By Vishnu Prasad, IFMR Finance Foundation
As part of our series on Municipal Finance, this blog post discusses the present state of municipal finances by taking an in-depth look at municipal revenue and expenditure in India.
According to the Thirteenth Finance Commission, in 2007-08, municipal revenue constituted 0.94% of GDP (at market prices) in India. This is well below that of other emerging economies like Brazil and South Africa, where corresponding figures are 5% and 6% respectively.
The main sources of municipal revenues can be boxed under the following categories:
- Tax revenues
- Non-tax revenues
- Assigned (shared) revenue
- Other receipts
Broadly, they can be categorized as own revenue (tax revenue and non-tax revenue) and other revenue (shared revenue, grants-in-aid, loans and other receipts).
This post first appeared in our Financing Small Cities Blog. To read the full post click here.