The limited revenue generation capacity of municipal corporations has increased their dependence on taxes and grants from the States. What are the issues associated with this trend? What measures are required to improve the finances of the municipal corporations in India? (Answer in 250 words)

73rd & 74th Amendment Act created Flash but live infusion of blood on the states - Manishankar Aiyar Committee. Issues associated with limited Revenue Capacity: (1) Own revenue only 57% of total revenue (40% in UK). (2) Non established borrowing through municipal bonds (10% in US). (3) Limited capacity of service delivery by the municipality. (4) Most municipality winning in losses (49) - Delhi Municipality. (5) Reusing corruption and status quo in municipalities. (6) Issues with rising temperature (Flooding, Landfill, Drought) - Flooding in Delhi (2023), Bengaluru, Nagpur, Aurangabad.

Issues associated with limited Revenue Capacity: Haphazard urbanization process in India - 35% live in slums (World Bank report). Too much dependence on state government for the funds. Limited capacity of service delivery by the municipality. Most municipality running in losses (49) - Delhi Municipality. Reusing corruption and status quo in municipalities. Issues with rising temperature (Flooding, Landfill, Drought) - Flooding in Delhi (2023), Bengaluru, Nagpur, Aurangabad. Measures to improve finances: (1) Allowing municipalities to borrow without state guarantees RBI. (2) Promoting municipal bond market value by Indore & Bengaluru. (3) Further devolution of funds to local bodies (15th Finance Commission recommendation). (4) Raising sources of own revenue from current 57% to about 20-25%. (5) Pooled financing mechanism for Tier II and Tier III municipality (Manishankar Aiyar Committee). Urban population will rise to 52% by 2050, he would able to develop in cities only with fuel devolution.