Mumbai shows why India’s cities need more tax revenue

Mumbai shows why India’s cities need more tax revenue

Acute fiscal stress is building in India's states and municipalities, including the urban authority that manages the richest city, Mumbai.. State government accounts deserve scrutiny because they collectively spend 36% more than the federal administration.. Of the 24 trillion rupees ($340 billion) that Prime Minister Narendra Modi's team hopes to pull in via taxes in the coming fiscal year, less than a third is intended for the states.. Every year, Mumbai's creaking infrastructure faces a huge risk from flash floods.. New Delhi, the capital, is at least contained in a mini-state, which gives the city access to a more diversified resource pool, such as taxes on petroleum products.. In reality, states are getting less than a third of what New Delhi collects.. Without bumping up local capital spending, people's incomes and their ability to pay taxes and fees won't rise fast enough to reduce national debt..