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16th Finance Commission pushes self-reliant cities over grant dependence

Source: indianexpress.com

The 16th Finance Commission recommends giving cities more power to raise their own revenue instead of relying on central grants.
Urban areas currently generate only 13-15% of their spending needs through own taxes, with the rest from shared national taxes.
This shift could boost urban governance but risks widening gaps between rich and poor cities.

The 16th Finance Commission, tasked with deciding how taxes are shared between India's central and state governments for 2026-31, has spotlighted weak urban governance. It argues that cities need stronger financial powers to handle rapid urban growth, as current grants fall short. Involved are the Commission led by Arvind Panagariya, states, and urban local bodies. This matters because India's urban population will hit 600 million by 2036, demanding better-funded cities for infrastructure and se