Stage 6 Finance and Economics

Mobilisation of Funds

Once agency activities have been decided, each agency would have to prepare a fund mobilization plan for:

  • Activities which are not likely to generate revenue
  • Activities which would have a revenue stream or could be sponsored.
  • Activities which would require capital investment but would generate substantial revenue.

Activities which are not likely to generate revenue: Funds for these would have to come either from the surpluses of the city governments or be allocated by the state government or the Union for city development. Innovative methods could also be used to convert benefits into revenue in the long run. This could be in the form of a cess on the property tax levied by the city government for road improvements or levy of a betterment tax on areas around improved infrastructure. If this is done the city government or the development authority may be able to raise resources through financial institutions/banks.

Activities which would have a revenue stream or could be sponsored: These activities can generate immediate revenue streams. For example, construction of bus shelters can provide revenue in the form of advertising. If planned properly and in coordination with the bus operating companies, this could even be profitable. It is also possible to get sponsors for these works.

Activities which would require capital investment but would generate substantial revenue: It may not be necessary to invest public funds for this purpose as this activity generates a cashflow, which if managed properly could be used to fund the initial investment. Once again, innovative mechanisms like escrow accounts, leasing/hiring of buses etc. could be used.

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