Faculty Coordinator: Dr.  Nirmal Roy V P

Faculty Team: Smt L Anitha Kumary, Dr Vidya V Devan, Dr Meenu Mohan, Dr Shency Mathew, Dr Sumalatha B S

Over three decades of decentralisation in India have yielded varying development gains, yet challenges persist in the design, functions, and funding of these local bodies. Though the lack of consistent data on both the rural and urban governments complicate the assessment of their efficiency and scale, there are also other issues that need theoretical and empirical exploration. The hypothesis that people migrate to areas with superior public services and lower taxes warrants further investigation in the Indian scenario, with high internal migration. Indian Local governments’ heavy reliance on intergovernmental grants, which can potentially create a “fiscal illusion,” undermining efforts to boost local funding, requires empirical verification. On similar lines, the “flypaper effect”, which suggests that external funds increase local spending but may diminish local revenue initiatives, also warrants further studies. This research pillar explores various pressing needs of local bodies especially with the rapid urban growth which is straining city finances, there is a pressing need for reforms in tax, non-tax and borrowing by local governments in the post-GST scenario. Finally, changes in India’s fiscal system necessitate an understanding of the impact of Centrally Sponsored Schemes, which often lead to functional overlaps and reduced flexibility. In tune with these issues, the neo-liberal push that the local governments are subjected to also requires examination.