Insolvency law for civic bodies...

THE GOVERNMENT HAS been vocal about the need for ULBs to undertake massive capital expenditure.

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However, most of them continue to face fiscal stress, despite the efforts of the Finance Commissions to buttress their revenues by way of direct transfers from the Cen-tre.A proposal to allocate a portion of GST proceeds directly to local bodies has not materi-alised yet.

Experts said that limited sources of income and high expenditure on revenue items such as salaries have deteriorated the finances of most municipalities over the years. Also, with the GST subsuming many levies, local bodies had to let go of their tax revenue streams like octroi, local body tax, entry tax, and advertisement tax.