City Finance Rankings 2022

Recently, the Union Ministry of Housing and Urban Affairs (MoHUA) has launched guidelines for a new finance-based ranking of cities – City Finance Rankings 2022, which would evaluate urban units on 15 key parameters. The Ministry also launched a separate ranking – ‘City Beauty Competition’, to evaluate cities on beautification.

Issues impacting development goals of several cities –

• Meagre revenue from municipal bodies own sources such as property tax and user charges.
  • • Currently, the own revenues generated by the municipal entities in India are barely 0.15% of the GDP compared to 0.6% in developing countries and 2.1% in developed nations.
    • This led to the high dependence on funding from the state and central exchequer.
• Poor management of finances.
• Delay in audit of financial reports.
• The Centre has been maintaining that robust finances of urban local bodies are crucial to emerge as a viable third tier of government.

About the City Finance Rankings 2022 –

• It aims to —
  • • Evaluate, recognise and reward India’s cities (Urban Local Bodies/ULBs) on the basis of the quality of their current financial health.
    • Help ULBs to improve over time in financial performance.
    • Motivate city/state officials and decision makers to implement municipal finance reforms.
• The participating ULBs will be evaluated on 15 indicators across three key municipal finance assessment parameters, namely –
  • • Resource Mobilization
    • Expenditure Performance and
    • Fiscal Governance
• The cities will be ranked at the national level on the basis of their scores under any one of the following four population categories – Above 4 million, Between 1-4 million, 100K to 1 million, less than 100,000.
• Significance —
  • • At a state and national-level, the rankings will provide critical insights to key policy makers into the state of finances of ULBs.
    • ULBs will be able to self-evaluate their own performance vis-à-vis other cities, which can help them in self-improvement in future.
    • All 4500+ cities / ULBs across all states/UTs would be encouraged to participate in the City Finance Rankings 2022.
    • It would create a conducive environment for developing a robust municipal finance ecosystem for promoting financially healthy, transparent and sustainable cities.

About the ‘City Beauty Competition’ –

• It aims to encourage, recognise and felicitate the transformational efforts made by cities and wards in India to create beautiful, innovative and inclusive public spaces.
• Wards and public places of cities would be judged against the five broad pillars –
  • Accessibility
  • Amenities
  • Activities
  • Aesthetics and
  • Ecology

Other initiatives for urban development in India –

• Some of the single sector interventions are, Swachh Bharat Mission (SBM), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Pradhan Mantri Awas Yojana (PMAY), etc.
• On the other hand, the Smart Cities Mission (SCM) is based on integrated planning and implementation.