The Constitution (72nd Amendment) Act, 1992, prescribes two new institutions to regulate the flow of funding to municipalities. One new institution is the Central Finance Commission, which both suggests new taxation and financial policies that the states can apply to the municipalities under their sway, but under the new arrangements since 1992, the Governor of a state is required set up a finance commission to review the local system, to propose new taxes, and to govern grants in aid to municipalities from the consolidated funds of the state.37 in spite of these constitutional requirements, results have been limited. With only 1.1 percent of GDP, municipal expenditures in India compare very unfavourably with OECD countries, but even with other BRICS countries such as Brazil, Russia and South Africa.