Municipalities in the small and medium towns are facing fiscal stress because of their inability to raise resources for upgrading civic services and also because state governments are encroaching upon their levies, according to a study on municipal body finances. Discontinuation of Octroi in many states, inefficient use of land, poor cost recovery and a defective pricing system and in efficient accounting and financial system had a "crippling effect" on the municipal finance, said a study conducted by Participatory Research in Asia(PRIA).