Question 3GS2GS2

How can the financial woes of urban local bodies be tackled through innovative funding? (Answer in 150 words)

Introduction

Urban local bodies suffer from low funding, with only 0.15% of GDP devolved to ULBs opposed to 4% in South Africa (RDI).

22 words

Main Body

Urban local bodies suffer from low funding, with only 0.15% of GDP devolved to ULBs opposed to 4% in South Africa (RDI).

Financial woes of ULBs

32% of property tax revenue (LGI)

15% of revenue grants from external & tied to user fees

70% revenue = expenditure poor capital

Role of innovative funding for ULBs:

Impact bonds – raise funds through impact bonds on project specific manner (green energy, urban mobility)

Municipal bonds – Index for solar power plant, Bengaluru – reduce dependence on grants & decentralize cheaper some with opportunity & govt

Crowd funding – Armstrong lane People's bond Attract philanthropists

Private shareholding and equity issuance Participative model for entrepreneurs & venture capital funds

TSSETs – seek investments of institution infrastructure project by quality checks & discipline in project completion Monetization of assets lease out revenue cycle of city assets

Consumers in history to attract finance innovative project based proper identification & handling Satisfy investors → register on blind stock exchange

The ULBs should be financially strong with proper infrastructure & dedicated capital pushed to explore & efficiently utilize innovative financing.

191 words4 paragraphs6 bullet points

Conclusion

The ULBs should be financially strong with proper infrastructure & dedicated capital pushed to explore & efficiently utilize innovative financing.

20 words

Diagram

Flowchart showing Financial woes of ULBs with components: 32% property tax revenue (LGI), 15% of revenue grants from external (Tied to user fees), 70% revenue = expenditure poor capital

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Page 5

Topper

Samiksha Dwivedi

AIR 56

Subject & Paper

GS2GS2

Topic

Federal Structure - Functions, Responsibilities, Devolution of Powers and Finances

Local Self Government

Urban Local Bodies - Financial Resources and Innovative Funding

Writing Stats

233

Total words

Paragraphs

Bullets

analytical

Tone