What is the primary focus of municipal finance in India?

Managing federal government finances

Local government budgeting and expenditure decisions

International trade and economic relations

What is the significance of urban areas in terms of India's economic growth and population share?

Urban areas have minimal impact on India's economy

Urban areas contribute significantly to economic growth and have a large population share

Urban areas only focus on cultural and historical preservation

Urban areas are predominantly rural and have limited economic activities

What does the term "buoyancy" refer to in the context of municipal finance?

The ability of a local government to handle international trade

The extent to which municipal revenues fluctuate with economic conditions

The level of transparency in local government financial management

The legal constraints on municipal borrowing

What is the primary source of revenue for rural local governments in India?

Intergovernmental transfers from the central government

What is the significance of the "Zakaria norms" in the context of municipal finance?

They define the maximum tax rates for property taxes

They provide guidelines for municipal borrowing

They outline the assumed physical standards for urban services

They determine the revenue-sharing mechanism between states and local governments

What is the primary challenge associated with octroi, as discussed in the text?

It leads to corruption at checkposts

It is too expensive to administer

It results in too much revenue for local governments

What is the primary reason for the surplus budgets often observed in local governments?

Local governments deliberately set high taxes

They receive substantial grants from the central government

They underutilize their revenue for services

They engage in excessive borrowing

What is the significance of a "business property tax" in the context of local government revenues?

It is a progressive tax imposed on individuals

It is used to fund national infrastructure projects

It is a potential substitute for octroi

It is a consumption tax on luxury goods

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