Fiscal decentralisation for strengthening urban local government in India: Lessons from practices in developing and transitional economies
By: Jha, Gangadhar.
Material type:
ArticlePublisher: 2013Description: p.278-295.Subject(s): Decentralization - India | Public finance - India | Local government - India | Local government
In:
Indian Journal of Public AdministrationSummary: Decentralisation of decision making for planning and development of local government areas is critically contingent on fiscal decentralisation. Whereas deepening of democracy at the local level through decentralisation promotes transpareny and accountability in local decision-making process, the fiscal decentralisation prevents 'tax exporting' and facilitates funding at the margin through fiscal transfers from the higher level(s) of government. It also promotes accountability for the decision makers to fully bear the cost of decisions taken by them. It requires adequate sources of revenue that must be in consonance with the range of functions devolved to the local government. In India, one comes across a conspicuous mismatch between sources of revenue and functions devolved to the local self-governments. An overview of practices in fiscal transfers in different countries suggests that central to design of transfer system is the concern for equalisation that should enable local governments with different resource capabilities and different needs to provide the same level of services with some standard tax rates across various local government areas. - Reproduced.
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Indian Institute of Public Administration | Volume no: 59, Issue no: 2 | Available | AR101480 |
Decentralisation of decision making for planning and development of local government areas is critically contingent on fiscal decentralisation. Whereas deepening of democracy at the local level through decentralisation promotes transpareny and accountability in local decision-making process, the fiscal decentralisation prevents 'tax exporting' and facilitates funding at the margin through fiscal transfers from the higher level(s) of government. It also promotes accountability for the decision makers to fully bear the cost of decisions taken by them. It requires adequate sources of revenue that must be in consonance with the range of functions devolved to the local government. In India, one comes across a conspicuous mismatch between sources of revenue and functions devolved to the local self-governments. An overview of practices in fiscal transfers in different countries suggests that central to design of transfer system is the concern for equalisation that should enable local governments with different resource capabilities and different needs to provide the same level of services with some standard tax rates across various local government areas. - Reproduced.
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