Finance Commission Grants to Cities – The issue of limited allocation

Why in News?

Recently there has been an issue of less grants to urban local bodies (ULB’s) by the Finance commission.

What is the issue?

• Importance of urban centers – In India they have become the principal engines of economic growth and capital accumulation.
• Nearly 90% of total government revenue and around 67% of India’s GDP are generated in cities.
• Issues – Despite this centrality to the economy, fiscal transfers to Urban Local Bodies (ULBs) remain modest.
• Recommendation 0f 16^th FC – The recommendations of the Sixteenth Finance Commission continue the trend of limited devolution to cities while emphasising greater mobilisation of own source revenues (OSR) by urban local governments.
• This raises questions about fiscal autonomy, adequacy of funding, and federal balance in India’s urban governance framework.

What is the status of Fiscal Transfers to Urban Local Bodies?

• Economic contribution VS allocation – The scale of fiscal transfers to cities remains extremely small when compared with the economic contribution of urban areas.
• Under the Fifteenth Finance Commission, urban local bodies received approximately Rs.1.2–1.3 lakh crore over five years.
• During the same period, India’s GDP ranged between Rs.200–210 lakh crore, meaning that transfers to cities amounted to only about 0.12–0.13% of GDP.
• The 16th Finance Commission has proposed around Rs.3.56 lakh crore for urban local bodies between 2026 and 2031, which translates to roughly Rs.75,000 crore annually.
• However, with India’s GDP projected to reach Rs.400 lakh crore, the proportion allocated to cities remains almost unchanged at around 0.13% of GDP?
• Thus, despite rising urbanisation and expanding infrastructure needs, the fiscal commitment to cities has not significantly increased.

What are the challenges around the allocation to urban centers?

• Growing Urban Population and Per Capita Constraints – Another dimension of the problem lies in the rapid growth of India’s urban population.
• Estimates suggest that the urban population will reach about 41% by 2031.
• India already had around 470 million urban residents in 2020, and the number may exceed 600 million during the 2026–2030 Finance Commission cycle.
• When the limited pool of grants is distributed across this expanding population base, per capita transfers stagnate or decline in real terms.
• This creates a widening gap between the growing demand for urban infrastructure—such as housing, mobility, sanitation, and climate resilience—and the fiscal resources available to city governments.
• Utilisation of Funds – Apart from the limited volume of grants, utilisation of funds has also been a challenge.
• Under the 15th Finance Commission, total grants to local bodies were around Rs.4.36 lakh crore, yet Rs.90,000–95,000 crore remained unspent or pending utilisation, including roughly Rs.30,000–35,000 crore meant for urban local bodies.
• Several factors contribute to this issue:
  • Limited administrative and technical capacity of local bodies
  • Delays in release of funds by State governments
  • Procedural and compliance requirements attached to grants
• These challenges highlight the need for institutional strengthening of urban local governments, rather than merely increasing conditional funding.
• The Problem of Tied Grants – A significant portion of Finance Commission transfers to cities is provided as tied grants, which are earmarked for specific sectors such as water supply, sanitation, and wastewater management.
• While these sectors are critical, tied grants restrict the fiscal autonomy of cities, as funds must be spent only on designated purposes.
• The approach of the 16th Finance Commission further strengthens this conditionality through performance-based grants.
• Cities must meet criteria such as:
  • Improving fiscal discipline
  • Conducting regular local body elections
  • Publishing provisional and audited accounts
  • Ensuring the constitution of State Finance Commissions
• Additionally, 20% of the funds are linked to additional conditions, including the requirement that cities raise at least Rs.1,200 per household through property taxes and user charges.
• While improving own-source revenue is desirable, strict conditionalities may disadvantage cities with weaker economic bases or administrative capacities.
• Federal Concerns in Urban Governance – Certain recommendations of the 16th Finance Commission have also raised federal concerns.
  • For instance, Rs.10,000 crore has been earmarked as a one-time incentive for the merger of peri-urban villages with populations exceeding one lakh into urban areas.
• This raises two key issues:
  • Encroachment on State Jurisdiction – Urban development is constitutionally a State subject, and financial incentives from the Union government to influence administrative restructuring may disturb the federal balance.
  • Administrative Complications – In States where rural local governance is strong—such as Kerala—forced mergers of rural areas into urban jurisdictions could create governance and service delivery challenges.
• Furthermore, the Finance Commission has paid relatively little attention to climate change, which poses significant risks for cities through flooding, heat waves, and infrastructure stress.
• The Issue of Cess Revenues – Another major concern relates to the growing share of cess and surcharge revenues collected by the Union government, which remain outside the divisible pool of taxes shared with States.
• These cess collections now amount to roughly 2.2% of GDP, or about Rs.8.8 lakh crore.
• A substantial portion of this revenue originates from economic activities concentrated in cities.
• However, since these funds are excluded from the divisible pool, States and urban local bodies do not receive a proportional share, limiting the fiscal space available for urban development.

