A Study on Analysing the Financial Health and Risk Bearing Capacity of the Urban Local Bodies for Sustainable Financing
Keywords:
Sustainable Finance, Financial Health, Urbanization, Risk appetiteAbstract
Urban infrastructure is under increasing stress due to rapid urbanization. Addressing the long-term financial requirements arising from this growth and the evolving development agenda necessitates exploring innovative funding mechanisms. Although the roles and duties of Urban Local Bodies (ULBs) have expanded considerably after the 74th constitutional amendment Act their financial resources have not grown proportionally.
This study examines the financial health of Urban Local Bodies in Karnataka, focusing on their revenue generation capabilities and expenditure patterns. By analysing the ability of ULBs to meet their revenue expenditure out of own sources of revenue, evaluating the proportion of capEx out of overall expenditure and assessing their risk-bearing capacity, this research highlights critical gaps in municipal financing. The findings aim to provide actionable insights for improving the fiscal stability of ULBs and enhancing their ability to sustain and develop essential infrastructure
Downloads
Metrics
References
Bagchi, Soumen (2001): “Financing Capital Investments in Urban Infrastructure – Constraints in Accessing Capital Market by Urban Local Bodies”, Economic and Political Weekly, January 27. Bruhat Bangalore Mahanagara Palike, 2010-11 Budget presentation.
Bagchi, Soumen and Anirban, Kundu (2003): “Development of Municipal Bond Market in India: Issues Concerning Financing of Urban Infrastructure”, Economic and Political Weekly, February 2228.
Bagchi, Soumen and Chattopadhyay, Soumyadeep (2004): “Decentralised Urban Governance in India”, Economic and Political Weekly, December 4, 2004.
Bhowmik, P., & Ghosh, C. A. (2020). A Study on Municipal bonds as a Creative Financing Option for India. Journal of Management, 10(1), 10–14.
Cheol, Liu & Moldogazi, Temirlan. (2015). Public Sector Corruption in the U.S. States and Municipal Debt Finance: Do Local Governments Pay a Corruption Premium? SSRN Electronic Journal. 10.2139/ssrn.3107133.
De Angelis, Michael A. and Torbert, Sally and Liu, Lili (2017) Municipal Pooled Financing of Infrastructure in the United States: Experience and Lessons. World Bank Policy Research Working Paper No. 8212, SSRN:
Garayalde, M.L., González, S. y Mascareñas, J. (2019) "Project Finance" and economic development. A case study. REVESCO. Revista de Estudios Cooperativos, Segundo Cuatrimestre, Nº131, pp. 32-47. DOI: 10.5209/REVE.64302.
Ghodke, Manju (2004): “Accessing Capital Markets by Urban Local Bodies in India: An Assessment of Municipal Bonds”, in India Infrastructure Report 2004: Ensuring Value for Money, 3i Network, Oxford University Press, New Delhi.
ariwala, V. (2016). Analysis of Finances of Some Selected Municipal Corporations of Gujarat. Jariwala, VS (2016) Analysis of Finances of Some Selected Municipal Corporations of Gujarat. Prajna-A Journal of Humanities, Social Sciences and Business Administration, 18, 17.
Jha, G. (2003, December). Municipal Financial Resource Mobilisation Status, Concerns and Issues. In National Seminar on Municipal Finance, 12th Finance Commission, Indian Institute of Public Administration, New Delhi.
Kapoor, G., &Pati, P. (2017). Municipal Bond Market in India, Pahle India Foundation.https://pahleindia.org/pdf/publication/Municipal-Bond-Market-in-India.pdf
Malhotra, A., Mishra, A. K., & Vyas, I. (2020). Financing urban infrastructure in India through tax increment financing instruments: A case for smart cities mission. Journal of Public Affairs. https://doi.org/10.1002/pa.2554
Mathur, O.P. and Thakur, S., (2004) “India Municipal Sector- A Study for Twelfth Finance Commission, NIPFP, New Delhi.
Mathur, Om Prakash (2006): Urban Finance, in India Infrastructure Report, 3i Network, Oxford University Press, New Delhi.
