An autonomous research institute under the Ministry of Finance


Improving the Fiscal Health of Large Cities: Evidence from India

Publication date

Aug, 2007


Report submitted to the World Bank


Kala S. Sridhar, Simanti Bandyopadhyay, Satadru Sikdar


The primary objectives of the project were to compute expenditure needs (estimated in the case of Kolkata, but computed in the case of other cities due to lack of data), revenue capacities and come up with fiscal gaps faced by these cities in the provision of core urban services such as water supply, sewerage, sanitation, solid waste, municipal roads, and street lights for all local governments within these urban agglomerations. For estimating revenue capacities, the non-agricultural district domestic products for the districts in which the local governments were located, were used. For computing expenditure needs, standard norms on what is acceptable for expenditure on various public services were used, and gaps between desired and actual expenditure were arrived at. The difference between the actual expenditure gaps and the potential revenue capacity was computed as the fiscal gap. Six reports were submitted to the World Bank for each of the cities -- Kolkata (in June 2007), Delhi, Pune, Hyderabad (in December 2007), Chennai, in addition to a synthesis report (in February 2008).

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