Urban Infra Quality Key to Economic Growth: CAG Murthy

Rajkot, Sep 18 (PTI) CAG of India K Sanjay Murthy has stressed on addressing the inadequate and poor quality of urban infrastructure and services to reap the full economic potential of urbanisation and achieve Viksit Bharat by 2047.

He was addressing the National Workshop on Strengthening Financial Management in Urban Local Governments (ULGs) through National Municipal Accounts Manual (NMAM) 2.0.

The workshop marked the formal launch of efforts to strengthen the municipal financial management framework through revision of the National Municipal Accounting Manual, the CAG office said in a release.

Murthy informed that 15 cities contribute 30 per cent of the GDP of India.

He said India's economic progress is increasingly tied to urbanisation. Urban areas, though home to one-third of the population, contribute over two-thirds of the country's GDP, expected to rise to 75 per cent by 2030.

"However, if we are to reap the full economic potential of urbanisation and achieve Viksit Bharat by 2047, we need to address the inadequate and poor quality of urban infrastructure and services," Murthy said.

Most economies that have graduated to developed status, including China that is fast moving towards it, have done so through the economic growth generated in and by cities, catalysed in turn by strong local governments, he said in his opening remarks at the workshop on Tuesday.

There are nearly 5,000 urban local governments hosting about 35% of the country's population. As per UN's World Urbanisation Prospects, this is expected to rise to 41 per cent by 2031.

The workshop was convened by the International Centre for Audit of Local Governance (iCAL) of the Comptroller and Auditor General (CAG) of India, in partnership with the Janaagraha Centre for Citizenship and Democracy (JCCD).

Urban Local Governments (ULGs) are the first-mile providers of essential services and enablers of economic development.

The ULGs manage a resource envelope of Rs 5.5 to 6 lakh crore and robust accounting systems are essential to ensure effective management to ensure the delivery of services and provision of infrastructure in India's cities, it added.

Current accounting systems for urban local bodies are largely modelled on the National Municipal Accounts Manual (NMAM), which was drafted in 2004, but its implementation is patchy.

Srikanth Viswanathan, CEO, Janaagraha, said reforms to public finance management in India's cities are a key enabler of ease of living and ease of doing business.

"At its heart is timely, credible, standardised financial and performance reporting. While www.cityfinance.in has achieved historic success in publishing audited annual accounts of over 4,000 cities, much more needs to be done for data-driven decision making," he said.

The workshop with CAG of India, MoHUA, 16th Finance Commission, ICAI, World Bank and others is the first step in a time-bound effort to usher in a fully digital, place-based financial management policy for India's cities, Viswanathan added.

The day-long workshop saw participation from over 50 senior stakeholders representing senior officials from the CAG, Ministry of Housing & Urban Affairs, 16th Finance Commission, World Bank, Principal Accountant Generals, municipal finance officers, public finance experts/practitioners and senior officials of CAG..