Urbanisation is rapidly spreading across the globe, more so in the third world countries. The traditional methods and mechanisms of urban panning are becoming outmoded in meeting the challenges of urbanisation, at least in the short and medium run. The economic liberalisation in India further fuelled the growth of Indian cities, which are becoming growth engines of the country's economy. Yet, many cities are not in a position to cope with economic development pressures in a sustainable manner due to the lack of processes, mechanisms and forward planning. Mumbai is also such an example, which in spite of having good planning institutions could not mould itself into a new economic reality in the past and has to deal with different kinds of problems now in order to enhance its competitiveness. Essentially, the master planning approach for city development has not been able to capture the economic and environmental profile and therefore the need for a perspective development plan with a strategic vision. The city, therefore, needs a strategic vision of its future and a blue print for achieving it in a reasonable time horizon. This paper reports the exercise of preparing such a perspective development plan together by Bombay First and McKinsey. It sets out the details of how the development vision can be formed, strategic actions can be delineated and how processes can be set-up for its realisation along with (not competing with) the city development master plan. It therefore, serves as an example to set out processes to envision a city's future development in order to transform it to globally competitive levels and to steer its implementation through establishing institutional reforms. 

Last two decades have been characterized by the process of decentralization in different parts of the world, either as a result of voices from local levels as in the case of Central/Eastern Europe & Latin American countries, or in response to process of national reform and reconstruction as in the case of Africa and South Asia, particularly Kenya, Uganda and India; or driven by increased pressure from donor agencies. Another important factor is Globalisation that is revealing newer dimensions of local governance, wherein cities in their respective regions are becoming nodal points for global flow of people, goods and information. In light of these forces, critical levels are emerging (or presumably emerging) in City Governments to address economic and social issues. Their success in this endeavour depends largely on meeting financial requirements for various tasks and stakeholders and this paper explores the different but inter-linked aspects of their financial health, revenue sources, budgeting capacity and expenditure planning, as these dictate how far they can address the emerging roles due to decentralization and globalisation.

Part one of the paper identifies common characteristics among cities of developing countries relevant to the subject of urban finance. Part two provides an overview of revenue streams available to city governments and factors affecting the buoyancy of these. Part three focuses on the institutional aspects of financial management. 

In the context of proposed rapid urbanisation in Asia, this article attempts to analyse the pattern, issues and policy aspects of urbanisation in the rapidly urbanizing state of India (Karnataka) and its capital city region (Bangalore city). Both India and Karnataka have encouraged 'top heavy character', city - region disparities and associated problems of environment and development of Indian urbanisation. Economically, urbanisation has greater association with the tertiary sector, and higher contribution from the primary sector has led to more of 'rurban' character of Karnataka's urbanisation. In Karnataka, Southern Maidan is the highest urbanised region with highest concentration of urban population, cities and towns as well as high growth performance towns. However, ecologically fragile Malnad region is also under urban population pressure. The trickle-down process has not succeeded in diffusing the benefits of urbanisation and associated infrastructure and services. This has led to more sharpened city regional disparities. The recent urbanization pattern has been promoting transport - corridor based urbanisation. Hence, to promote balanced regional development in the state, a four-tier hierarchy of urban centres has been proposed.  

The concentrated growth of urban population in the large and metropolitan cities of India leads to increase in their area and consequently results in substantial increase in transport, in the total number of trips per person per day, average trip length, trip cost etc. Hence, there is a dramatic increase in demand for various modes of urban transport, which are efficient, economical and adequate. The rail and road based mass transport systems are supposed to be the efficient transport modes to meet the demand. The usage of these modes depends upon their operational (physical) performance. However, the operational performance is largely contingent upon the financial performance which it self is subject to management efficiency and fare structure. The urban public transport services are often run not with a profit motive but keeping in view the socio-economic benefit of the commuters. The fare levels, therefore may not be fixed on cost considerations. In addition, free and concessionary passes are issued to the public at large. The revenue recovered from the fare box, being very low, in several instances, does not cover even its operating cost. As a result the public transport systems incur heavy losses. On the other hand, commuters using these services feel that the fares are on the higher side. In views of these, the questions raised above become crucial to transport managers.

This paper tries to find an answer to the aforesaid critical questions. In doing so, it analyzes the fare fixation theories/policies and fare fixation in practice. Finally, it gives suggestions for adopting suitable pricing policy for urban transport.