ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Soumyadip ChattopadhyaySubscribe to Soumyadip Chattopadhyay

Strengthening Fiscal Health of Urban Local Bodies

In West Bengal, municipal fiscal indicators have improved, but municipality finances are in a grossly unsatisfactory state. Inter-category fiscal disparities are large. Own source revenue is insufficient to cover revenue expenditure. Therefore, municipalities are dependent on intergovernmental transfers, and their fiscal autonomy is limited. Intergovernmental transfers are equalising in nature. There is an increasing need for adequate resources, especially owing to the decentralisation of urban service delivery, and a need for strengthening the fiscal health of urban local bodies by increasing own source revenue or intergovernmental transfers, by restructuring intergovernmental transfers, or by performing both actions.

Municipal Bond Market for Financing Urban Infrastructure

The steady pace of urbanisation coupled with the adoption of economic reforms has been creating serious problems for the provision and financing of urban infrastructure. The resource crunch at each level of government in general, and at the local level in particular, has instigated the need for innovative financing mechanisms. Municipal bonds provide an excellent route to tap the capital market for long-term financing of urban infrastructure. Against this background, the paper delineates the problems and prospects related to the municipal bond market along with recent initiatives to propel the development of a viable and vibrant municipal bond system in India.
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