#CityReflections Singularities of Municipal Finance

Event Report
Rehmat Arora

A Book discussion on “#CityReflection Singularities of Municipal Finance,” authored by Sameer Unhale and published by IMPRI Books, was conducted by the #IMPRI Center for Habitat, Urban, and Regional Studies (CHURS), IMPRI Impact and Policy Research Institute, New Delhi on October 28, 2023.

Municipal Finance

The event unfolded as a comprehensive exploration of the intricate world of municipal finance and governance. The panel of esteemed speakers, including Dr. Rumi Aijaz, Dr. Purnima Chauhan, Prof. Shyamala Mani, and Prof. Mahalya Chatterjee, delved into the multifaceted facets of this critical domain. They provided valuable insights, ranging from the constitutional framework that governs municipal finance to the challenges in budgeting, accounting, and decentralized financing models.

The event’s discussions underscored the significance of clarifying fund allocation, the pivotal role of state finance commissions, and the need for more in-depth studies to address regional disparities within India’s municipal finance landscape. The session was chaired by Dr. Rumi Aijaz and the book’s author, Sameer Unhale, facilitated the session, ensuring that it ended with a call to action to strengthen the financial systems and governance structures of urban local bodies, ultimately fostering sustainable urban development in India.

Understanding Municipal Finance

Dr. Rumi Aijaz, in his opening remarks, set the stage for the discussion, emphasizing the gender diversity within the municipal governance framework and the significance of finance commissions in resource allocation. He highlighted the importance of understanding municipal finance within the broader context of the constitutional amendments, addressing the nuances of devolution. Dr. Aijaz also underscored the complex relationship between revenue generation, tax collection, and resource allocation, calling for clarity in municipal governance and the critical role of state finance commissions in ensuring equity and transparency. His insights laid the foundation for a deep dive into the intricacies of municipal finance.

The Author’s Perspective

Mr. Sameer Unhale, the author of “Singularities of Municipal Finance,” offered his perspective on the challenges and complexities within municipal finance. He shed light on the need for operational efficiency in urban local bodies, underscoring the importance of revenue and expenditure balance sheets for various services. He acknowledged the need for comprehensive research projects, encouraged by academic institutions and think tanks, to delve into the intricacies of municipal finance. Mr. Unhale also highlighted the potential of decentralized water treatment projects, and suggested that technological advancements could further empower smaller towns and transitory urban areas.

The Role of Urban Governance

Dr. Purnima Chauhan brought a unique perspective to the discussion by emphasizing the need for capacity building and efficiency improvements within urban local bodies. She stressed the significance of operational efficiency and performance evaluation, highlighting the challenges in accounting for urban services. Dr. Chauhan also discussed the potential of the Green Credit Program and the role of special purpose vehicles (SPVs) in urban development. Her insights underscored the vital link between urban governance and fiscal prudence in driving sustainable urban development.

Challenges of Resource Allocation

Prof. Shyamala Mani delved into the challenges of resource allocation within urban local bodies. She emphasized the scarcity of funds and the difficulties in accessing them, particularly for smaller local bodies. Prof. Mani raised questions about the lack of resources for capital expenditure, despite the constitutional emphasis on the third tier of governance. She highlighted the need for corporate sector involvement in urban development, given their substantial benefits from urbanization. Her insights reiterated the pressing need for robust financial resources to address urban challenges and climate change.

Comprehensive Review of the Book

Prof. Mahalya Chatterjee provided a comprehensive review of “Singularities of Municipal Finance.” She categorized the book’s content into several crucial themes, including constitutional amendments, public finance, accounting, financing options, the economic-municipal finance interface, and pandemic lessons. Prof. Chatterjee recognized the book’s significance in shedding light on municipal accounting and budgeting transformation. She commended the author on addressing issues related to political economy, such as reservations and their impact on financial systems. Prof. Chatterjee also suggested the need for comparative studies across states to better understand regional disparities in municipal finance.

Closing Remarks by Sameer Unhale: Towards a Holistic Approach

Mr. Unhale concluded the discussion by acknowledging the panel’s valuable insights. He embraced the suggestions presented during the session, particularly the call for more comparative studies across states to address regional variations in municipal finance. Mr. Unhale stressed the importance of research projects supported by academic institutions and think tanks to delve deeper into the nuances of municipal finance. He reiterated the potential of decentralized water treatment projects and technological advancements in empowering smaller towns and transitory urban areas. The session’s closing remarks echoed the need for a holistic approach to strengthen the financial systems and governance structures of urban local bodies, ultimately promoting sustainable urban development in India.

Acknowledgement: Rehmat Arora is a Research Intern at IMPRI.

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