Discuss the institutional and fiscal barriers to localizing NDCs in India. How can multilevel climate finance be institutionalised for urban local bodies?

Localizing NDCs means turning India's national Paris pledge into city-level climate plans and budgets. The Delhi Declaration 2026, adopted by Global South cities ahead of COP31, asks for exactly this. It also asks for climate finance that reaches cities, and for cities that are able to absorb it [1]. In India, both institutions and money stand in the way.

Institutional barriers

• Incomplete devolution: The 15th Finance Commission study found that the constitutional provisions for devolution are weak, and some have not been implemented [2]. Many functions under the 74th Amendment remain with state agencies.
• No city voice in NDC-making: The NDC is drafted at the national level. ULBs have no formal channel to shape targets they are later expected to deliver.
• State control of levers: State governments usually fix property-tax rates and their revision, so a mayor cannot raise funds on their own.
• Weak capacity and accounts: ULBs do not separate revenue and capital spending [2]. Few have the staff to prepare bankable projects.

Fiscal barriers

• Tiny revenue base: Municipal own revenue was only 0.43% of GDP (2017-18), and total municipal revenue has stayed near 1% of GDP for over a decade [2].
• Stagnation: Revenue receipts of municipal corporations were 0.6% of GDP in 2023-24, unchanged since 2019-20. Municipal borrowing is below 0.05% of GDP [3].
• Small-city dependence: Small cities raise about 29% of their revenue themselves, against 69% for metros [4]. Without that revenue they cannot repay loans or pay their share of project costs.

Institutionalising multilevel climate finance

• Strengthen own revenue: Link state grants to property-tax reform through GIS mapping, digital payments and regular rate revision [3].
• Scale market finance: Ghaziabad raised ₹150 crore through India's first certified green municipal bond, for a tertiary sewage plant [5]. AMRUT 2.0 pays ₹13 crore per ₹100 crore of bonds issued, up to ₹26 crore, plus a separate green-bond incentive [6]. So far ₹377.33 crore has been released [7].
• Pooled bonds for small cities, so that the bond route does not favour only metros.
• Project-preparation funds: The World Bank–EIB City Climate Finance Gap Fund (2020) pays for early-stage project preparation [8]. India can press at COP31 for such funds to grow.
• City share in the NDC: Set subnational finance targets inside the NDC, with ULBs represented in state climate cells.

Localizing NDCs is mainly a fiscal federalism problem: cities are responsible for delivery but control little money. The fix is strong ULB finances, graded market access and preparation support, all within the national NDC. This would give real effect to the 74th Amendment and advance SDG 11 and SDG 13, so the Declaration supports national climate action rather than competing with it.