Issues in Local Government Reform in India

Abstract

This paper reviews the status of rural and urban local governments in India. The focus is on the recent constitutional reforms that strengthen local government, (including subsequent supporting legislation), and the implications for changing local government to achieve more effective delivery of services to constituent populations. Particular attention is paid to finances and revenues, since enhancing local government fiscal resources is crucial for the success of reform in this dimension. An overview of the financial situation and resources of this level of government is provided, plus an economic analysis of the political, managerial and other institutional constraints on effective local government service provision.

JEL Classification: H7, H2