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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Revenues for smart cities: In the backdrop of growing number of proposed smart cities, discuss the importance of adequate revenue in its administration.
Sep 24, 2016 Related to : GS Paper-3

Ans :


Till now central government has finalised a list of 60 cities out 98 indentified cities under ambitious smart city project.  Government wants to develop these cities with all modern facilities and with environment friendly nature. Though central government provide 500 crore, but these are rumblings due to lack of adequate revenues.


  • In India there is no clear cut mechanism for regular resource transfers to our urban centres.
  • The report of the Fourteenth Finance Commission reiterated that constitutional provisions place local government squarely in the state list, with states having unquestioned discretion to assign functions and resources to municipalities.
  • Many states were not transferred required subjects to local bodies and these bodies are suffering from lack of resources.
  • Currently our urbanisation process remained blighted and stunted and constraining the overall economic growth of urban areas.

What needs to be done?

  • To sustain and develop as desired in smart city project, there is need to focus on tax and non tax revenues of these cities through both devolved and locally generated sources.
  • States clearly need more clear-cut mechanism and design for resource transfers to our urban centres, and it will help in its economic growth.
  • As reported by Finance commission our cities have huge potential for generation of funds at local level, for example property tax avenue.
  • Similarly there is much scope in to increase revenue from vacant land, including betterment of taxes.
  • Also cities need to be shore up user charges from utilities, public transport parking etc.
  • Local bodies must be compensated for civic services provided to state and central government offices.


Indian economy is one of the fastest and smart city projects in right step towards our current need. But our cities does not have adequate revenue avenue. Hence state must devolve some of its functions to local bodies. Our cities must raise far more revenues on their own, which is much needed to realise objectives of our smart city project.

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