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Municipal Finance – Funds

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As part of our series on Municipal Finance, this blog post discusses the present state of municipal finances by taking an in-depth look at municipal revenue and expenditure in India.

Municipal Revenue

According to the Thirteenth Finance Commission, in 2007-08, municipal revenue constituted 0.94% of GDP (at market prices) in India. This is well below that of other emerging economies like Brazil and South Africa, where corresponding figures are 5% and 6% respectively.

The main sources of municipal revenues can be boxed under the following categories:

  1. Tax revenues
  2. Non-tax revenues
  3. Assigned (shared) revenue
  4. Grants-in-aid
  5. Loans
  6. Other receipts

Broadly, they can be categorized as own revenue (tax revenue and non-tax revenue) and other revenue (shared revenue, grants-in-aid, loans and other receipts).

This post first appeared in our Financing Small Cities Blog. To read the full post click here.

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