Simanti Bandyopadhyay

Bio: Simanti Bandyopadhyay is an academic researcher from Shiv Nadar University. The author has contributed to research in topics: Revenue & Tax revenue. The author has an hindex of 2, co-authored 7 publications receiving 28 citations.

Assessing the Performance of Kolkata Municipal Corporation: Implications for Service Delivery

Abstract: We assess the fiscal health of KMC by estimating the gap between revenue and expenditures over a period of last 10 years. It is found that the own revenues generated by the KMC are not sufficient to meet its expenditures. Even when we account for PPP and grants from the government the expenditures exceed the revenue receipts. The revenue receipts have registered a greater fall than the fall in the revenue expenditures. This gap has been filled up by raising loans, which is not a sustainable solution in the long run. While the revenue expenditures on services already fall short of the expenditure norms and comprise of only 45.4 percent of the total revenue expenditure of the KMC, we identify a further burden on it in the form of other major yet unavoidable components like pension funds, electricity charges, and administration and support. We estimate the revenue capacity and estimate the best-case scenario using certain simulation exercises. It was found that if we raise the own revenue to GCP to 2 percent, the KMC is unable to meet the revenue expenditures. However, when we push the own revenue to GCP ratio further to 4 percent, to equate it to revenue expenditure to GCP ratio, the KMC is comfortably able to meet all its revenue expenditures. When we compare the own revenue to revenue expenditure on all the services (that is water supply, sewerage and drainage, streetlights, roads and solid waste management), we estimate that the desired own revenue to GCP ratio is 1.72 percent. The ratio is almost the same, 1.7 percent of the GCP, when we consider expenditure needs on all the services. In conclusion, we suggest to either tap better the existing revenue handles like property tax, car parking fees, road charges, etc. or develop new non-tax handles/ user charges like charges from cable operators or mobile towers. At the same time, it is important that KMC diverts most of its expenses towards providing basic services to it populace.

Towards Sustainable Cities: Lessons from Urban Decentralization in India and Bangladesh

Abstract: Fiscal and financial management in South Asian cities typically face constraints in capacity and utilization of resources. This paper attempts a systematic analysis of three corporations in the region: the Indian city of Kolkata (Kolkata Municipal Corporation, KMC) and the city corporations in Bangladesh’s capital city, Dhaka (Dhaka North City Corporation, DNCC, and Dhaka South City Corporation, DSCC). Based on the incomes and expenditures of these corporations, this paper attempts for the first time a comparison in the status of finances and service delivery in cities of two South Asian Countries. The main findings suggest that the revenue receipts of KMC is significantly higher than that of either DNCC or DSCC or even both the bodies combined. This is true for own revenue as well as for grants from the upper tiers. Both DNCC and DSCC have expenses, which are way below the low level of existing earnings. These expenses are less when compared with international expenditure norms also. For KMC the revenue is not sufficient to cover the expenditures. For DNCC and DSCC, levels of expenditures on provision of urban services are abysmally low, which is also reflected in the status of service delivery in these cities. Property tax accounts for the lion’s share of the tax revenue in both Kolkata and Dhaka. For Dhaka, non-tax revenues obtained from fees, fines, rates, etc. have a higher share in own revenue, while Kolkata has higher shares of taxes. Interestingly, despite the low revenue generation capacity of the DNCC and DSCC, this is what comprises the bulk of total revenue. Grants received from the upper tiers are very low in DNCC and DSCC compared to the fact that close to half of KMC’s total revenue comes from grants. We also estimated the GCP for Dhaka and Kolkata and did some simulation exercises for estimating the revenue capacities. Based on these exercises, we suggest that KMC should generate up to 4 percent of their GCP as revenues for the corporation. For Dhaka, 1 percent of GCP as revenues in both DNCC and DSCC are estimated as their potentials.

Coping with Change: The Need to Restructure Urban Governance and Finance in India

Abstract: Over 330 million people live in India’s 5,165 cities, and 35 cities have a population of over a million each. Three (Mumbai, Delhi, and Kolkata) of the 10 largest metropolises in the world are in India. Over two-thirds of India’s GDP originates in urban agglomerations in the country. However, urban governance and finance in India leave much to be desired in terms of providing services to the country’s burgeoning urban population while accommodating different needs and pressures and adapting to shocks, whether natural or human-caused. This paper draws on lessons from fiscal federalism theory and the experiences of governance institutions and financing systems around the world to identify some key reforms needed to ensure more citizen participation and greater accountability in urban governance, and to augment and strengthen the capacity of Indian cities to deliver more adequate services and provide needed urban infrastructure.

