Janaagraha at the National Seminar on Strengthening Local Body Governance and Finances
How can cities strengthen their finances?
On 17 September 2026, Prabhat Kumar, Director – Public Finance Management (PFM) at Janaagraha, spoke on a panel addressing this question at a national seminar in Chennai, organised by the Government of Tamil Nadu’s 7th State Finance Commission and the Madras Institute of Development Studies.
In Session I, Revenue Augmentation of Local Bodies, the discussion brought together perspectives from State Finance Commissions, GIST/CRISP, PwC and Janaagraha on how Urban Local Governments (ULGs) can strengthen their own-source revenues (OSR) particularly through property tax, user charges and other non-tax revenues.
What does it take to strengthen municipal finances?
1. Incentivise property tax reforms
Property tax revenues have grown, but much of this growth has come from a relatively low base. State Finance Commissions could use dedicated or conditional grants to encourage cities to revise tax rates periodically and strengthen their tax systems.
2. Link grants to reform
Building on the 15th Finance Commission’s approach, State Finance Commissions could incentivise ULGs to expand their tax base and implement rate reforms.
3. Turn GIS mapping into a continuous process
Mapping properties is only the first step. Cities need comprehensive, regularly updated property-tax databases integrated with other datasets, supported by institutional processes that continue beyond individual officers’ tenures.
4. Build citizen trust through transparency
Ward- and zone-level data can help cities show residents how much revenue is collected from their areas and how it is used to deliver services. Making this connection visible can strengthen trust and willingness to pay taxes.
5. Keep strengthening own-source revenues
As grants from the 16th Finance Commission increase, cities must maintain their focus on raising their own revenues. Additional transfers should complement not replace efforts to improve OSR.
The discussion reinforced an important principle: stronger municipal finances require more than additional funds. They need sustained reforms, better data systems and greater transparency in how public money is raised and spent.
Helping Northeastern cities access the funds they need
Janaagraha and MoHUA’s orientation workshop on XVI Finance Commission grants to ULBs
Under the XV Finance Commission, Urban Local Bodies (ULBs) in the North Eastern region could not claim their full allocation, leaving around a quarter of the funds unclaimed.
The XVI Finance Commission has specifically recommended handholding support for North Eastern ULBs to help every eligible urban local body access and make full use of its grants. With approximately ₹6,731 crore allocated to ULBs in the region for 2026–31, timely compliance is more important than ever.
To support this effort, Janaagraha, in collaboration with the Ministry of Housing and Urban Affairs (MoHUA), Government of India, held an Orientation Workshop on XVI Finance Commission Grants to ULBs for the North Eastern States in Guwahati on 25 September 2026.
What did the workshop cover?
Chaired by the Economic Advisor, MoHUA, the workshop brought together 250+ officials from the states and ULBs of Assam and Meghalaya to understand the guidelines and requirements for accessing these grants.
The sessions covered:
-
XVI Finance Commission guidelines: Understanding the requirements for grants to ULBs.
-
CityFinance portal: A live demonstration of the portal.
-
Compliance and fiscal discipline: Understanding why timely compliance matters.
-
Financial management: Strengthening ULB systems to claim available funds and use them effectively.
The workshop received a positive response from the participating states and MoHUA, with more such workshops planned for the Northeastern region and potentially other parts of the country.
Through these workshops, Janaagraha aims to help ULBs navigate grant requirements, strengthen their financial management and ensure that funds allocated to cities reach them and are put to effective use.