New Delhi – Comptroller and Auditor General (CAG), K Sanjay Murthy, on Thursday called for stronger financial management in urban local governments (ULGs) as his office began work on revising the two-decade-old National Municipal Accounts Manual (NMAM).
Speaking at a national workshop in New Delhi, Murthy said that while cities are central to India‘s economic growth, weak urban infrastructure and outdated accounting practices remain major hurdles.
“Fifteen cities contribute 30% of the GDP of India… urban areas, though home to one-third of the population, contribute over two-thirds of the country’s GDP, expected to rise to 75% by 2030,” he said, adding that strong local governments were essential if India is to meet its development goals.
The workshop, convened by the International Centre for Audit of Local Governance (iCAL) in partnership with the Janaagraha Centre for Citizenship and Democracy, brought together officials from the Ministry of Housing and Urban Affairs, the Finance Commission, the World Bank, municipal finance officers and public finance experts.
India has nearly 5,000 ULGs managing resources worth ₹5.5–6 lakh crore, but municipal accounting has been governed largely by NMAM 2004, which experts said was unevenly implemented and has not kept pace with digital advances.
Financial statements of most ULGs are now published on the government’s CityFinance portal, but they often lag by two years and fall short on quality standards. Budgeting systems are described as weaker still.
Murthy urged participants to frame solutions that are “ambitious, yet grounded in practical realities,” stressing that NMAM 2.0 should enable cities to generate timely, reliable and comparable financial data.
The CAG’s office noted that reforms would need to align with ongoing digital initiatives such as the National Urban Digital Mission’s UPYOG stack, which provides citizens access to services like property tax, trade licences and building plan approvals.
Srikanth Viswanathan, CEO, Janaagraha, said public finance reform in cities was essential for “ease of living and ease of doing business” and that credible reporting would allow data-driven decision making.
The workshop marked the start of a time-bound effort to design NMAM 2.0, with implementation expected to involve state-level engagement, pilots and capacity building.
The CAG’s office said the success of the exercise would depend on whether cities can adopt digital-first accounting systems within the next three to five years to support evidence-based urban governance.