What measures can be taken?

• Key reforms – Strengthening urban governance in India requires a more balanced and empowering fiscal framework.
• It could include:
  • Enhancing unconditional transfers to urban local bodies to increase fiscal autonomy.
  • Strengthening property tax systems and user charge mechanisms while providing capacity-building support to cities.
  • Ensuring timely constitution and functioning of State Finance Commissions for better vertical and horizontal fiscal distribution.
  • Integrating climate resilience into urban financing frameworks.
  • Revisiting the treatment of cess revenues to ensure more equitable sharing with States and local bodies.

What lies ahead?

• India’s cities are central to its economic future, yet their fiscal empowerment remains limited.
• While the 16th Finance Commission emphasises fiscal discipline and revenue mobilisation by urban local bodies, the scale and flexibility of grants remain insufficient.
• A sustainable urban future requires greater fiscal decentralisation, stronger institutional capacity, and respect for federal principles, allowing cities to plan and finance their own development while the Union government acts as an enabling partner.

Reference

The Hindu| Limited Finance Commssion Grants to Cities

State of the Environment in India, 2026 report

Why in News?

The ‘State of India’s Environment 2026’ report was released recently.

What about the State of the Environment in India report?

• Released by – The Centre for Science and Environment (CSE), a Delhi-based non-profit engaged in research and advocacy, has consistently brought out annual reports since 1982.
• Purpose – It gives a bird’s-eye view of the environmental challenges the country faces, ranging from floods, extreme weather events, changes in tiger behaviour, to air pollution, among others.
• It also gives a global perspective of climate change and connects it to the Indian context.

What about the increasing of extreme weather events?

• 2025 saw record-breaking extremes – The year 2025 witnessed the highest increase in frequency and impact of extreme weather events in India, including heatwaves, cold waves, and heavy rain, flood, in the last four years.
• Casualties & Agricultural impact
  • 2025 - Extreme weather events happened on 99% of days in 2025, resulting 4,419 reported deaths and affecting at least 17. 41 million hectares of crop area.
  • 2024 - Marks a sharp rise from 2024, when extreme weather events occurred on 88% of days, causing 3393 deaths and impacting 3.61 million ha of crop area.
  • 2023 - About 89% of days experienced such events, with 3208 deaths and 2.09 million ha of crop damage.
• Worst-hit states – Himachal Pradesh was the worst hit by extreme weather events (267 days), followed by Kerala (173 days), and Madhya Pradesh (162 days).
• Ecological Warning – The trends signal a widening ecological backlash and underscore the urgency of meaningful climate action.
• Future Risks – Without decisive efforts to cut risks and emissions, the disasters we face today risk becoming the norm tomorrow.
• Development & Climate  – Climate change should not stop development. Instead, it must push us toward smarter, resilient, fairer and equitable choices.

• Warming climate effect – The report warns that a warming climate will substantially increase the possibility of widespread floods by altering rainfall patterns and intensifying storms.

Are tigers’ behaviour changing?

• Increasing Human-Tiger Conflict – In Jan–Jun 2025, at least 43 people were killed near tiger reserves & in some cases, tigers consumed parts of their prey.
• In 2024, in the same period, 44 people were killed by tiger attacks.
• Reasons attacks are increasing – Tigers rarely turn into compulsive human-eaters, but tiger attacks and consumption of humans increase when 
  • The wild cats grow old or suffer from injuries and are unable to hunt for food, or when their natural prey base disappears.
  • Tigers seem to be increasingly targeting humans is due to proximity of humans to tiger territory.
  • About 40% of tiger territory overlaps with 60 million people across 20 states.
  • The overcrowding, habitat loss and human activities near tiger habitats are the reasons behind behavioural changes in tigers.

Are we measuring air pollution properly?

