Analysis of Financial Performance of Municipal Corporation, Chandigarh

Abstract

This research study analyzes the financial performance of the Municipal Corporation of Chandigarh (MCC) based on the Municipal Performance Index 2019 and focusing on income management, spending management, fiscal decentralization, and fiscal responsibility. The study's foundation is secondary data gathered from MCC's 2016–2018 profit and loss statements and annual budgets. The results show that MCC's lack of planning and consistency in its revenue and expenditure management results in budget deficits. While capital expenditure per capita has been dropping, indicating an imbalance between population growth and infrastructure investment, the ratio of own revenue to total revenue has been rising, indicating healthy financial growth. The research paper also points out problems with fiscal decentralization, most notably how transparency and public confidence are weakened by the public's inability to view audited accounts. MCC has a BBB credit rating, but its financial flexibility is limited because it hasn't issued any new bonds. According to the study, MCC can raise its credit rating by selling bonds, publishing audited financial statements, improving budget planning, allowing the public to participate in the budgeting process, and implementing a unified accounting system. The analysis is restricted to information from 2016 to 2018 and concentrates only on the Municipal Performance Index's financial component. The report emphasizes how crucial sound financial management is to local administration and how this affects Indian municipal corporations' overall success.