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Praja Foundation released the “Fiscal Empowerment of City Governments 2026” study astatine a nationalist consultation successful Mumbai. The survey analysed 398 fund documents from 2017-18 to 2025-26. It is the organisation’s 3rd specified study connected municipal finance.
A survey of 43 municipal corporations crossed 28 States and 2 Union Territories has recovered that cities successful India beryllium connected authorities grants for astir 60% of their income. Own root gross accounts for an mean of 34.95% of full municipal income, portion spot taxation contributes lone 14.46%, little than non-tax revenue’s stock of 17.16%.
The mean stock of taxation gross successful full municipal income for the 43 cities stood astatine 17.97%. Per capita own-source gross was ₹2,664.69. Only 14 of the 43 cities published each 9 fund documents connected their website oregon successful the nationalist domain for the play nether review.
Budget information arsenic per relationship heads was published by 25 cities, portion 14 cities issued fund information divided by section accounts. Twenty-five cities followed the format of accounting prescribed successful the National Municipal Accounting Manual (NMAM) 2004. The remaining 18 cities utilized their ain municipal code.
Twenty-three of the 43 cities bash not person an autarkic authorization to present caller taxes from the database assigned nether their respective State Municipal Acts. Nineteen cities deficiency autarkic authorization to o.k. their fund arsenic per the applicable Municipal Acts.
All 43 cities are permitted to get nether their State Acts. However, lone 20 of them borrowed funds betwixt 2016-17 and 2023-24. The mean borrowing stock of each cities but Mumbai during this play was 3% of full income, indicating a debased level of borrowing among municipal corporations.
Nitai Mehta, Founder and Managing Trustee of Praja Foundation, said decisions made astatine the metropolis level straight impact citizens, arsenic cities are closest to the people. He added that amended power implicit funds, divers methods to rise own-source revenue, third-party show audits, and work transportation based connected Service Level Benchmarks are attributes for effectual municipal governance.
Ravikant Joshi, an municipality concern specialist, noted that portion municipal ain root gross has kept gait with nominal GDP growth, cities stay babelike connected grants. He said operational surpluses are thin, superior expenditure relies mostly connected grants, and gross maturation is slowing successful mean and ample cities.
V.N. Alok, Professor of Public Finance astatine the Indian Institute of Public Administration, said stronger fiscal support, improved governance frameworks, and amended readying tin assistance heighten municipality infrastructure and work delivery.
Milind Mhaske, CEO of Praja Foundation, said municipality governance is simply a State taxable nether the Constitution, starring to variance successful however cities are empowered and managed. He said the authorization to present and revise taxation rates should remainder with metropolis governments for them to relation arsenic units of self-government.
The study is based connected information from 43 cities crossed 28 States and 2 Union Territories. A QR codification provided by Praja offers entree to the property release, lawsuit photos, and different documents.