• Current Monitoring Coverage – Only 15% of India’s population – about 200 million people – live within 10 km of a continuous air quality monitor.
• The remaining 85%, more than 1.2 billion people, breathe outside any measurable range.
• Where Monitoring Exists – Air quality monitoring remains concentrated in a limited set of large cities, primarily state capitals and metropolitan regions.
• Entire districts, industrial belts and fast-growing peri-urban belts remain outside the monitoring grid.
• The result is a fragmented picture - a few zones with dense, overlapping data coverage and vast regions that appear blank.

What are the key policy recommendations to improve the environment?

• Shift in approach needed – India should move from post-disaster relief work to pre-disaster resilience.
• Integration of climate science – Climate change is not a distant possibility; it is already shaping our rivers, our cities, and our lives.
• Future resilience will depend on how quickly we can integrate climate science into everyday planning - from how we design culverts to how we allocate land along rivers.
• Nature-based solutions – The report emphasizes the need for nature-based solutions such as restoring wetlands, reconnecting rivers to their floodplains, groundwater recharge, rainwater harvesting, and restoration and construction of lakes.
• Structural Inequality – The absence of monitoring is not just a gap in information, but it is an example of structural inequality in India’s environmental governance.
• Smaller towns and industrial regions, which often face equal or worse pollution levels, lack real-time data entirely.

Reference

The Hindu | What is the state of the environment in India?

ASMITA Initiative

Why in News?

Recently, the Prime Minister shared an article highlighting the success of the ASMITA initiative.

• ASMITA – Stands for Achieving Sports Milestone by Inspiring Women Through Action.
  • Earlier known as the Khelo India Women’s League.
• Aim – To promote nationwide women’s participation in sports through leagues and competitions.
• Part of the Khelo India Mission’s gender-neutral mission.
• Launched in – 2021, Rebranded into ASMITA IN 2023.
• Nodal Ministry – Ministry of Youth Affairs and Sports (MYAS) under the Khelo India initiative.
• Implementation – Sports Authority of India.
• Key Features – Focus on athletics events such as 100 m, 200 m and 400 m races.
• Category – Competitions conducted in 3 age categories –
  • Under-13
  • 13–18 years
  • 18+ years
• Progress – Since launch, more than 2,600 leagues have been conducted.
• Covers around 3o sports disciplines.
• Organized across 550 districts and 700 cities in India.
• ASMITA athletics league, 2026 – It was organised nationwide on the occasion of International Women's Day 2026.
• About 2 lakh women participated in events organised at 250 locations across India.
• Significance – Promotes women’s participation in sports and Nari Shakti and Viksit Bharat @ 2047.
• Strengthens inclusive sports development under the Khelo India framework.  

References

1. PIB | ASMITA Initiative
2. News on Air | ASMITA Initiative

Solomon Islands

Why in News?

Recently, a 6.7-Magnitude earthquake hits Solomon Islands' Kirakira.

• Solomon Islands is an independent nation in the South Pacific, part of Oceania.
• Capital - Honiara on Guadalcanal, situated along the Mataniko River.
• Independence- Gained from the United Kingdom in 1978.
• Climate - Tropical, with mountainous, heavily forested terrain.
• Highest Point - The highest point is Mount Popomanaseu on Guadalcanal, reaching 2,332 meters.
• It is an archipelago of nearly 1,000 volcanic islands and coral atolls located east of Papua New Guinea and northwest of Vanuatu.
• Atolls and Lagoons - The country is home to the Marovo Lagoon in New Georgia, one of the world's largest saltwater lagoons, and Ontong Java, one of the largest atolls on Earth.
• Archipelago- Comprises 992 islands, including 6 large volcanic islands (Guadalcanal, Choiseul, New Georgia, Santa Isabel, Malaita, and Makira).
• The Coral Triangle - The western islands sit within the Coral Triangle, the global center of marine biodiversity.
• Tectonic Activity - The geography is defined by its position on the boundary of the Pacific and Australian tectonic plates.
• Lifestyle - Largely rural (90% outside urban areas) with a subsistence economy.
• Currency - Solomon Islands dollar (SBD).
• Economy - Often called the "land of gold," with active Chinese-funded gold prospecting.
• Renowned sites - Renowned for diving, WWII sites, and diverse culture (93% Melanesian).
• Geopolitics - As of early 2026, the nation is in a state of "economic and strategic turmoil" with increased security concerns, including a controversial, recently established temporary police post funded by a Chinese community organization.

Reference

Live Mint | Solomon Islands

New Damselflies from Arunachal Pradesh & Nagaland

Why in News?

Recently, a Mumbai-based doctor and wildlife researchers discovered 7 new species with the findings published in the journal Zootaxa.

