The assignment involved development of Model Municipal Finance Code (MMFC), a compilation of principles governing financial management in urban local governments in India.
MaGC Approach and Methodology
The methodology involved a comparative analysis of the existing guidance framework governing municipal financial management in ten Indian States. The study findings and recommendations from think-tanks governed the structure of the Code. The actual process of developing the Code followed a participative approach and involved inputs from experts. The Municipal Finance Code was developed on the principle of ‘Apply or Explain’ so as to provide flexibility to state governments in its adoption.
The MMFC was a first-of-its-kind attempt at bringing out a set of principles to govern municipal finance at the national level. The Code consists of Main Principles followed by Detailed Provisions. It is expected to enable State Governments in India to modify their existing guidance frameworks and implement good practices in accounting, budgeting, audit, and overall fiscal management in the municipal sector.
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