Over the past decade, the Government of India has made a considerable investment in urban infrastructure, with a special emphasis on sanitation, under various national programs. To translate these investments into sustainable service delivery enhancements that can reach the ULB-level, efforts are needed to develop robust mechanisms to manage fiscal resources that can reliably account for expenditures required for quality inclusive Sanitation services and infrastructure.

ULBs in India tend to continue to derive their functional and financial powers from state governments, despite the 74th Constitutional Amendment Act recognizing municipalities as the third sphere of government. There is a paucity of provisions for appropriate fiscal decentralization, due to which ULB governments lack functional autonomy, and may be unable to benefit from the economic growth of their cities, which in turn adversely affects planning and financing for sanitation projects in these cities.