Assessing the Legal Framework for Municipal Fiscal Autonomy in India
Legal authority is not, by itself, sufficient to ensure strong municipal finances. But it is a necessary part of the institutional architecture within which fiscal capacity can develop. Understanding the powers conferred on municipalities — and the approvals, limits and safeguards governing those powers — is important for assessing the space available to ULGs to manage their finances and respond to local priorities.
This report seeks to answer a central question: what financial decisions are municipalities legally empowered to take, and under what conditions? It does this by analysing municipal legislations across 9 states i.e. Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, and Uttar Pradesh and assessing both the extent of fiscal discretion provided to municipalities and the conditions, approvals, safeguards and forms of oversight attached to the exercise of that discretion.
