Municipal Finance in India

CRDF successfully conducted the first roundtable discussion under the Habitat Futures impact series on Municipal Finance in India.

BACKGROUND 

India is amidst a massive urban transformation that has brought increasing focus on cities and their effective governance. Cities are gaining attention as more productive and attractive places to work and live, drawing more people from villages to cities which is likely to put additional pressure on urban infrastructure and services. A new World Bank report estimates that India will need to invest $840 billion over the next 15 years—or an average of $55 billion per annum—into urban infrastructure to meet the needs of its fast-growing urban population effectively. City governments must rapidly invest in infrastructure to provide a more sustainable future for their cities and citizens; they need access to adequate revenue sources to finance the public services they are mandated to provide. While a significant percentage of cities' revenue comes through state grants, many local governments are finding innovative ways to finance urban improvement and improve systems to strengthen their revenue base.

The round table explored multiple aspects of Municipal Finance, from preparing budgets, strengthening financial systems, and alternative financing to increasing the credit worthiness of cities. It commenced with a presentation by Ahmedabad Municipal Corporation on the City's budget for 2023-24 and the sharing of analysis and insights on the budget by expert panellists, followed by questions and discussions by an invited audience of academics, subject experts, and students from CEPT University, CRDF, and other institutions. The dialogue then broadened to discuss the importance of Municipal Finance, the current state of municipal finance in the country, the challenges Municipal Corporations face in securing funding, and leading practices for improving the efficiency and effectiveness of municipal finance. The panellists and experts delved into the role of the central and state governments in fiscal decentralisation and strengthening Municipal Finance and the role of private sector players and civil society in promoting good governance and accountability.

The discussion was relevant for students, policymakers, urban planners, financial experts, and citizens interested in the future of cities in India. Through a lively exchange of ideas and perspectives, the panel offered insights and recommendations for improving the financing and management of urban areas in India and ensuring that cities were equipped to meet the needs of citizens now and in the future.

KEY TAKEAWAYS AND WAY FORWARD