Fiscal Sustainability of Small and Medium Cities in India: Some New Dimensions

Simanti Bandyopadhyay, Subrata Majumder and Aishna Sharma
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Simanti Bandyopadhyay: Shiv Nadar University, Delhi-NCR, India
Subrata Majumder: Sundarban Mahavidyalaya, West Bengal, India
Aishna Sharma: Shiv Nadar University, Delhi-NCR, India

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: Three strands of performances of governments are embedded in a public finance cycle: how effectively expenditures get translated to services, services lead to revenues, and revenues result in effective expenditures. We assess the performances of 910 city governments in southern India using Slack-based Data Envelopment Analysis. Our main findings suggest that irrespective of size, services have not generated sufficient revenues, primarily due to poor collection efficiency. Cities could have incurred the same levels of expenditures with lesser revenues, indicating suboptimal resource utilization. Smaller cities suffer from unrecoverable supply bottlenecks, the maximum in roads followed by water. Finally, misutilization of establishment expenditures is prevalent.

Pages: 29 pages
Date: 2024-06
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