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Financing India’s Cities: How the 15th Finance Commission changed the status quo

Posted by : Chetan Kulkarni , Boston , North America, Urban Designer
08 Mar, 2021 14:35:59

Viswanathan, of Janaagraha Centre for Citizenship and Democracy, explains how the 15th Finance Commission (FC) report (2021-22 to 2025-26) “has shattered the current status quo and changed the trajectory of financial governance reforms in India’s cities.” The report has mandated a strategic use of government funds focused on achieving human development goals around water, sanitation and waste management. The report builds on progressive measures from previous FCs, as follows. First, the “substantive increase in funding to cities in comparison to the 14th FC”, must be accompanied with a strong resolve by state governments and municipalities to ensure that funds are utilised to “executing works or delivering services” to citizens. Second, the 15th FC mainstreams metropolitan governance in India through grants to Urban Agglomerations (population above 50-million) to tackle issues like air pollution, water supply, sanitation and waste management, which do not adhere to municipal boundaries. Third, municipalities are required to be transparent with their accounts and disclose them in a timely manner in order to access any grant. 

In light of these measures, the 15th FC has advocated for “data-driven decisions at municipal and state levels, and also opportunities for mayors, councillors and citizens to engage more closely with such open civic data.” It will be important to track over the five-year period of how the push for reforms through the 15th FC report will affect the “incubation for new cities,” and how this will take place in parallel with other national programs initiated at different levels of the government.