Metropolitan Finances in India: The Case of Mumbai City Corporation

Achieving sustainable development requires particular attention to the provision of public services in large metropolitan cities. The objective of this paper is to analyze the finances of Mumbai, the largest Indian city. The population in the core city (central business district) of Mumbai has actually shown a decline between 2001 and 2011 census, and the population in the area covered under the Municipal Corporation of Greater Mumbai (MCGM) which includes suburban areas has increased at just 1.2 per cent over the 10 years. This however, does not mean there has been any abatement of migration in search of employment. Most of the migrants have been settling down in the MMR region due to non-availability affordable rental housing within the city. Mumbai has been a centre of economic dynamism, but its future vibrancy depends improving its efficient public service delivery. The study will analyze the finances of the MCGM with a view to identifying areas of reform to enable to create the required agglomeration economies. Section 2 will provide a brief history of Mumbai, its evolution as a major metropolis, its importance in the State and national economy. Section 3 will analyze the assignment of functions and sources of finances of Mumbai Municipal Corporation. Sections 4 will identify and analyze the problem areas and list the challenges before the MCGM. The final section lists the major initiatives required to reform the city finances in Mumbai. In identifying reform areas, the paper will also attempt to draw lessons from some of the successful experiments in other cities in the country.