Infrastructure Finance In The Time Of Revenue Crunch: Exploring New Avenues for Urban Local Bodies

Infrastructure in general and urban infrastructure in particular has proved to be a pons asinorum of economic development. Whilst infrastructure is an umbrella term, provision of many of its components is the duty of the urban local bodies (ULBs). Given the financial crunch faced by the ULBs, innovative initiatives are called for. This paper looks at the specific situation in the state of Maharashtra. Pointing out the heterogeneity in the composition of ULBs within Maharashtra, the paper goes on to suggest two such initiatives for raising resources. One of the initiatives deals with the bond financing and creation of modified financial products; the other addresses the question of rationalization of property tax. In each case the difficulties and pre-requisites are dealt with.