Exploring Potential of Public Land Based Revenues to Finance City Infrastructure: An assessment using linear programming for Guntur Municipal Corporation

Abstract

Municipalities are in search of exploring alternative own revenues to finance urban infrastructure investments in India. As compared to others, monetization of public land is within the functional domain of local governments subject to certain constraints. This study employs a linear programming model incorporating the constraints enforced by state government to assess the potentials of public lands for urban infrastructure capital investments. This approach is largely different from the existing literature, which does not determine the capacity of municipal public lands based on realized revenues. This investigation finds that certain proposed leasing strategies for Guntur Municipality under different simulations as done in this research have potentials to realize 240% more revenues compared to ‘business as usual’ scenario and hence, provide new policy insights for leasing public lands in a revenue optimization perspective. The framework adopted by this helps local governments to estimate the potentials of public lands and establish revenue targets.