Urban Local Bodies (ULBs) rely on various sources of funds to fulfill their responsibilities and provide essential services in urban areas.
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The funding for ULBs can vary depending on the country’s governance structure. Common sources of funds for ULBs include local taxes such as property tax, professional tax, entertainment tax, and advertisement tax, which generate revenue for the ULBs.
Additionally, ULBs collect user charges for services such as water supply, sewage, solid waste management, parking, and licenses. Grants from central and state governments are another important source of funds for ULBs, providing financial support for specific projects, schemes, or development initiatives. ULBs may also resort to borrowing funds from financial institutions or issuing municipal bonds to finance infrastructure projects. Some ULBs receive a portion of state or central taxes through revenue-sharing arrangements.
Finally, ULBs can engage in public-private partnerships (PPPs) where private entities invest funds in infrastructure projects in exchange for revenue-sharing or long-term concessions.