<p>Bengaluru: Despite constitutional backing for decentralisation, urban local bodies in <a href="https://www.deccanherald.com/tags/karnataka">Karnataka</a> continue to face funds crunch, with elected representatives flagging shrinking funds amid rapid urbanisation.</p>.<p>Recently, during a Budget workshop for legislators, Melukote MLA Darshan Puttanaiah raised concerns over inadequate funding, pointing to crumbling infrastructure and weak revenue streams in both rural and urban local bodies. He noted that despite rapid urbanisation, allocations have not exceeded 7% of the state Budget.</p>.<p>Responding to this, Chief Minister Siddaramaiah said the 5th State Finance Commission (SFC) had recommended a 48% share in devolution to local bodies, which the state enhanced to 50%. However, representatives argue that this has not translated into sufficient funds on the ground.</p>.<p>While Karnataka has devolved powers and functions, it must ensure adequate funds and functionaries to support them, noted the 5th State Finance Commission report (2026–30).</p>.<p>Urban local bodies are under increasing pressure, with the urban population rising from 38.67% in 2011 to an estimated 44.4% in 2023. Despite driving economic growth, cities face revenue gaps, heavy reliance on grants, and limited access to borrowing.</p>.Fix finances to fix Bengaluru.<p>Data from the SFC shows that the share of Local Self Governments (LSGs) has increased from 36% in the first SFC to 50% in the 5th SFC (56.7% including Anna Bhagya and Gruha Lakshmi components).</p>.<p>Out of the state’s non-loan net own revenue receipts (NLNORR) of Rs 99,371 crore in 2018, rural LSGs received Rs 38,796 crore (39%) and urban LSGs Rs 11,210 crore (11.3%). In 2024–25, out of Rs 1.82 lakh crore, RLSGs got Rs 69,483 crore (38%) and ULSGs Rs 14,748 crore (8.09%).</p>.<p>The total devolution to LSGs in 2025–26 was Rs 1,08,799 crore (56.7%) including guarantee schemes, but stands at 40% without them, which is against the accepted share of 48%. </p>.<p>While the rural share rose from 39% in 2018 to 49.3% in 2026, the urban share dipped from 11.3% to 7.36%.</p>.<p>Karnataka has 317 ULSGs — city corporations (18 including five under GBA), CMC (58), TMC (126) and town panchayats (115) and a majority face widening disparities due to fund crunch and vacancies (40-55%).</p>.<p>While property tax collections is low due to incomplete records and undervaluation, the state government is exploring ways to augment revenue through use of 3D drone technology for property mapping, assessment and engaging self help groups for tax collection (with a 5% incentive) and automated alerts for new property registrations.</p>.<p>It is planning to levy of professional tax, advertisement fees, sanitation and solid waste management charges, parking fees and a share in state GST to ULSGs, besides compulsory metering of water supply system (77% of ULSGs have less than 50% of water connections metered).</p>
<p>Bengaluru: Despite constitutional backing for decentralisation, urban local bodies in <a href="https://www.deccanherald.com/tags/karnataka">Karnataka</a> continue to face funds crunch, with elected representatives flagging shrinking funds amid rapid urbanisation.</p>.<p>Recently, during a Budget workshop for legislators, Melukote MLA Darshan Puttanaiah raised concerns over inadequate funding, pointing to crumbling infrastructure and weak revenue streams in both rural and urban local bodies. He noted that despite rapid urbanisation, allocations have not exceeded 7% of the state Budget.</p>.<p>Responding to this, Chief Minister Siddaramaiah said the 5th State Finance Commission (SFC) had recommended a 48% share in devolution to local bodies, which the state enhanced to 50%. However, representatives argue that this has not translated into sufficient funds on the ground.</p>.<p>While Karnataka has devolved powers and functions, it must ensure adequate funds and functionaries to support them, noted the 5th State Finance Commission report (2026–30).</p>.<p>Urban local bodies are under increasing pressure, with the urban population rising from 38.67% in 2011 to an estimated 44.4% in 2023. Despite driving economic growth, cities face revenue gaps, heavy reliance on grants, and limited access to borrowing.</p>.Fix finances to fix Bengaluru.<p>Data from the SFC shows that the share of Local Self Governments (LSGs) has increased from 36% in the first SFC to 50% in the 5th SFC (56.7% including Anna Bhagya and Gruha Lakshmi components).</p>.<p>Out of the state’s non-loan net own revenue receipts (NLNORR) of Rs 99,371 crore in 2018, rural LSGs received Rs 38,796 crore (39%) and urban LSGs Rs 11,210 crore (11.3%). In 2024–25, out of Rs 1.82 lakh crore, RLSGs got Rs 69,483 crore (38%) and ULSGs Rs 14,748 crore (8.09%).</p>.<p>The total devolution to LSGs in 2025–26 was Rs 1,08,799 crore (56.7%) including guarantee schemes, but stands at 40% without them, which is against the accepted share of 48%. </p>.<p>While the rural share rose from 39% in 2018 to 49.3% in 2026, the urban share dipped from 11.3% to 7.36%.</p>.<p>Karnataka has 317 ULSGs — city corporations (18 including five under GBA), CMC (58), TMC (126) and town panchayats (115) and a majority face widening disparities due to fund crunch and vacancies (40-55%).</p>.<p>While property tax collections is low due to incomplete records and undervaluation, the state government is exploring ways to augment revenue through use of 3D drone technology for property mapping, assessment and engaging self help groups for tax collection (with a 5% incentive) and automated alerts for new property registrations.</p>.<p>It is planning to levy of professional tax, advertisement fees, sanitation and solid waste management charges, parking fees and a share in state GST to ULSGs, besides compulsory metering of water supply system (77% of ULSGs have less than 50% of water connections metered).</p>