Assessment of the Municipal Finances in the North Eastern Indian State of Mizoram

Authors

  • James L.T. Thanga
  • Ashley Lalremruati
  • Lianhmingthanga

Abstract

The increasing level and pace of urbanization necessitate more and more municipal service delivery. The emergence of growth opportunities would require an efficient supply of infrastructure – water supply, drainage, and solid waste management, etc., and the municipalities have been the providers of such services. Growing urban infrastructure and service requirements require augmenting resources from various sources to meet expenditure requirements on operation and maintenance and provision of services. Thus, sound financial management with continuous efforts to mobilize own revenue sources by the urban local bodies and a well-functioning mechanism of revenue transfers from the higher governments would be the key to making them function efficiently in the urban administration and delivery of basic services. This paper assesses the finances of the Aizawl Municipal Corporation (AMC), the only municipality in Mizoram. The study observed that the finance of the AMC is heavily dependent on fund transfers from the Central and State governments and that the average contribution of revenue from own sources to the total revenue receipt (TRR) from 2015-16 to 2021-22 was only 11.59%, which renders the Corporation vulnerable in its ability to provide basic infrastructure and civic services. Moreover, the own revenue receipt is less than one-third of the revenue expenditure of the Corporation throughout the years under study with no visible sign of improvement. The only tax revenue source is property tax, which showed time volatility with an annual growth rate of 14.2% since its introduction, and has indicated a promising trend in its collection with the resumption of economic activities during post covid-19 pandemic. The burgeoning revenue expenditure outpacing revenues from own sources and fund transfers from central and state governments is a concern. Resources increasingly directed towards committed and non-productive activities could hamper the ability of the Corporation to deliver quality civic infrastructure and services while also posing a challenge to the sustainability of the handling of solid waste management, the core function of the corporation.

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Published

2023-02-02