Municipal Budget

  • IASbaba
  • March 3, 2021
  • 0
UPSC Articles
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  • GS-2: Structure, organization and functioning of the Executive 
  • GS-2: Important aspects of governance, transparency and accountability, e-governance- applications 

Municipal Budget

Context: Union Budget and State Budget receive attention and coverage that is not the case with Municipal Budget.

Why Municipal Budget matters for common man?

  • Impacts Large number of people: A staggering 4,500+ municipalities in which over 300 million people live present their budgets every year during the budget season. 
  • Concerns with everyday matters: Municipal budgets deal with clean air, clean drinking water, clearing of garbage properly and on time, access to clean toilets at home and in public spaces, wastewater treatment and safe disposal, children and old-age friendly public places etc.
  • Substantial Financial Resource involved: We don’t yet have accurate data, estimates suggest that taken together, these 4,500+ city budgets aggregate to an amount in the range of Rs 1,50,000-1,80,000 crore annually.

Challenges with Municipal Budgets

  • Lacks Citizen Participation: Most municipal laws don’t provide for citizen participation in budgets or transparency in civic works and tenders
  • Not People Friendly: Budget documents themselves are not easy to read and understand for an average citizen
  • Issue of Transparency & Accountability:  Substantial expenditure in the city happens through parastatal agencies such as development authorities, transport corporations and water supply boards, which have separate budgets which are never discussed in the city council or covered in the media.

What is Participatory Budgeting?

  • “Participatory Budgeting” is a concept that was pioneered in the Brazilian city of Porto Alegre in the mid-1980s. It is now practised in one form or other in thousands of cities around the world.
  • Participatory budgeting (PB) is a process of democratic deliberation and decision-making, in which ordinary people decide how to allocate part of a municipal or public budget.
  • More recently the MyCityMyBudget campaign, first launched in 2015, is gathering traction in Bengaluru, Mangaluru and Visakhapatnam, as a collaborative effort between respective city corporations and neighbourhood communities. 
  • In these cities, over 85,000 budget inputs have been crowdsourced from over 80,000 citizens in over 350 wards on a wide range of civic issues. These inputs will be reviewed and incorporated into the city budget. 

Merits of Participative Budgeting

  • First Step towards responsive governance: This is significant because in the government system, allocating budgets is the first step towards getting any piece of work done. 
  • Local Solutions:  It facilitates a targeted, hyperlocal focus on budgeting and problem-solving.
  • Enhances Political & Public Trust:  It makes citizens feel like they have a voice in civic governance and thereby builds trust
  • Improves Efficiency: It addresses inefficiencies arising from misplaced prioritisation of civic works relative to citizen needs. 
  • Increased Accountability: Finally, it improves accountability for civic works at the last mile (as citizens would monitor budget execution).
  • Inclusive Governance: Children, women, senior citizens, the differently-abled and several interest groups would be able to make a case for their causes and aspirations in Municipal Budget through direct representations and have them fulfilled
  • Helps in better maintenance of assets: This would foster far greater ownership in communities for civic assets and amenities, thereby resulting in better maintenance and upkeep. At the local level, it is a win-win for communities, elected councillors and the city administration.
  • Strengthens Grassroots Democracy: Unlike the Union budget, the municipal budget is not just a financial or legal document. It can be an enabler of grass roots democracy in cities and tangible change for communities particularly children, women and the urban poor. 


We need greater degrees of citizen engagement and media engagement on Municipal budgets for them to become instruments of real change at a street, neighbourhood and ward level.

Connecting the dots:

  • 73rd and 74th Constitutional Amendment Act

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