Urban Governance and Finance in India

Abstract: Over 330 million people live in India’s cities; 35 cities have a population of over a million and three (Mumbai, Delhi and Kolkata) of the 10 largest metropolises in the world are in India. India’s cities are large, economically important, and growing. However, neither urban infrastructure nor the level of urban public services is adequate for current needs, let alone to meet growing demands. Dealing with this problem is a formidable challenge. Not only must adequate finance for the provision of services be found but it is critical to ensure that the money spent results in desired outputs and outcomes. To do so, local governance structures also need to be reformed and strengthened. This paper attempts to point the way towards some possible solutions by analyzing urban governance and finance in India in the context of lessons drawn from fiscal federalism theory and experiences of governance institutions and financing systems both in India and around the world. No one system of urban governance is likely to work equally well for all urban local bodies. However, the paper identifies some key reforms required to realize both the constitutional intent to encourage citizen participation in urban governance and the economic and politically desirable goal of ensuring greater accountability of urban governments. For example, the paper draws attention to existing ambiguities in the assignment system and underlines the need to undertake activity mapping to ensure clarity as well as to make independent agencies significantly accountable to elected governments in urban areas.The paper also discusses a variety of ways of augmenting the resources of the municipal bodies in the country including essential reforms in the property tax system and adequate exploitation of user charges and fees for various services delivered as well as ways of strengthening and improving central and state transfers to urban local governments. With respect to financing urban infrastructure, development charges should be used more effectively. More should also be done to utilize public lands more effectively. In addition, to a considerable extent capital expenditure requirements will have to be financed through borrowing so further development of the municipal bond market is important, as is more and more effective use of public private partnerships in some areas.

City power and urban fiscal crises: the USA, China, and India

Abstract: This essay comparatively examines the current urban fiscal crisis in US, Chinese, and Indian cities from the perspective of city power. The urban fiscal crisis in the USA is closely linked to the subprime mortgage crisis of 2008 as municipal governments largely depend on property tax as revenue sources. In China, municipal debt has increased sharply since 2008, not because of the recession, but because of the binge borrowing and overinvestment in infrastructure under the state stimulus programme, which was initiated by the central government to minimize the effects of the global recession on the Chinese economy. In India, cities have been in a perpetual state of fiscal crisis due to the stalled devolution of power from state to municipal governments. The comparison on authority, responsibility, and fiscal autonomy of city governments in the three countries demonstrates that the urban fiscal crisis has to be understood in plural terms, as the various assemblages of city power have given rise to a multitude...

Grant financing of metropolitan areas : a review of principles and worldwide practices

Abstract: In the new information age in the globalized and interconnected world, metropolitan areas hold the key to the future prosperity and growth of nations. This paper takes a closer look at grant-financing regimes faced by metropolitan areas and their role in facilitating or hindering improvements in economic and social outcomes of residents of metropolitan areas. A review of 42 large metropolitan areas worldwide shows that, with a few notable exceptions, metropolitan areas in general are hamstrung from playing their potential role in economic advancement. Metro areas have large economic bases and therefore little a priori needs for grant financing, yet they have strong dependence on central transfers. This is because of the highly constrained fiscal autonomy given to these areas, especially in developing countries, with the singular exception of metro areas in China. Such a strong reliance on transfers undermines local autonomy and local accountability. General purpose transfers are formula based , transparent and predictable yet they discriminate against metropolitan areas as they utilize a one size fit all (common formula) for all local governments -- large or small. Such formula typically incorporate equal per jurisdiction component that discriminates against large metropolitan areas. Compactness is rarely rewarded and the greater needs of metro areas for transportation, education, health, culture and welfare go unrecognized. Overall the emphasis in grant financing of metro areas deals with vertical fiscal gaps or project based specific purpose grants. To ensure that metropolitan areas can play their dual roles in improving economic and social outcomes for residents, it is important to strengthen their fiscal autonomy while at the same time enhancing their accountability to local residents. The paper argues that results based grant financing of social and transportation services and tournament based approaches to encourage inter-jurisdictional competition need to be given serious consideration to ensure metropolitan autonomy while strengthening citizen based accountability.