ESTABLISHING DESIGNED FINANCIAL CONTROL: AN EMPIRICAL STUDY ON URBAN LOCAL BODIES IN INDIA USING FACTOR AND CLUSTER ANALYSIS

We have established in earlier study that our designed financial controls help the Indian ULBs (Urban Local Bodies) to increase recurrent surplus. Our further research, as described in this paper, reveals that the concept of designed controls conforms to the result of statistical techniques used. Nonparametric tests applied on the dataset allow us to proceed for application of multivariate techniques. Factor analysis divides the variables of revenue income and expenditure into two factors which are in conformity with the conceptual framework of the designed financial control. Regression analysis indicates strong association of financial controls (taking factor score as dependent variable) with the constituent variables (independent variables) and also of total revenues and total expenditure (dependent variable) with both the financial controls (taking factor scores as independent variables). We have also used cluster analysis approach to strengthen our views and result of this analysis agrees with the result of factor analysis.