Title: From Nirbhar to Atmanirbhar: A Comparative Assessment of Outsourced Municipal Revenue Sharing Model and its Impact on EBIDA Growth and Operating Surplus in Jharkhand’s Cities
The primary challenge for any state is to enhance governance by harnessing the potential of municipal management and adopting best practices. The Urban Development and Housing Department (UD&HD) of the Government of Jharkhand (GoJ) initially confronted this challenge to make cities self-sufficient and drivers of growth towards Atmanirbharata. To tackle this, GoJ introduced a municipal revenue-sharing model in partnership with a Project Management Unit (PMU) at the state level. This paper assesses the impact of interventions by the Urban Development & Housing Department (UD&HD) to enhance the Atmanirbharata of Jharkhand's cities and their access to capital markets. The focus is on enabling these cities to fully cover their revenue expenses through self-generated operational income, leading to positive operating surpluses and Earnings Before Interest, Depreciation, and Amortisation (EBIDA) . Sample data from the income and expenditure of 49 cities of Jharkhand classified among two categories as corporations and municipalities including Municipal Council and Nagar panchayat from 2016-17 to 2023-24 have been utilised to assess operating surpluses and EBIDA. Additionally, percentage change is analysed for financial statements to evaluate the impact of these interventions on trends in self-generated operational income and revenue expenses. Examining the financial statements and reports from the 15th and 16th Finance Commissions indicates that the outsourcing model has contributed to an increase in the cities' own revenue in Jharkhand, resulting in an improved operating surplus. This growth is due to the outsourcing of revenue assessment and collection, which has had a positive impact on EBIDA and operating surplus, thereby enhancing the interest coverage ratio. The study offers significant theoretical and managerial policy implications with discussions on the challenges faced, limitations of the study and directions for future research.
