SYLLABUS

GS-1: Urbanization, their problems and their remedies. 

GS-2: Important Aspects of Governance; Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation. 

Context: NITI Aayog recently released a comprehensive report titled “Moving Towards Effective City Government – A Framework for Million-Plus Cities”, highlighting the urgent need for urban governance reforms in India’s largest cities. 

More on the News

• The report assumes significance as India aims to achieve the vision of Viksit Bharat by 2047 and progress towards a $30 trillion economy, with cities expected to contribute nearly 70% of GDP. 

• It focuses on million-plus cities, which are emerging as hubs of economic activity, innovation, and employment generation, but are constrained by weak governance structures.

• Million-plus cities in India are urban areas or aggregations (UAs) with a population exceeding 1 million (10 lakh). 

Rationale Behind the Report

• India is undergoing rapid urbanisation, with the urban population projected to exceed 600 million by 2036, placing immense pressure on infrastructure and service delivery. 

• However, urban governance remains constrained by: 

• Fragmented institutional structures, with multiple agencies exercising overlapping functions 
• Dominance of parastatal agencies (state-controlled bodies such as development authorities like DDA, and utilities like Water/Sewerage Boards), which often bypass elected municipal bodies 
• Limited functional, financial, and administrative devolution to Urban Local Bodies (ULBs)

• These challenges prevent cities from functioning as efficient service providers and engines of growth, necessitating systemic reforms.

Key Findings of the Report

• The report highlights that Indian cities are characterised by weak and diffused leadership, where mayors often have limited executive authority. 

• Governance is fragmented among municipal corporations, parastatal agencies, and state departments, leading to duplication of roles and inefficiencies. 

• Urban Local Bodies remain financially constrained, with low own-source revenues and heavy dependence on state and central transfers. 

• There are significant capacity deficits in urban planning, data systems, and project execution, limiting the ability of cities to respond to complex urban challenges. 

• Consequently, Indian cities are unable to function as effective engines of growth and service delivery, despite their economic importance.

Key Recommendations

• Empowered City Governments: The report recommends establishing clearly defined, empowered city governments with unified authority over planning, service delivery, and infrastructure. 

• Directly Elected Mayors: It advocates for directly elected mayors with fixed tenure and executive powers, ensuring strong leadership and accountability at the city level. 

• Rationalisation of Parastatal Agencies: The report calls for integration or alignment of parastatal agencies with municipal governments, reducing fragmentation and improving coordination. 

• Fiscal Empowerment of ULBs: Strengthening municipal finances through enhanced property tax systems, user charges, and predictable fiscal transfers is emphasised. 

• Capacity Building and Professionalisation: It highlights the need for skilled urban cadres, technical expertise, and institutional strengthening to improve governance outcomes. 

• Data-Driven Urban Governance: Promotes adoption of digital platforms, real-time data systems, and evidence-based planning for efficient decision-making. 

Significance of the Report

• Urban Growth as Economic Driver: Effective city governance is critical for India’s transition towards a $30 trillion economy, as cities will be central to productivity and investment. 

• Improved Service Delivery: Strengthened governance can ensure better provision of urban services such as water supply, waste management, housing, and mobility. 

• Strengthening Democratic Decentralisation: The recommendations reinforce the spirit of the 74th Constitutional Amendment, promoting genuine devolution to urban local bodies. 

• Enhancing Global Competitiveness: Well-governed cities can attract investment, innovation, and global value chains, improving India’s position in the global economy.