Press Release No: 2007-2008/928, dated 14.1.08: - The Reserve Bank of India (RBI) published a Study entitled "Municipal Finance in India - An Assessment". The Study was undertaken under aegis of the Development Research Group (DRG). The Study attempts to analyse the reasons for differential performance of Urban Local Bodies (ULBs) with respect to fiscal parameters and provision of civil amenities under the Constitution (74th Amendment) Act, 1992 .
The major findings of the Study are summarised below :-
• The Study highlights mismatch between functions and finances of ULBs, which primarily explains the vertical imbalance.
• It is highlighted by the study that Out of 18 functions to be performed by the municipal bodies in India, less than half have a corresponding financing source.
• According to the Study Own taxes and user charges of the ULBs in India are grossly inadequate to meet the expenditure needs of ULBs.
• The Study highlights that backlog, current and growth needs of infrastructure in cities and towns far exceed the resources at the disposal of the ULBs.
• It is highlighted by the study that a national consensus needs to evolve on a 'municipal finance schedule' for assignment to the ULBs to match the list of functions included in the 12th Schedule of the Constitution.
• It is emphasised by the study the function-finance mapping to ensure that each function to be performed by the ULBs is backed by a corresponding financing source.
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The major findings of the Study are summarised below :-
• The Study highlights mismatch between functions and finances of ULBs, which primarily explains the vertical imbalance.
• It is highlighted by the study that Out of 18 functions to be performed by the municipal bodies in India, less than half have a corresponding financing source.
• According to the Study Own taxes and user charges of the ULBs in India are grossly inadequate to meet the expenditure needs of ULBs.
• The Study highlights that backlog, current and growth needs of infrastructure in cities and towns far exceed the resources at the disposal of the ULBs.
• It is highlighted by the study that a national consensus needs to evolve on a 'municipal finance schedule' for assignment to the ULBs to match the list of functions included in the 12th Schedule of the Constitution.
• It is emphasised by the study the function-finance mapping to ensure that each function to be performed by the ULBs is backed by a corresponding financing source.
Manupatra Legal Database
Manupatra Round up
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