Local Government Finance in India: Trends and Patterns of Select Municipal Corporations

Abstract

Local government finances have been assuming greater importance in India, particularly after the decentralization movement started with the 73rd and 74th constitutional amendments in 1992. The structure and trend of the finances of urban local governments is widely varied, yet, it is not so well-documented. This paper is an attempt to provide an outline of urban public finances of select cities in India. It presents the structure of the aggregates of municipal finances of these select cities and the trends over a period of time, so as to give an overview of how well they are placed and how good their movements are. It discusses both revenue and expenditure accounts as well as the capital and current account balances of the urban local governments. Local government finances of cities—both on the revenue and expenditure side—present a weak base and loose foundations compared to those of other countries, and therefore, point to the need for bringing about reforms in that direction among these institutions.