Mathur, Om Prakash and Sanjukta Ray (2003): Financing Municipal Services: Reaching out to Capital Markets, National Institute of Public Finance and Policy, New Delhi.
Ming Su and Quanhou Zhao (2006): The fiscal framework and urban infrastructure finance in china, The Research Institute for Fiscal Science, MOF. P.R.China, World Bank Policy Research Working Paper 4051, November 2006
Mohanty, PK, B. M Misra and Goyal, Rajan (2007) Municipal Finance in India: An assessment Development Research Group Study, No. 26, RBI
Ms. Megha Jain, & Dr. Ravikanth Joshi. (2015). Municipal Finances in India – Unresolved Issues and Way Forward (S. Singh, Ed.). Bookwell.
Nallathiga, Ramakrishna. (2015). Municipal Bonds as a Source of Finance for Urban Infrastructure Development in India. Nagarlok (Quarterly Journal of Indian Institute of Public Administration). XLVII. 57-72.
Nosike, A. N., & Akujuru, V. A. (2002). Municipal Revenue Mobilization and Urban Economy. in Nigeria: Issues and Challenges. African journal of development studies (Vol. 3, Issue 2).
Rao, M. Govinda and Bird, Richard Miller, Urban Governance and Finance in India (March 11, 2010). Rotman School of Management Working Paper No. 1568858,
Ray Santanu, & Chakraborty Joy. (2008). Infrastructure Project Finance: Nature and its Relevance in Indian Context. ICFAI Journal of Infrastructure, Vol. 6, No. 1, pp. 6-17 http://www.people.hbs.edu/besty/projfinportal/
SZOT-GABRYŚ, T. (2013). Application of the Feasibility Study in Project Finance on the Basis of a Selected Investment Project. Hyperion International Journal of Econophysics & New Economy, 6(1), 117–132.
Takahiro Hattori (2018): Decomposing Municipal Bond Defaults and Liquidity Risk in Japan, Ministry of Finance Japan, Japan.
Thakur, & Ram. (2018). Municipal bonds: Innovative mechanisms to finance smart cities in India - Asia Pathways. https://www.asiapathways-adbi.org/2018/08/municipal-bonds-innovative-mechanisms-to-finance-smart-cities-in-india
The Economics Division of Credit Analysis &Research Limited [CARE]. (2014). Municipal Bond Market in India: The Way Ahead.
The SEC’s Office of Investor Education and Advocacy. (2012). Municipal Bonds: Understanding Credit Risk What are Municipal Bonds? https://doi.org/SEC Pub. No. 134 (12/12
Tumanggor, M. S. (2020). Issuance of Municipal Bonds through Capital Markets as Financial Revenue for Regional Development. In International Journal of Economics and Business Administration: Vol. VIII (Issue 3).
Vaaler, P. M., James, B. E., & Aguilera, R. v. (2008). Risk and capital structure in Asian project finance. Asia Pacific Journal of Management, 25(1), 25–50. https://doi.org/10.1007/s10490-007-9045-4
Vaidya, C. & Vaidya, H. (2008). Creative Financing of Urban Infrastructure in India through Market-based Financing and Public-Private Partnership Options, paper presented at the 9th Metropolitan Congress, Sydney, 22-26 October
Vaidya, Chetan (2007): Urban Issues, Reforms and way forward in India World Bank Studies (2011): Developing a Regulatory Framework for Municipal Borrowing in India, Volume 1 and 2.
Vaidya, Chetan and Brad Johnson (2001): ‘Ahmedabad Municipal Bond: Lessons and Pointers’, Economic and Political Weekly, July 28.
Venkatachalam, P., & Street, H. (2005). Innovative Approaches to Municipal Infrastructure Financing: A case study on Tamil Nadu, India. www.lse.ac.uk/depts/destin
Vipanchi. V & Dr. U Bhojanna. (2024): A study on sustainable sources of finance for financing the urban infrastructure projects in Karnataka, IPE Journal of Management, ISSN 2249-9040 Volume 14, No 25,
Yusupov, B., & Abdullah, A. (2014). Recent Tends in Energy Project Financing in Emerging Markets. Global Business and Management Research: An International Journal (Vol. 6, Issue 4)..
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Terms:
- Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
