Determinants of Own Revenues in Urban Local Bodies

Evidence from an Indian State

Bibliographic Data

ID20404723
AuthorsKala Seetharam Sridhar (0000-0002-7739-9297, Institute for Social and Economic Change, corresponding author), Vishal Ravi (Government of Karnataka)
Year2022
Volume13
Issue1
Pages86-98
Publication date2022-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEnvironment and Urbanization Asia (JOURNAL)
Journal identifiersISSN: 0975-4253 • E-ISSN: 0976-3546
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/09754253221076317
OpenAlexW4214879893
LanguageEN
Citations received1
References cited10

Our objective in this article is to understand the determinants of sustainable (own source) revenues of cities and empirically estimate it in the context of an econometric model. This article makes an attempt to understand the determinants of own revenues for ULBs in India, taking the case of a prominent state, Karnataka. We empirically examine the determinants of own source revenues, controlling for endogeneity of several variables, using valuable data for cities in Karnataka, a representative Indian state. We find that higher city per capita incomes and effective literacy rates lead to a large tax base for the city economy. Road length has a positive effect on the city’s tax base, presumably as it leads to accessing jobs easily and increased economic activity, which also gives the public more confidence and motivation to pay taxes. Per capita grants lead to higher own source revenues for the city. The policy implications are to educate the workforce in the cities better, and invest in roads, rather than viewing them as expenditure

Business · Econometrics · Economics · Endogeneity · Geography · Per capita · Population · Public economics · Revenue · Tax revenue · Fiscal Policy and Economic Growth · Housing Market and Economics · Local Government Finance and Decentralization · Finance

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