Research Digest
THEME OF THE FORTNIGHT
URBAN GOVERNANCE AND FINANCE
REPORTS
Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action
Authors: Sohaib Athar, Roland White, Harsh Goyal
Publication Details: The World Bank, 2022
This report assesses India’s growing urban infrastructure investment needs and the persistent challenges in attracting commercial finance. Despite increased fiscal transfers, private sector participation through debt remains limited, even in relatively strong municipal markets. The study presents updated estimates of investment requirements and examines fiscal, institutional, and regulatory barriers hindering commercial funding. It proposes a dual-track strategy: long-term structural reforms to enhance Urban Local Bodies' (ULBs) financial autonomy, and short-term targeted measures to unlock investment in high-potential cities.
Assessing the Financial Health of Indian Cities
Authors: K. Subalakshmi, Uttara Raghunathan
Publication Details: National Institute of Urban Affairs (NIUA) and Munify Datatech Private Ltd., 2023
The report examines the financial health of 25 selected Smart Cities in India. It analyses key financial indicators such as own revenue ratios, property tax growth, revenue surplus trends, establishment expenditure, capital investment levels, and borrowing practices. The findings highlight that most urban local bodies (ULBs) heavily rely on government grants for both revenue and capital expenditures, revealing concerns about their long-term financial sustainability. The report emphasises the need for strengthening own revenue generation, adopting better accounting practices, and policy interventions like a share of GST revenues to enhance the financial autonomy and creditworthiness of municipalities.
Read More:https://niua.in/intranet/sites/default/files/2928.pdf
RESEARCH PAPERS
Revenue Streams and Capital Outlay: An Empirical Study of Municipal Corporations in India
Authors: Adarsh Patel, Sunil Kumar Niranjan, Digvijay Singh, Anju Singh
Publication Details: South Asian Journal of Social Studies and Economics, 2024
This study investigates the fiscal structure of Municipal Corporations in India, with a focus on their revenue sources and capital expenditure trends. Using secondary data from selected corporations, the research assesses the extent of financial dependence on state and central grants versus own-source revenue. The analysis reveals limited financial autonomy, underwhelming capital outlay, and suboptimal fiscal management practices. The findings reflect the urgent need for reforms in municipal finance to enhance the efficiency, self-sufficiency, and service delivery potential of Urban Local Bodies (ULBs).
Read More https://journalsajsse.com/index.php/SAJSSE/article/view/896/1817
Bridging the Design / Finance Divide: Adding ‘Design Strings’ to the Finance of Urban Development
Authors: Matthew Carmona, Tommaso Gabrieli, João Bento
Publication Details: Journal of Urban Design, 2023
This article explores the intersection of urban development finance and design quality, highlighting how traditional financing mechanisms frequently overlook design considerations, leading to poorly planned urban environments. The authors propose the inclusion of “design strings”—design-based conditionalities—in financing instruments to embed quality standards into urban projects. By aligning financial objectives with urban design goals, this approach encourages collaboration between public and private actors, ultimately aiming to improve the quality, functionality, and sustainability of the built environment.
Read More: https://www.tandfonline.com/doi/full/10.1080/13574809.2023.2206549
Municipal Finance Shapes Urban Climate Action and Justice
Authors: Claudia V. Diezmartínez; Anne G. Short Gianotti
Publication Details: Nature Climate Change, 2024
This article explores how municipal finance frameworks shape climate action and justice outcomes in cities of the U.S.A. Drawing on 34 expert interviews, the study analyses how financial instruments—particularly debt financing—influence the design, timing, and equity of local climate initiatives. It finds that while some cities are beginning to embed justice considerations in their financial strategies, systemic barriers remain. The research highlights the role of municipal finance in enabling or constraining equitable and impactful urban climate responses.
Read More: https://www.nature.com/articles/s41558-024-01924-4
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