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Fiscal decentralization is one of the most important dimensions of urban governance and planning, as it empowers local governments to raise, allocate, and spend resources according to the needs of their constituencies. In the context of urban planning and development, fiscal decentralization has a direct bearing on the ability of municipal governments to provide essential services such as water supply, sanitation, solid waste management, housing, roads, and urban infrastructure. It also enables local authorities to promote inclusive growth, address urban poverty, and ensure sustainable development. However, fiscal decentralization is not merely about transferring financial powers; it involves a multi-dimensional process that includes political, administrative, and institutional aspects, all of which must be aligned with developmental goals. The first important dimension of fiscal decentralization is the assignment of functions and responsibilities. Local governments can only exercise fiscal autonomy effectively when their functional responsibilities are clearly defined. In many cases, urban local bodies are expected to perform functions such as urban planning, regulation of land use, provision of basic services, and local infrastructure development. When these functions are devolved without adequate financial powers, municipal bodies face an imbalance between responsibilities and resources. Thus, fiscal decentralization requires a systematic framework that matches expenditure responsibilities with adequate revenue powers, ensuring local governments can perform their functions without excessive dependence on higher levels of government. The second dimension is ________ __________ __________ __________ ___.
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