Municipal finance analysis: The case study of Gujarat (India)

  • Received September 13, 2020;
    Accepted December 23, 2020;
    Published January 4, 2021
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    Volume 9 2020, Issue #1, pp. 70-87

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This paper theoretically underpins the idea of greater involvement of local governments in the overall development of India explained through the theory of Fiscal Federalism. The theory outlines the dynamics of decentralization of power and functions through a multi-layered governance system leading to a new structure and added functions, finance, and accountability to local government. The paper also provides an overview of the increasing role of urban local governments in India and investigates whether the Urban Local Bodies (ULBs) of Gujarat – a state in India, are efficient to perform the functions and responsibilities assigned to them by the 74th Constitutional Amendment Act (CAA). It scrutinizes the financial health of local governments in the urban regions of India. The results based on the application of MANOVA indicate that the 74th CAA empowered ULBs with a strong economic base that these ULBs are capable of mobilizing their own resources. This means that smaller municipalities must develop and convergence must be supported by a proportionate level of grants. This will ensure that with the development of social infrastructure, economic activities will increase, and, as a result, the conversion will occur.

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    • Figure 1. Total income
    • Figure 2. Revenue expenditure across municipalities in Gujarat
    • Figure 3. Capital expenditure across municipalities in Gujarat
    • Table 1. Selected zones and districts of Gujarat
    • Table 2. Selected municipalities and their specialty
    • Table 3. Distribution of revenue expenditure
    • Table 4. Distribution of total income (in %)
    • Table 5. Deficits in budget (Rs. in crores)
    • Table 6. Revenue and capital expenditure of developed and developing municipalities
    • Table 7. Revenue and capital income of developed and developing municipalities
    • Table 8. Municipalities of North Gujarat and Saurashtra
    • Table A1. Total expenditure (Rs in Lakhs)
    • Table A2. Total income (Rs. In lakhs)
    • Conceptualization
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    • Data curation
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    • Formal Analysis
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    • Investigation
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    • Methodology
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    • Project administration
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    • Writing – original draft
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    • Writing – review & editing
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