Praja Foundation released the “Fiscal Empowerment of City Governments 2026” report at a national consultation in Mumbai. The study analysed 398 budget documents from 2017-18 to 2025-26. It is the organisation’s third such report on municipal finance.
A study of 43 municipal corporations across 28 States and two Union Territories has found that cities in India depend on government grants for nearly 60% of their income. Own source revenue accounts for an average of 34.95% of total municipal income, while property tax contributes only 14.46%, lower than non-tax revenue’s share of 17.16%.
The average share of tax revenue in total municipal income for the 43 cities stood at 17.97%. Per capita own-source revenue was ₹2,664.69. Only 14 of the 43 cities published all nine budget documents on their website or in the public domain for the period under review.
Budget data as per account heads was published by 25 cities, while 14 cities issued budget data divided by department accounts. Twenty-five cities followed the format of accounting prescribed in the National Municipal Accounting Manual (NMAM) 2004. The remaining 18 cities used their own municipal code.
Twenty-three of the 43 cities do not have an independent authority to introduce new taxes from the list assigned under their respective State Municipal Acts. Nineteen cities lack independent authority to approve their budget as per the relevant Municipal Acts.
