NEWS: A report by Janaagraha – Centre for Citizenship and Democracy states that Karnataka ranks last among comparable States in per capita urban grants from the State Finance Commission (SFC), despite rapid urbanisation.

Key Highlights

• Karnataka's per capita urban grant for 2026–27 is ₹2,244, much lower than:
  • Tamil Nadu – ₹23,157
  • Odisha – ₹24,293
  • Kerala – ₹16,251
  • Urban grants to major cities such as Mysuru, Hubballi-Dharwad, Mangaluru, Davanagere, and Kalaburagi have declined by over 90% since 2014–15.
• Karnataka has 46% urban population, projected to exceed 51% by 2036.

Major Concerns

• Inadequate fiscal devolution to Urban Local Bodies (ULBs).
• Delay in municipal elections, especially in Bengaluru, affecting democratic decentralisation.
• Poor funding impacts urban services such as roads, drainage, water supply, and waste management.
• Karnataka has not fully implemented State Finance Commission (SFC) recommendations.

Significance

• Highlights the need for stronger fiscal decentralisation under the 73rd & 74th Constitutional Amendments.
• Adequate funding is essential for effective urban governance and achieving sustainable urban development.