Revenue Challenges of Municipal Corporations in India

The Reserve Bank of India (RBI) in November 2024 released a report highlighting revenue challenges faced by municipal corporations.

Key Findings

  • Indian cities contribute over 60% to GDP but rely heavily on government transfers.
  • Municipal revenue generation is only 0.6% of GDP (2023-24), far below the Centre (9.2%) and States (14.6%).
  • 74th Constitutional Amendment (1992) formalized urban governance:
    • Article 243X – Empowers states to authorize municipalities to levy taxes.
    • Article 243Y – Mandates State Finance Commissions (SFCs) to review revenue distribution.
  • Composition of Municipal Revenue
    • Taxes – 30%
    • Grants – 24.9%
    • Fees/User Charges – 20.2%

Financial Challenges

  • Municipal borrowings rose from Rs. 2,886 crore (2019-20) to Rs. 13,364 ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content
Buy May 2025 Issue

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material before the last six months of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

Related Content

Current Affairs