Financial Implications of Decentralisation: Issues Concerning Resource Mobilisation by Urban Local Bodies

The Constitution Seventy-fourth Amendment Act 1992, which came into effect on 1 June 1993 is considered to a major breakthrough in the history of urban governance in India. It is considered to a significant initiative towards decentralization. The present paper is an attempt to look into the aspect of decentralization initiative in India in the form of 74th Amendment. The objective is two fold- firstly to look into the fact the how far decentralizing is the decentralization initiative, i.e., whether the decentralization initiative has succeeded in empowering the city governments in true sense, specifically speaking in respect of their financial situation. Secondly, if there has been any empowering of the city governments, how has it got reflected in the resource generation capacity of the urban local governments. The impact of decentralization is being studied on the basis of a decentralization index constructed for the purpose.