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According to RBI report, MCs need major reforms to enhance revenue sources.

Banking & Finance | Dated: 22 Nov 2024

The Reserve Bank of India (RBI) report titled 'Own Sources of Revenue Generation in Municipal Corporations: Opportunities and Challenges' emphasizes the need for comprehensive reforms in municipal corporations (MCs) to improve their own revenue generation.

🎯 Key Highlights:

  • - It highlights the importance of tax reforms, rationalizing user charges, and strengthening collection mechanisms to address financial inefficiencies.
  • - The report analyzed the budgetary data of 232 MCs, covering over 90% of India's total municipal corporations.
  • - While MCs show surplus revenue accounts, they rely heavily on transfers from higher governments, limiting their financial autonomy.

💡 Other Important Facts:

  • (i) MCs' revenue receipts rose by 20.1% YoY (Year-on-Year) to Rs 1.7 trillion in FY24, up from Rs 1.42 trillion in FY23 and Rs 1.37 trillion in FY22.
  • (ii) The share of own resources in municipal revenue receipts increased to 61.9% in FY24 (Budget estimates), up from 59.7% in FY23 (Revised estimates).
  • (iii) Revenues, impacted during 2020-21, recovered in FY22-23, but remain concentrated, with the top 10 MCs accounting for 58% of total municipal revenue.

📚 Test Your Knowledge:

Which institution recently highlighted the need for major reforms in Municipal Corporations to boost revenue sources?

Correct Answer: RBI

🚀 Quick Recap:

About RBI

  • CEO : Shaktikanta Das
  • Headquarter : Mumbai