City Pulse

Even before the pandemic, the city finances and revenues of Indian cities, officially called Urban Local Bodies (ULBs) were uncertain, lacking transparency and accountability. Of the 4500-odd urban local bodies, many don’t publish their annual audited accounts. Even when they do,  they are indifferent, outdated formats and some ULBs take a couple of years to publish the reports.

Timely publication of audited accounts verified by third-parties is the first step for ULBs to raise more funds and also become financially independent and sustainable in the long run. To set this process in motion, this portal will be a one-stop-shop for potential investors in municipal finance bonds to gather detailed financial reports of ULBs and also compare the same. It also gives them an opportunity to shed old practices, come clean about their accounts, and look out for more finances. Prabhat Kumar, Manager, Municipal Finance at Janaagraha speaks about the journey up until now. 

For all the novices, tell us what City Finance is? 

cityfinance.in is an initiative of the Ministry of Housing and Urban Affairs (MoHUA) in collaboration with Janaagraha. It is a web-based tool designed to share information on financial performance of Urban Local Bodies (ULBs) and allows comparisons between municipalities. It provides standardised, timely and credible financial information on cities. The portal aims to transform the financial management of cities with improving financial accountability and sustainability. Currently, the portal hosts 2,700 financial statements (comparative balance sheets and income statements) of 1500 ULBs, credit ratings, reports and details on municipal bonds issued till date. The portal will assist city executives and mayors in benchmarking the ULB’s performance and financial indicators with their peer cities to learn from each other. 

Why did Janaagraha see the need for a portal such as City Finance?

Janaagraha works towards improving the quality of life in India’s cities and towns. Indian cities are facing severe constraints in terms of limited ULB revenues, suboptimal institutional capacities and lack of transparency and accountability. Over the next two decades, India’s cities require 1 trillion USD to fund infrastructure and public services. The combined revenues of all municipalities in India presently adds up to not more than Rs 100,000-120,000 crores (c. USD 20 billion). Therefore, cities need to raise large sums of capital. Moreover, to achieve targeted outputs and outcomes in terms of infrastructure and public services, they will need to manage their income and expenditure finances prudently.

Currently, information on the performance of ULBs is available with government offices as non-friendly, pdf/scanned documents. Many times, these digitised documents are illegible. We, at Janaagraha felt that there is a need to put all the information in one place. Janaagraha has conceptualised this portal as an attempt to address some of these constraints in a phased manner. The aim of this portal is providing information on the financial and operational aspects of ULBs across India on a single platform. 

What will a portal such as City Finance achieve? 

cityfinance.in empowers its users by gathering complex amounts of financial and non-financial data, extracting valuable information, summarising the data and presenting it in a user-friendly manner. This portal is accessible to all, and all the information is in the public domain. The portal will democratise the availability and use of the financial reports which to date were either present in files or websites of individual ULBs.  

This portal will assist cities in raising market finance, access best practices in revenue enhancement, credit rating & municipal borrowings and imparting and increasing the knowledge of the municipal staff. Provision of credible information on funds and planned infrastructure projects will ease investment decisions for investors, thus increasing the flow of capital in the creation of civic infrastructure. 

What are the factors that were taken into consideration while building the portal? 

The primary users of this portal are - officials from urban development departments & municipal bodies, credit rating agencies, investors, project consultants, public finance professionals, academics & researchers and citizens. The portal is designed to meet the requirements of its primary users. The use of a variety of visual elements and tools such as interactive maps, charts, and graphs simplifies the information, thus making the data understandable to a broader audience. We are also planning to add different levels of details explaining critical financial concepts so that everyone can absorb information quickly.  ULBs in India present their financial statement in a wide variety of formats (depending on the accounting manual they follow). Therefore standardising the financial statements to enable comparability was also one of the most important considerations. For facilitating comparability and benchmarking, we have standardised the Income and Expenditure statements and Balance sheets of ULBs in a format that is compatible with the National Municipal Accounting Manual. 

How did the team go about gathering the data? 

The team has gone to extraordinary lengths for gathering and processing the data that is available on cityfinance.in. MoHUA has helped a lot by reaching out to different states for providing us with the data over email. When we received the data from the ULBs, we realised that many of the financial statements are incomplete. Keeping this in mind, we sorted the financial statements in different grades based  on the quality. Moreover, the financial statements provided by the ULBs were in scanned or in pdf format. The team digitised every single pdf into an excel format for making them computer friendly. We have hosted the complete and accurate financial statements on the portal. 

We feel, going forward, ULBs need to start providing financial statements in excel format, thus making our process faster and easier. However, we would emphasise the need for adopting data standardisation for financial reporting of ULBs. Adopting  data standardisation will make it easier for users to understand the financial statements from ULBs across India. It will also save a lot of time that analysts spend trying to understand state-specific municipal laws/ manual for making sense of financial statements. 

What kind of information can citizens avail? 

Janaagarha believes that the quality of citizenship, nature and extent of citizen participation in their neighbourhoods is an essential determinant of the quality of life in Indian cities and towns. Active citizens and an organised civil society can vigilantly exercise oversight and hold their municipalities accountable. Cityfinance.in aims to promote transparency and citizen engagement through the visualisation and ‘demystification’ of information on  municipal finances. Citizens can compare the performance of their municipalities with that of peers and put pressure on their elected representatives for improvement. We also plan to put budgets of ULBs on the portal in a user-friendly way. Citizens can track the budget proposal & progress in the future to better understand the utilisation of the taxes paid by them.

Do you envision this portal becoming much more significant than it seems now? If yes, what are the plans? 

As of now, cityfinance.in has been launched with few limited features. We have planned an ambitious roadmap for cityfinance. Besides financial parameters, we plan to add operational indicators like service level benchmarks for presenting an integrated picture on the performance of ULBs. We envision cityfinance as a vibrant marketplace of information on finances, infrastructure projects and their status, tenders, audit reports, performance MIS, property tax MIS, data standards and learning solutions for municipal staff. The portal will have tools for automating administration of the 15^th finance commission grant. This portal will ultimately bring cities, citizens and investors’ closer, thus facilitating private investment and improved delivery of services.