Business Line | 'Financial position of municipalities, a cause for concern’

Jan 12,2018

Expressing concern over the financial position of municipalities, Minister for Housing and Urban Affairs, Hardeep Singh Puri, said that there are various challenges that the municipal finance market faces, including lack of timely disclosure, weak administration and political interference by way of waivers.

Speaking at the NITI Aayog’s National Workshop on Municipal Finance and Effective and Accelerated implementation of Smart Cities, Puri said: “Revenue of urban local bodies is declining in percentage terms, and they are becoming increasingly dependent on the Central and State government. The combined receipts of all municipalities in India are estimated to be less than ₹150,000 crore. With less than a third of this amount estimated to be from own resource.”

Also, an amount of ₹65-lakh crore, will be needed as capital investment and services in Indian cities for a period of 20 years.

“I am told that relatively less urbanised States such as Rajasthan, Jharkhand and Odisha have been impressive in ushering municipal finance reforms. Jharkhand is possibly the only State that is boldly experimenting with outsourcing of property tax collections,” said Puri.

As per the McKinsey Global Institute report, there is a need for 40,000 planners across cities – the present day figures are 1/10th of these. Also, 200-300 professionals, such as planners, geographers, economists, architects and digital experts, are required in tier 1 and 2 cities.

“I urge all State governments and municipal governments to look beyond IAS, and leverage the enormous talent that is available. Lateral entrants, particularly at the municipal level, should be become the norm and not the exception,” said Puri.