Lok Sabha Question No. 6328 (UNSTARRED), answered on 2026-04-02
Subject: Strengthening of Urban Local Bodies
Ministry: HOUSING AND URBAN AFFAIRS
Asked by: Shri Sribharat Mathukumilli

## GOVERNMENT OF INDIA

## MINISTRY OF HOUSING AND URBAN AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 6328

## ANSWERED ON APRIL 02, 2026

## STRENGTHENING OF URBAN LOCAL BODIES

## NO. 6328.  SHRI SRIBHARAT MATHUKUMILLI:

Will  the  Minister  of  HOUSING  and  URBAN  AFFAIRS  be  pleased  to state:

- (a) whether any study has been undertaken to assess the institutional and fiscal capacity requirements of Urban Local Bodies (ULBs) at the local government level and if so, the details thereof;
- (b) the steps being taken by the Government to strengthen and increase the revenues of ULBs in the country and the results yielded so far during the last five years, particularly in Andhra Pradesh;
- (c) whether the Government proposes to launch any new programmes for capacity  building  of  ULBs  to  improve  implementation  of  urban missions and schemes and if so, the details thereof;
- (d) whether  any  such  studies  have  examined  international  models  of municipal revenue mobilisation including property taxation and fiscal autonomy and if so, the details thereof; and
- (e) whether the Government has identified any best practices from such international  models  that  could  be  adapted  to  strengthen  the financial position of ULBs in the country and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF HOUSING AND URBAN AFFAIRS (SHRI TOKHAN SAHU)

- (a):    As  per  entry  5  of  list  II-State  list  of  Seventh  Schedule  of  the Constitution  of  India,  'Local  Government'  is  a  state  subject  and  urban planning is a function of Urban Local Bodies (ULBs) as envisaged in the Twelfth Schedule of the Constitution of India. Accordingly, strengthening of institutional and fiscal capacity of ULBs is primarily the responsibility of the respective State Governments. The Government of India supplements the efforts of the States through various schemes, policy initiatives and advisories.

(b):  The  Government has taken several steps to strengthen institutional capacity and augment the revenues of Urban Local Bodies (ULBs) through initiatives such as the Scheme for Special Assistance to States for Capital Investment  (SSASCI),  fiscal  transfer  recommended  by  Central  Finance Commission,  Atal  Mission  for  Rejuvenation  and  Urban  Transformation (AMRUT) & AMRUT 2.0, etc.

Ministry of Housing & Urban Affairs (MoHUA) has been providing incentive to ULBs for issuance of Municipal Bonds at the rate of ₹ 13 crore per ₹ 100 crore worth of bonds issued with maximum incentive of ₹ 26 crore per ULB. Second time eligibility only for issuance of Green bonds at the rate of ₹10 crore incentive per ₹100 crore of bonds issued, restricted to a maximum incentive of ₹20 cr. As per information by States/UTs and Securities and Exchange Board of India(SEBI), ₹ 5584 crore has been raised by ULBs in AMRUT cities, out of which ₹200 0 crore has been raised by Amaravati and ₹80 crore has been raised by Vishakhapatnam in Andhra Pradesh.

Under  AMRUT 2.0,  through  various  reform  initiatives  such  as,  Outcome Based Reforms, Jal Hi Amrit and AMRUT Mitra, a to tal of ₹75.95 crore has been sanctioned during the last five years to the State of Andhra Pradesh. Under  SSASCI  2025-26,  the  State  of  Andhra  Pradesh  has  reported integration of property tax portal with Online Building Permission System (OBPS) and 10 cities/ULBs of Andhra Pradesh viz. Vijaywada, Rajahmahendravaram,  Eluru,  Machilipatnam,  Guntur,  Nellore,  Tirupati, Chittoor, Kadapa and Anantapuramu have linked property tax portal with revenue/registration portal.

Further, out of total allocation of ₹ 4,860 crore for Andhra Pradesh under the Fifteenth Finance Commission award period, an amount of ₹4,051.76 crore has been released to ULBs in Andhra Pradesh. Al l 123 ULBs in Andhra Pradesh  have  been  updating  Audited  Financial  Statements  data  since financial year (FY) 2021 -22 as per recommendations of Fifteenth Finance Commission.

Further, the Government of India, in the Budget 2025-26, has announced setting  up  of  an  Urban  Challenge  Fund  (UCF)  of  Rs  1  lakh  crore.  UCF supports raising market finance for strengthening of urban infrastructure through implementation of projects under three verticals namely 'Cities as Growth  Hubs', 'Creative Redevelopment  of Cities' and, 'Water and Sanitation'.

(c): There is no such proposal at present in the Ministry to launch any new programme for Capacity Building of ULBs.

(d)&(e): The various reforms already rolled out via the Finance Commission Grant releases, SSASCI  and  other  reforms  undertaken  by  MoHUA, contributes to improving the municipal revenue mobilization process.

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