An autonomous research institute under the Ministry of Finance


Fiscal Health of Selected Indian Cities

Publication date

Jan, 2008


Report submitted to the World Bank


M. Govinda Rao, Simanti Bandyopadhyay


The paper aims to assess the fiscal health of five urban agglomerations (UAs) in India viz. Delhi, Hyderabad, Kolkata, Chennai, and Pune. The main objective of the paper is twofold: First, to review the status of revenue generation and expenditure responsibilities of the constituent ULBs. Second, to assess the magnitudes of their fiscal gaps by estimating the expenditure needs and revenue capacities and give some useful recommendations to reduce these gaps. The main findings suggest that excepting five small ULBs in Hyderabad, others are not in a position to cover their expenditure needs through their present revenue collections. All UAs have unutilised potentials for revenue generation with the exception of one UA i.e, Hyderabad. All others would fail to cover their expenditure needs, even if they realise their revenue potentials. In all UAs, except Chennai, bigger corporations are more constrained than the smaller ULBs. The paper recommends better utilisation of ’own revenue’ handles of the cities, by improved administration of property taxes, implementation of other taxes, and collection of user charges.:

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