Municipal Expenditures in India: An Assessment

Abstract

The fast pace of urbanization in India has created a massive demand for civic services and infrastructure which is provided by Urban Local Bodies (ULBs). The size of municipal governments in the country is very small and total expenditure are a mere 1.2 - 1.4 percent of GDP.  An analysis of expenditure through two ratios – capital to total expenditure and revenue to capital expenditure provide insights to the nature and quality of municipal expenditure in 22 States for the span 2019-20 to 2022-23. The findings show revenue expenditure constitutes a greater percentage as capital expenditure on average comprises only 43.04 percent of total expenditure. Further, municipal corporations across States follow divergent transition paths and hence there is an emergence of clubs for both the expenditure ratios.