Reserve Bank of India – Press Releases

Today, the Reserve Bank of India (RBI) launched the Report on Municipal Finances. Compiling and analysing budgetary knowledge for 201 municipal companies (MCs) throughout all States, the Report explores ‘Alternative Sources of Financing for Municipal Corporations’ as its theme.

Highlights:

a) The speedy progress of urbanisation in India has not been accompanied by a corresponding enhance in city infrastructure, which is mirrored within the efficiency of the city native our bodies, particularly MCs.

1. While the dimensions of the municipal budgets in India are a lot smaller than friends in different nations, revenues are dominated by property tax collections and devolution of taxes and grants from higher tiers of authorities, leading to lack of monetary autonomy.

2. MCs’ dedicated expenditure within the type of institution bills, administrative prices and curiosity and finance costs is rising, however capital expenditure is minimal.

3. MCs principally depend on borrowings from banks and monetary establishments and loans from Centre/State governments to finance their useful resource gaps within the absence of a properly-developed marketplace for municipal bonds.

b) MCs have to undertake sound and clear accounting practices with correct monitoring and documentation of varied receipt and expenditure objects, and discover totally different modern bond and land primarily based financing mechanisms to enhance their sources.

This Report has been ready within the Division of State Finances of the Department of Economic and Policy Research. The Report is accessible on the Reserve Bank’s web site (www.rbi.org.in). As that is the primary version, readers and stakeholders are requested to ship their priceless feedback and options to The Director, Division of State Finances, Department of Economic and Policy Research, Reserve Bank of India, Shahid Bhagat Singh Road, Mumbai – 400 001. Comments may also be forwarded by way of e-mail.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/1175