A new sunrise for cities? Budget to push for financial autonomy

With India’s urban hubs struggling with creaking infrastructure and weak service delivery for bulging populations, the central government is drawing up a blueprint to give municipal administrators greater autonomy over finances and service delivery, while reducing reliance on state and central grants.The blueprint—expected to be unveiled at the upcoming Union budget—will focus on strengthening urban local bodies’ (ULBs’) own-revenue sources such as property tax and user charges, two government officials directly involved in the process said, requesting anonymity.It will also encourage ULBs—including municipal corporations, municipalities and nagar panchayats—to tap market-based instruments including municipal and green bonds to fund long-term urban investment.

For instance, cities such as Surat, Ghaziabad, Indore, Vadodara, Ahmedabad and Pimpri-Chinchwad have already issued municipal green bonds.Further, to strengthen their financial independence, the budget will outline a roadmap allowing municipalities to launch services such as project consultancy and implementation training.A specific mention is expected for peer-to-peer mentoring, under which weaker municipal bodies will be brought under the aegis of better-performing municipal corporations and guided to replicate proven financial and governance practices, the officials said.“The budget speech may also highlight case studies from such cities to showcase how civic bodies can expand their financial base through better governance, innovation and market-linked instruments,” one of the officials cited above said.“A meeting was also held in December at the finance ministry with commissioners of some of the best-performing municipal corporations, who submitted their key