The Sixteenth Finance Commission need to recognise the important contribution of urban local governments in economic development, increase allocations to them, reduce conditional and tied grants, provide funds for climate mitigation and adaptation measures, and provide monitoring services and strengthen monitoring systems in ULGs.

The 15th Finance Commission has made significant departures from the previous Central Finance Commissions in its recommendations for urban local governments, in its interim report for 2020-21. In this post, Mehta and Mehta highlight these and provide some suggestions for consideration in the final report, especially with regard to increasing allocation for sanitation, and making available more untied funds for urban local governments to enable them to meet exigencies of Covid-19-like situations.

The 14th Finance Commission has been hailed as ‘path-breaking’ for recommending larger fund allocations to state governments and giving them more autonomy in spending these funds. In this article, Meera Mehta and Dinesh Mehta highlight that the Commission has also recognised the need to trust and respect local government bodies, and has allocated much larger funds to them. Will this approach work and will state governments cooperate?