Why are Finance Commission grants to cities still so limited?
- Posted on March 9, 2026
- By The Hindu
- 5 Views
Why are Finance Commission grants to cities still so limited?

Despite urban centres generating a large share of GDP and government revenue, the devolution of funds to urban local bodies remains limited, with transfers continuing at around 0.13% of GDP. The 16th Finance Commission links a portion of urban grants to performance conditions and increasing own source revenue, raising concerns about fiscal autonomy and federal intervention in urban development.