By Anand Sahasranaman, IFMR Finance Foundation
This is the beginning of a series of blogs on the Municipal Finance scenario in India. In the first post we look at the 74th Constitutional Amendment Act, the rationale behind it and its intentions.
A municipal or local government is the layer of government that is closest to the people. The principles of fiscal equivalence and correspondence provide a strong rationale for decentralisation on the grounds of efficiency and accountability. Correspondingly, the principle of subsidiarity makes the case for transfer of revenue generating powers to local governments so as to respond to their clients’ needs and provide appropriate services.
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