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It is encouraging to see these developments in Srilanka. In India (both in rural and urban contexts) I see financial sustainability of local governments as the biggest challenge. Despite clear evidence of capacity to pay, for some reason, there is a strong reluctance on the part of the local (both rural and urban) leaders to ask citizens (principally the better off citizens) to pay property taxes and user charges for basic services. The culture seems to be to keep relying on transfers from the higher levels of government. Both levels of government seem very comfortable with this -- the high levels of government like the dependency that it creates and the local bodies then do not feel the need to ask their own citizens for money lest they be held accountable for delivery of services against them. The transfers received are much smaller in quantum than what the city could collect on its own and consequentlywe continue to see filthy villages and filthy cities right in the midst of obvious signs of prosperity. We seem to have settled into this suboptimal equilibrium and it is not obvious what will shake us out of it.