• Damselflies are an Odonate species within the suborder Zygoptera.

Dragonflies and damselflies constitute the insect order Odonata, and are collectively known as odonates. These predatory, amphibious insects are known for their aquatic larvae and terrestrial, winged adult stages.

• Scientific Names
  • Calicnemia ardena (Fiery Oread)
  • Calicnemia Arunachala (Broad-striped Oread)
  • Calicnemia flavovittata (Yellow-striped Oread)
  • Calicnemia mimumkoa (Epsilon Oread)
  • Calicnemia naga (Tiger Oread)
  • Calicnemia rubromacula (Red-spotted Oread)
  • Coeliccia magna (Greater Sylvan)
• Genus –
  • Calicnemia
  • Coeliccia
• Discovery – With these discoveries, India now hosts 14 species of the genus Calicnemia, making it a global hotspot for the genus.
• Habitat – Freshwater habitats, forest streams, and hill habitats.
• Distribution – Mainly discovered in the Upper Siang district, Arunachal Pradesh and Some records from Nagaland
• Key Characteristics – Usually slenderer, with eyes separated and wings folded together along the body at rest.
• Key Identification
  • Fiery Oread has orange spots on its head.
  • Broad-striped Oread has broad stripes on the thorax.
  • Yellow-striped Oread for its yellow stripes on the thorax.
  • Epsilon Oread for ‘e’-shaped genitalia
  • Tiger Oread for its yellow and black bands on its face.
  • Red-spotted Oread has a red spot on its abdomen.
  • Coeliccia magna is the largest size in Indian Sylvans.
• Variation – Scientists identified the species by studying the shape of a special male reproductive part called the genital ligula, which helps distinguish different damselfly species.
• Unique split filaments – Two species (C. ardena and C. rubromacula) have short, split reproductive filaments, which led researchers to create a new group called the “ardena group.”
• Diet – Feed on insects like mosquitoes, flies, midges, moths, and butterflies, often catching them mid-air.
• Threat – Damselflies' life cycle depends on clean water habitats.
• Ecological Significance – Odonate species are known as ecological bioindicators of healthy, clean wetlands.  
• Highlights the rich biodiversity of Northeast India
• Odonates helps to control populations of other insects, including mosquitoes.

References

1. Midday | New Damselfly Species Discovered in Arunachal Pradesh
2. EastMojo | New Damselfly Species Discovered

Age-based Social Media Restrictions for Children

Why in News?

Recently, states such as Karnataka and Andhra Pradesh have been considering bans on social media use by children, amid growing global efforts to regulate minors’ online access.

Key Developments in India

• Karnataka Proposal – Ban on social media use for children below 16 years announced in the State Budget.
• Andhra Pradesh Proposal – Plan to introduce regulations within 90 days restricting social media use for children below 13 years.
• Central Government Approach – Government prefers graded restrictions rather than a total ban.
• A separate law for regulating social media access for minors may be introduced in Parliament.
• Age-Based Framework – Centre is considering 3 age categories for differentiated restrictions.
  • 8–12 years – Strictest controls and limited access.
  • 12–16 years – Controlled and monitored access.
  • 16–18 years – Relatively flexible access with safeguards.

• Jurisdiction – Regulation of the internet and digital intermediaries’ exclusive domain of the Union Government.

Entry 31 in the Union List (List I) of the 7th Schedule gives Parliament exclusive legislative power over telecommunications and internet regulation.

• India’s digital ecosystem is governed mainly through –
  • Information Technology Act, 2000
  • Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021
• Therefore, state-level bans may face jurisdictional and enforcement challenges due to overlap with central legislation.

• Measures – The possible regulatory measures include –
• Time-based access restrictions (e.g., limiting night-time log-ins).
• Daily usage limits for children.
• Mandatory parental consent for account creation.
• Age-verification mechanisms on platforms.

The Economic Survey 2025–26 recommended age-based limits on children’s social media use and digital ads, along with promoting basic phones or education-only tablets with usage limits and content filters to reduce exposure to harmful material.

Global Developments

• Australia – First country to enforce a minimum age of 16 for social media accounts, requiring platforms to deactivate underage accounts.
• Indonesia – Announced plans to ban high-risk social media platforms for users below 16 years.
• France – Proposed banning social networks for children under 15 years in France.
• Some countries impose strict time limits on children’s online gaming, such as in China.

References

1. IE | Age-based Social Media Restrictions for Children
2. IE | Graded age-based restrictions on social media for children