Municipal finance Assessments
The 74th Constitutional Amendment Act (CAA), recognised municipalities as the third sphere of government. However, they continue to depend on state governments for their functional and financial powers. It is important to identify the role of cities as independent and empowered governing units. One of the enabling elements is financial empowerment and autonomy.
Municipal governments have a range of revenue sources, e.g central and state government transfers, own tax resources, non-tax revenues, etc. CWAS has carried out various studies to understand the sources of municipal revenue. The studies of finance commission grants for urban local governments, city finances and flow of funds for water and sanitation in a state were carried out. City budgets were studied thoroughly to understand their dependence on intergovernmental transfers.
Based on the city budget, ‘budget briefs’ are prepared for councilors and residents. These have helped them understand the budget and its implications. State finance assessment is carried out to examine the devolution of funds from the state to local governments under various programmes. Local government finance assessment provides an overview of the municipal finance and identifies measures to improve the finances of local governments.