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Coping with Change: The Need to Restructure Urban Governance and Finance in India

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Author Info

  • M. Govinda Rao
  • Richard M. Bird

    (Institute on Municipal Finance and Governance)

Abstract

Over 330 million people live in India’s 5,165 cities, and 35 cities have a population of over a million each. Three (Mumbai, Delhi, and Kolkata) of the 10 largest metropolises in the world are in India. Over two-thirds of India’s GDP originates in urban agglomerations in the country. However, urban governance and finance in India leave much to be desired in terms of providing services to the country’s burgeoning urban population while accommodating different needs and pressures and adapting to shocks, whether natural or human-caused. This paper draws on lessons from fiscal federalism theory and the experiences of governance institutions and financing systems around the world to identify some key reforms needed to ensure more citizen participation and greater accountability in urban governance, and to augment and strengthen the capacity of Indian cities to deliver more adequate services and provide needed urban infrastructure.

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File URL: http://www.munkschool.utoronto.ca/imfg/uploads/175/raobird_imfg_no._4_online.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by University of Toronto, Institute on Municipal Finance and Governance in its series IMFG Papers with number 04.

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Length: 37 pages
Date of creation: Dec 2011
Date of revision:
Publication status: Published in hard copy and online
Handle: RePEc:mfg:wpaper:04

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Web page: http://www.munkschool.utoronto.ca/imfg/
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Keywords: India; metropolitan areas; governance; finance;

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References

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  1. Bandyopadhyay,Simanti & M. Govinda Rao, 2009. "Fiscal health of selected Indian cities," Working Papers 09/58, National Institute of Public Finance and Policy.
  2. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
  3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  4. Kornai, Janos, 1986. "The Soft Budget Constraint," Kyklos, Wiley Blackwell, vol. 39(1), pages 3-30.
  5. Weingast, Barry R., 2009. "Second generation fiscal federalism: The implications of fiscal incentives," Journal of Urban Economics, Elsevier, vol. 65(3), pages 279-293, May.
  6. R. Kavita Rao, 2008. "Goods and Services Tax for India," Macroeconomics Working Papers 22976, East Asian Bureau of Economic Research.
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