Financing Urban Infrastructure in India: A Review Financing Urban Infrastructure in India: A Review

Abstract

In most Indian cities, the problem of financing of urban infrastructure is acute and most of the challenges of financing are still unanswered. The condition is worse for the urban governance where many of the urban local bodies are heavily dependent on the higher tier of government in the shape of grants. The chronic fiscal ill health owing to continuous huge revenue deficit has hamstrung the functioning of the local governance resulting poor performance of civic services and infrastructure. The high rate of urbanization coupled with industrialization and economic development is exerting significant additional pressure on civic services and infrastructure across cities in India. In order to meet these growing challenges, the present scenario of the urban infrastructure financing needs overall reforms. The recent past has seen increased attention being given by the Central and State Governments to improve the delivery level of municipal civic services and infrastructure by providing adequate funds and financial support in their plan, policies, and programmes etc. The main purpose of this research article is to undertake a review of infrastructural finances in India and suggest possible way outs to make the urban local bodies with efficient and improved services and infrastructure. The reforms suggested by 12 and 13 Central Finance Commissions, JnNURM, 74 CAA, HPEC, etc are considered in the paper. All these can collectively equip urban local bodies better for averting risk in the face of rapid urbanization and urban growth.