City budgets and infrastructure financing (India)

India’s urban population has witnessed rapid growth in recent decades, a trend expected to continue. This surge in urbanization necessitates substantial investments in urban services, demanding reform in municipal institutions for effective financing. Despite increased transfers from state and national governments, India’s urban municipal governments face financial challenges due to limited and inflexible tax bases. The 74th amendment provides local governments with more autonomy, yet achieving economic independence is crucial for addressing extensive infrastructure demands. Focused on three case cities – Bhopal, Jaipur, and Lucknow – the research evaluates municipal budgets in the context of infrastructure finance. Bhopal stands out in managing its budget and services efficiently, showcasing improved financial capabilities. However, the study emphasizes the need for enhanced fiscal autonomy for all municipalities in India, offering general recommendations to empower municipal finances for sustainable urban development. These suggestions pave the way for further research and adoption nationwide.