The health of municipal finances is a critical element of municipal governance which will determine whether India realises her economic and developmental promise. The 74th Constitution Amendment Act was passed in 1992 mandating the setting up and devolution of powers to urban local bodies (ULBs) as the lowest unit of governance in cities and towns. Constitutional provisions were made for ULBs’ fiscal empowerment. However, three decades since, growing fiscal deficits, constraints in tax base expansion, and weakening of institutional mechanisms that enable resource mobilisation remain challenges. Revenue losses after implementation of the Goods and Services Tax (GST) and the pandemic have exacerbated the situation. (Read More)
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