This PPT delivered in Virtual Symposium on Municipal Councils in the G 20 Countries organised as a part of G 20 meeting in Doha Katar outlines briefly broad treands in Municipal Finances in India.

1. Trends in Municipal
Finances in India
Urban Governance and Urban Finance Consultant -
India
Dr. Ravikant Joshi
0

2. TITLE
India’s urban
population
projected to
cross 543 mn.
by 2031
Trends in
municipal
finances in India
By 2031 it will one of the largest Urban System / Municipal System of the World.
6 States of India namely - UP, Maharashtra, Gujarat, West Bengal, Karnataka,
Tamil Nadu will have ~ 50% of urban population
1
159
218
286
377
460
543
23%
26%
28%
31%
34%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
100
200
300
400
500
600
1981 1991 2001 2011 2021 P 2031 P
urban population mn % of total population
Source: Population projections for India and States 2011 – 2036, Report of Technical Group on population projections,
November, 2019 , Census of India.
2031 AD - Net increase ~ 166 million or 44% of 2011 base

3. TITLE
Overall trends
during 2002-
2018
Trends in
municipal
finances in India
In spite of other pressing needs, India maintained 1 % share of its municipal
finance in its GDP during 2002-2018.
In percentage share of municipal finance appears small but in absolute
terms increase is very substantial as India’s GDP has increased at high rate
during 2002-2018.
In absolute terms Size of Municipal Finance increased from INR 209.20
Billion ($ ) in 2002 to INR 1.717 Trillion in 2018 ($ ) within this
- Municipal Own Source Revenue increased from INR 132.80 billion to INR
733.31 billion
- State Government transfers to municipal bodies increased from INR
59.17 billion to INR 555.74 billion that more than 9 times
- Central (GOI) Government transfers to municipal bodies increased from
INR 5.85 billion to INR 205.69 billion that is more than 35 times
- Municipal other source Revenue increased from INR 11.37billion to
INR 222.12 billion.
2

4. TITLE
Urban CPEX
Trend in recent
years 2011-18
Trends in
municipal
finances in India
- CAPEX investment in urban infrastructure has increased from INR
430 billion in 2011-12 to INR 1.2 trillion in 2017-18 at CAGR of 16%
- Out of the total CAPEX investment of INR 1.2 trillion 45 % (INR 540
billion) is done by Municipal Bodies.
- CAPEX funding by GOI and State Governments increased from 75 %
in 2011-12 to 85 % in 2017-18.
- In per capita terms, average all-India urban investment is up from
INR 1182 in FY 11 to INR 2771 in FY 18, translating to a 13% CAGR
3
32,733 38,103 45,742 48,078 54,129 68,727
100,774 104,124
44,590 52,186 59,638 64,251 68,506
82,764
115,213
122,450
0.6% 0.6% 0.6% 0.6% 0.5% 0.6%
0.7% 0.7%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2011 2012 2013 2014 2015 2016 2017 2018
Centre/ State outlay ULB investments
Commercial finance Total Urban Capital Investment (in Rs. Cr)
% of GDP

5. TITLE
Future Trends
Envisaged
Trends in
municipal
finances in India
Projected and Recommended future trends in municipal finances are -
- A step up in GOI transfers to municipal bodies to about 0.32% of GDP by FY
2025 from 0.10 % at present,
- State Transfers go up to 0.70 % of GDP from existing 0.33% of GDP;
- Municipal Own Source Revenue contribution to increase from 0.43% to 0.79%
of GDP
- Total size of municipal finance envisaged by 2025 AD is 1.9 % to 2.0 of GDP
and up to 2.5 of GDP by 2030 AD
- To achieve this increased size of urban investment the resource mobilisation
thrust will be on –
- Property Tax
- User Charges
- Value Capture Financing – Land based fiscal tools
- Public Private Partnerships
- Leveraging Funds through Municipal Bonds & Market instruments
4