ABSTRACT
Decline of urban local self-government (ULSG) and diminution in its institutional capacity after India achieved Independence led to thinking for its strengthening and for bringing about improvement in the performance of ULSG institutions through decentralization. As the urban local self-governments became constitutional entities through an amendment of the Constitution in 1992, the Constitution Review Commission also examined and reviewed constitutional provisions for them. The expectations ran high that it will refurbish the whole system of urban local self-governance by implanting a new structure of municipal government with additional devolution of functions, planning responsibilities, new system of fiscal transfers and empowerment of women. Fiscal decentralization, in a way, is part of political decentralization and involves devolution of powers and authority for raising resources and revenue generation. The 74th Constitution Amendment Act does not contain provisions for devolving specific sources of revenue to the urban local self-governments.
