GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims + Mains·
Fiscal devolution and performance-linked incentives: a key GS3 topic for urban infrastructure and sanitation.
The 16th Finance Commission recommended a one-time urbanization premium grant for urban local bodies with populations exceeding one lakh to incentivize revenue growth and audited transparency.
The 16th Finance Commission proposed a one-time urbanization premium for urban local bodies with populations over one lakh. To qualify, bodies must publish audited figures, demonstrate 5% revenue growth, and states must have disbursed at least 20% of previous grants.
What is the minimum revenue growth required for urban local bodies to qualify for the urbanization premium?
Answer: (a) 5% — The note states that bodies must demonstrate 5% revenue growth to qualify for the premium.
Q. Discuss how fiscal devolution and performance-linked grants can address the infrastructure and sanitation deficit in India's rapidly urbanizing landscape.
Dimensions to cover in your answer
Keywords: Fiscal Devolution · Urban Local Bodies · Performance-linked Incentives · Revenue Growth · Urbanization
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