COVID-19 and fiscal health of selected cities in India

Soumyadip Chattopadhyay (), Asmita Kar () and Anamika Chanda ()
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Soumyadip Chattopadhyay: VISVA-BHARATI (A Central University, Department of Economics and Politics
Asmita Kar: VISVA-BHARATI (A Central University, Department of Economics and Politics
Anamika Chanda: VISVA-BHARATI (A Central University, Department of Economics and Politics

SN Business & Economics, 2025, vol. 5, issue 12, 1-17

Abstract: Abstract Based on available secondary data of selected cities, this paper examines the state of municipal finance and it’s determinants in India during pre-COVID and post-COVID phases.During COVID, Indian cities experienced decline in own source revenue generation capacities. Although there are indications of fiscal recoveryin the post-COVID phase —particularly in terms of own-source revenue and financial autonomy—significant disparities continue to exist among different size-classes of cities. Non-tax revenues exhibit strong post-COVID recovery in smaller cities.The slow growth in revenue expenditure raises concernsabout operation and maintenance of urban basic services. Composite Decentralisation Index and financial autonomyemerge as important determinants of financial performances of Indian cities in both phases. Literacy rate and SC/ST population share show negative effects, suggesting the underlying issues of poor urban service delivery.So, this paper argues for greater fiscal empowerment of cities, optimising own source revenue generation, strengthening the linkages between municipal taxes and services and increase in the share of untied funds to cities.

Keywords: Municipal finance; Urban services; COVID-19; India; R51; H72 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-01005-4

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