Balancing the books: Municipal budgets in India

After Union Government’s budget, many city governments are preparing their budgets. Jodhpur MC South recently approved an annual budget of INR 697.64 crore with a voice vote. The budget included city beautification activities for the G20 summit & implementation of digital initiatives by providing councilors & officials with iPads.

In India, budgeting is mandated by law for all local self governments. Municipal budgets are generally prepared by city govt’s finance department. Process begins with preparation of an estimate of city government’s income & expenditure for the next financial year by city’s administrative head (e.g. Commissioner). Then a committee (e.g. finance standing committee) reviews the estimates & drafts the municipal budget few weeks before financial year begins. The final version is submitted for approval in the house (council of all the elected representatives of the city) & goes into effect after approval from state government.

Along with an estimate of revenue & expenditure, city budget can also include provisions for specific schemes which the city has planned to undertake in future along with its financial position. For instance, Muzaffapur MC in Bihar has allocated INR 1 Crore towards sterilization of stray dogs. Meanwhile, Vijayawada MC is working towards improving the city’s sanitation and solid waste management, with the goal of enhancing its ranking in the Swachh Survekshan 2023. Furthermore, Indore has made a first move by issuing the nation’s first retail green bonds.

The issue of financing local governments has been a long debated issue in the context of fiscal decentralization, owing to the fact that the majority of ULBs rely heavily on grants from state and central governments to meet their expenditure requirements. Municipal budgets play a critical role in addressing the needs of the people, yet they are often overlooked and given little attention. It is imperative that these budgets receive greater attention and scrutiny, sensitizing people upon the influence of municipal budgets and their role in the same.

Has your city released their municipal budget? Read more.