New Delhi: The urban local bodies may soon get greater financial and administrative autonomy, with the Centre preparing a framework to reduce cities’ reliance on state and central grants and strengthen their own revenue capacities, according to reports.
The proposed blueprint, expected to feature in the upcoming Union Budget, aims to make municipalities more self-reliant in funding and managing urban services amid rapid population growth and mounting infrastructure stress.
Reports stated that the plan is likely to focus on reforms in property tax administration and the rationalisation of user charges, enabling cities to raise more resources internally. Municipal bodies may also be encouraged to tap market-based financing options such as municipal and green bonds to fund long-term infrastructure projects.
Several cities, including Surat, Indore, Ahmedabad and Pimpri-Chinchwad, have already accessed green bonds for urban development.
In addition, municipalities could be supported in expanding revenue streams through consultancy, advisory and implementation services, while peer-to-peer mentoring between stronger and weaker urban bodies may help replicate best practices in governance and finance.
The move comes against the backdrop of persistently weak municipal finances, with revenues and expenditure hovering around 1 per cent of GDP. The proposed measures seek to address structural constraints and improve cities’ capacity to fund essential services sustainably.
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