Sturdy Financing Needed To Improve ULBs

Sturdy Financing Needed To Improve ULBs

Sturdy Financing Needed To Improve ULBs

In India, there are about 3,636 urban local bodies (ULBs). But unfortunately, ULBs in India do not have much power. Poor government policies usually have a major impact on ULBs. As, the Indian Constitution did not make local self-government in urban areas a constitutional obligation, it is difficult for ULBs to do much better.  

ULBs include municipal corporations, municipalities and nagar panchayats that are looking at ways to spend efficiently and raise revenues, especially by focusing on untapped internal resources.

Even the 74th Constitution Amendment Act (CAA) was introduced to strengthen decentralization at the grass-root level. However, the amendment clearly stated that the duty for urban planning, water supply, social and economic planning, slum upgradation and public health lay in hands of ULBs. But it did not lay down the revenue base for cities to accomplish these functions effectively. State governments have the power to determine the revenue base.

The financing needed to improve existing cities and provide for orderly urban growth is huge. There should be a policy atmosphere that allows cities to plan urban growth through revenues raised internally.

There are many revenue streams available. These are:

  • property tax
  • stamp duty
  • building license fees
  • hawker/vendor fees
  • other land-based charges such as betterment levy/valorisation/impact fees/exaction
  • public-private partnership
  • advertisement fees

Of the above-mentioned revenue streams, advertisement fee are the key tools for revenue growth. Revenues collected through leasing advertisement rights on assets owned by several government organisations can turn out to be a game changer.


The ministry of urban development released a strategic plan (2011-16) in which it accepted that there is a huge potential for out-of-home (OOH) advertisement fee to add noticeably to the funds available to ULBs.

The plan also highlighted that lack of innovation, poor application, and weak administration are key interruptions to executing an efficient advertisement revenue strategy.

Outdoor advertising is now advanced to the level that it can be almost as useful as traditional advertising media like newspaper, radio, and TV. Today, out-of-home advertising has taken marketing to an entirely new level. It offers new digital technologies, new lighting, and material, new formats and involvement of more creative thinking to make messages reach a larger number of people than ever before.

What are the benefits of outdoor advertising?

No extra cost: Cities do not have to make capital investment. They just have to meet a few routine requirements.

Popular: In a city's prime locations, there are many places with high vehicular and pedestrian traffic. For advertising to have a large impact, this is important.

Revenue growth: The additional revenue can significantly contribute towards reducing fund deficit, and also lower a city's dependence on tax accumulations.

Can improve social awareness: An exclusive part of the available advertising space can be reserved for promoting social messages and other important information about the city's development, government, and its initiatives.

Lower operation and maintenance costs: Many cities are challenged when it comes to effective preservation of public convenience facilities, bus stops, parks, etc. Such assets can be used as an advertisement medium, and this can be coupled with responsibility for their operation and maintenance as well.

Last Updated: Wed Sep 28 2016

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