Despite several measures taken by successive finance commissions, municipal finance in India has not yielded the expected results. In this context, discuss in what ways the 15th finance commission can promote municipal finance in India. (200 words)
Refer – Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 6 years
KEY POINTS
· Successive FCs has recommended a quantum jump in the allocation to supplement the resources of urban local bodies (ULBs) in line with their constitutional mandate. (Article 280).
· Successive FCs has also suggested part of grants for systemic reforms at ULBs.
· Yet these measures have not yielded expected results.
Issues with the existing model
· SFCs failed to provide requisite data on local finances and services to respective FCs.
· Similarly, the data used for benchmarking of services is not updated to current norms and coverage of services.
· Man-made disaster (urban flooding, building collapse, pollution-PM 2.5 and 10, and waste-related epidemic) is directly linked with the functional domain of ULBs.
· Yet ULBs are not included in the FC allocation, institutional arrangements (national, state, district disaster management authorities) and funds.
· Nearly half of the 8,000 urban centres (census towns) are not covered under FC allocation as ULB due to go-slow approach of states to create city governments.
Agenda for 15th FC
· FC allocation should be based on strategic fiscal gap at ULB level across the size class of cities/regions based on reliable data.
· Small and medium towns deserve specific attention to promote regional balance and productivity both within the metro region and hinterland.
· The current approach of unconditional and performance grant needs to be restructured to have regional balance and systemic reforms to enable ULBs to improve services and raise additional funds.
· It should include creation of ULB among census towns, too.
· ULBs should be covered under FC allocation for disaster management.
· The FC should create urban data bank (e- or m-governance) at the national level to release data on municipal finance and services periodically.
SATHESH KUMAR R 6 years
Please Review
Thank You
IAS Parliament 6 years
Try writing issues with the current allocation procedures of FC and how to deal with such issues. Keep writing.
Shankaranand 6 years
Please Review
Thank You
IAS Parliament 6 years
Issues with the current allocation procedures of FC and how 15th FC can overcome such issues need to be discussed. Keep writing.
