Abstract

Background/Objectives: Increasing number of development agencies and economists are emphasizing on the merits of decentralization. In this context, this study examines the state of fiscal decentralization to sub-national governments in India. It highlights the incomplete process of fiscal decentralization to the urban local bodies in India and suggests reforms for the same.

Methods/Statistical Analysis: This study measures the extent of fiscal decentralization in India using various quantitative indicators as suggested by the International Monetary Fund, such as: share of sub national government in the revenues and expenditures of higher levels of government, sub national expenditures as a % of Gross Domestic Product, sub national revenues as a % of Gross Domestic Product, and share of own revenue and devolved resources in sub national government’s total revenue.

Findings: The main findings here suggest that India is a highly decentralized nation in terms of fiscal decentralization to State Governments, however, that is not the case when it comes to the urban local governments. Urban local bodies are neither able to raise adequate revenues from their ‘own’ sources, nor are they devolved much resources by the Centre and State Governments. A review of the Indian municipal finance system reveals that Indian municipalities lie in doldrums. There is an urgent need to relook into their finance system and carry out reforms. Given the limitations faced by the third level of government in raising revenue from ‘own’ sources, this paper presents a strong case to share the new Goods and Services Tax with them.

Improvements/Applications: It is expected that the GST Council and the concerned policy makers take the reform suggested into serious consideration so that cities can also get a share in the buoyancy created by them.

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Abstract

Background/Objectives: Cities in India suffer from haphazard growth, uneconomic extension of boundaries, spotty development, poor quality of infrastructure, and urban mobility problems. The problems are associated with lack of integration between spatial planning and transportation planning, and benign neglect of investment in public transport. In this light, this study explores the theory and international practice of New Urbanism, Smart Growth and Transit Oriented Development. The main aim of this study is to deliver strategic directions for the adoption of TOD as a key paradigm of regional and urban planning to develop efficient, equitable and sustainable cities.

Methods/Statistical Analysis: This study analyzes the existing institutional framework for public transport development and management in Indian cities, and identifies the challenges of financing and execution as the biggest impediments in successful implementation of Transit-Oriented Development.

Findings: The main findings of the paper suggest that the problems of spatial and transport planning in India are deeply ischolar_mained in the master planning model, borrowed from the town planning laws of the United Kingdom. The master planning model has failed to enable cities to exploit the links between agglomeration externalities, transportation and use of land. The synergy between transport and use of land for sustainable urban development is not exploited to full extent.

Improvements/Applications: This study suggests some corrective measures of financing public transit and connectivity infrastructure, and creating an institutional framework to plan, finance, implement and regulate public transport.

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