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Fiscal decentralization refers to the transfer of financial powers and responsibilities from higher levels of government to local bodies, enabling them to plan, implement, and manage urban development initiatives effectively. It is an essential pillar of urban governance because cities require adequate and predictable resources to meet the demands of infrastructure, housing, sanitation, transport, and environmental management. The dimensions of fiscal decentralization include revenue assignment, expenditure responsibilities, intergovernmental transfers, borrowing powers, and institutional capacity. These dimensions collectively determine the autonomy and efficiency of municipal governments in managing public resources. The first dimension is revenue assignment, which defines the scope of taxation and non-tax revenues that municipal authorities can impose and collect. Clear delineation of revenue sources between central, state, and local governments is critical to avoid overlaps and disputes. Local bodies often receive authority to levy property tax, user charges for water supply and solid waste management, license fees, and other service-related levies. Revenue assignment also requires the legal empowerment of municipalities to revise rates, enforce collection, and reduce leakages. Without such autonomy, cities remain dependent on higher governments, limiting ______ ___ _____ ___ _________.
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