SFC recommends 5% of GST revenue allocation to municipal bodies, including GBA corporations
GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims + Mains·
Why in news
The Fifth State Finance Commission recommended that the Karnataka government earmark at least 5% of its total GST revenue generated in cities to urban local self-governments
Background
The commission estimates that the 5% GST revenue allocation would increase municipal body revenue by 52%. It also proposed ward-wise devolution of funds to address natural disasters and communicable diseases.
Facts for Prelims
- FactThe Fifth State Finance Commission recommended a 5% GST revenue allocation to urban local self-governments in Karnataka.
- FactThe proposed allocation is estimated to increase municipal body revenue by 52%.
- PlaceGreater Bengaluru Authority is one of the bodies included in the recommendation.
- FactThe commission suggested ward-wise devolution of funds for natural disasters and communicable diseases.
For Mains
Q. Discuss the significance of fiscal devolution to urban local bodies in ensuring sustainable urban governance and infrastructure development in India.
Dimensions to cover in your answer
- Fiscal autonomy: Linking municipal revenue to state economic growth via GST shares
- Disaster resilience: Ward-wise fund devolution for localized emergency response and public health
- Revenue diversification: Leveraging municipal properties and advertisement hoardings for non-tax income
Keywords: Fiscal Federalism · Urban Governance · Revenue Devolution · Local Self-Government · Sustainable Urbanization
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