Abstract

The Constitution (Seventy-fourth) Amendment Act 1992 sought to empower urban local bodies as a third-tier of governance. Thirty years hence, the reality of Indian ULBs is far from their initial aspirations. ULBs in most states continue to struggle on almost all dimensions of the funds, functions, and functionaries continuum. Most have limited autonomy of functioning and capacities for planning, budgeting, expenditure management, procurement, implementation, and monitoring. The fiscal space for ULBs has been shrinking in most states, especially with constraints in expansion of the overall tax base, the growing central and state fiscal deficit, and the weakening of the vertical and horizontal institutional mechanisms for resource mobilisation, coordination, and transfer.

The present exercise is an attempt to analyse the broad trends in recent municipal finance in India. Panel data of 80 ULBs spanning 5 years between 2012-13 to 2016- 17 has been collated, and relevant indicators from revenue and expenditure heads are presented and analysed in this report.

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