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Municipal fiscal reforms crucial for addressing urban governance challenges

Decentralising local governance is crucial to empowering municipal bodies with greater administrative autonomy and financial independence

The limit of loans under the Pradhan Mantri Mudra Yojana (PMMY) was doubled to Rs 20 lakh recently, inserting a new category—Tarun Plus. Launched 10 years ago, the scheme intended to provide microfinance to small entrepreneurs. However, the number of
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Amit Kapoor Mumbai
Over 50 per cent of municipal corporations generate less than half their revenue independently, while government transfers rose by over 20 per cent in 2022–23, according to the Reserve Bank of India’s (RBI’s) recent report on municipal finances.
 
Decentralising local governance is crucial to empowering municipal bodies with greater administrative autonomy and financial independence. Strengthening municipal revenue streams is not merely a financial necessity but a fundamental requirement for effective urban governance. Municipalities can develop more responsive and sustainable urban management strategies by diversifying income sources and enhancing fiscal capabilities.
 
Effective municipal finance management involves a dual approach that necessitates
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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