rs 108 crore allocated to it under AMRUT for not improving the levy and collection of user charges for basic services. Article 243 (T) of the Constitution that provides for reserving 33% seat for women in ULB’s also empowers them to collect tax. But tribal bodies have opposed this too.“AMRUT grants incentives to state, which carry out reforms like municipal tax and fee improvement,” said an official.Nagaland and Meghalaya have cited Article 371 (A) that gives them special status and exempts them from following central laws for not holding municipal polls.Shah says it’s a conundrum in all states that have protected areas. “It is natural that indigenous communities see urbanization as a threat to ancient customs. However, traditional practices are authentic to a specific geography, whereas civic laws and ethos are applicable in urban areas, where development of infra and delivery of basic services must be a priority,” he said.