Public Finance Management

Transparency, reporting, and best practices for effective accountability

Overview

The program aims to strengthen cities (municipalities/ULBs) in India by focusing on a select range of reforms across municipal finances & staffing/capacities which has the potential to bring about irreversible municipal strengthening.

The five reform areas we believe can set in motion a virtuous cycle which will result in irreversible municipal strengthening are:

a) Rationalizing fiscal decentralization

b) Optimizing city/ULB revenues

c) Creating a functional municipal borrowings market

d) Building institutional capacities (enhancing human capital)

e) Fostering transparency and accountability.

In the medium to long-term, these will help municipalities deliver better quality services and infrastructure.

Objectives

The program works with (and supports) government institutions at all 3 levels – Union, State & Cities, and takes a three-track approach to encourage government action in the areas of municipal finance, capacities and citizen engagement, such as:

1) Policy advocacy at the national level (encouraging and promoting reforms)

2) Reform implementation support to state/city governments (creating proof-of-concepts)

3) Dissemination of playbooks to other state/city governments (helping achieve scale)

Intervention

At the national level, the program aspires to undertake targeted policy advocacy on the areas of fiscal decentralization, revenue optimization, infrastructure and municipal staffing. The focus is on supporting government institutions such as, the Ministry of Housing and Urban Affairs, Ministry of Finance, Central Finance Commission, State Finance Commissions, Comptroller and Auditor General of India, regulators, State Governments. This track is facilitated by

1) Policy analyses

2) Data analyses (both for diagnosis)

3) Digital platforms, playbooks and toolkits

4) Targeted pilots with limited implementation support

5) Policy advocacy (for solutions and implementation).

The program also engages with and provides support to state governments (Urban Development departments) through a ‘Super PMU Model’, on undertaking comprehensive diagnosis of municipal finance systems, conceiving reform roadmap and recommendations, identifying pilots for implementation, and providing handholding (implementation) support to the state/ULBs, which could include any of the following:

1) Comprehensive fiscal sustainability analysis of ULBs, based on ULB annual accounts & budget statements, and conceive a roadmap of recommendations to improve their financial position and performance

2) Revenue optimization

3) Fiscal decentralization

4) Strengthening municipal staffing systems by undertaking landscape study in respect of availability of adequate number of staff, skills and competencies, organisation design and performance management; undertaking a feasibility study on municipal shared service centres and if found feasible, advocating for adoption by states

5) Facilitate infrastructure financing

6) Fiscal responsibility and budget management

7) Transparency and Accountability

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