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

Author

Listed:
  • 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.

Suggested Citation

  • M. Govinda Rao & Richard M. Bird, 2011. "Coping with Change: The Need to Restructure Urban Governance and Finance in India," IMFG Papers 04, University of Toronto, Institute on Municipal Finance and Governance.
  • Handle: RePEc:mfg:wpaper:04
    as

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    File URL: https://tspace.library.utoronto.ca/bitstream/1807/81276/1/imfg_no._4_roa_bird_2011-11-28.pdf
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    References listed on IDEAS

    as
    1. Bandyopadhyay, Simanti & Rao, M. Govinda, 2009. "Fiscal health of selected Indian cities," Policy Research Working Paper Series 4863, The World Bank.
    2. R. Kavita Rao, 2008. "Goods and Services Tax for India," Macroeconomics Working Papers 22976, East Asian Bureau of Economic Research.
    3. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    4. Breton,Albert, 1996. "Competitive Governments," Cambridge Books, Cambridge University Press, number 9780521481021, March.
    5. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    6. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    India; metropolitan areas; governance; finance;

    JEL classification:

    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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