The inability of Urban Local Bodies to raise own revenue is a major impediment in urban self-governance. In this context discuss a comprehensive strategy to make ULBs more sustainable by raising own fund.

  • May 20, 2021
  • Posted by: OptimizeIAS Team
  • Category: DPS Topics
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Hint: Pretty straightforward question as the own revenue is the biggest roadblock faced by ULBs.

Introduction (I): ULBs as an outcome of 74th amendment.

Body (B): 1) Highlight how ULBs suffer from lack of own source of revenue (mention also current sources of revenue) with facts (Ex- Economic survey data) and how it impacts their functioning: No autonomy to decide priority, tied funds, No responsibility as the fund transmission is from top and in absence of lack of accountability they har hardly responsible etc, ground-level requirement and plan biggest sufferer.

2) Suggest a framework: Ex- State Finance Commission to suggest revenue measures for ULBs, Municipal bonds, Better compliance mechanism (Ex- Eco Survey said ULBs not able to collect even the taxes assigned to them with full efficiency) etc.

Conclusion (C): Financial autonomy is most important for any level of government to function efficiently.

Devolution of Powers and Finances up to Local Levels and Challenges Therein Functions and Responsibilities of the Union and the States Issues and Challenges Pertaining to the Federal Structure The inability of Urban Local Bodies to raise own revenue is a major impediment in urban self-governance.