Urban Governance Reforms for Viksit Bharat 2047 | 23 Jan 2026

India's urban centers remain trapped in a colonial governance framework where bureaucrats wield power over budgets larger than entire states, while elected mayors serve ceremonial roles. The result is stark: millions in cities like Mumbai endure conditions rivaling war zones, lacking basic housing, clean water, and electricity, while governance failures persist across all Indian metropolises. Despite rhetoric about becoming 'Viksit' by 2047, the fundamental disconnect between administrative structure and accountability has left urban India without meaningful municipal governance. 

What is the Current Urban Governance Framework in India? 

• Constitutional Foundation-The 74th Amendment Act (1992) 
  • This Act gave urban local bodies (ULBs) constitutional status, moving India from a two-tier (Center-State) to a three-tier governance model. It added Part IX-A and the Twelfth Schedule to the Constitution. 
  • Three-Tier Structure: 
    • Nagar Panchayat: For areas in transition from rural to urban. 
    • Municipal Council: For smaller urban areas. 
    • Municipal Corporation: For larger urban areas. 
  • Devolution of Power (12th Schedule): Identifies 18 functional items for ULBs, including urban planning, land use regulation, water supply, public health, and slum improvement. 
  • Mandatory Institutions: 
    • State Election Commissions: To conduct regular municipal elections. 
    • State Finance Commissions (SFCs): To recommend the sharing of taxes between the State and ULBs. 
    • District & Metropolitan Planning Committees (DPCs/MPCs): To consolidate plans from rural (Panchayats) and urban bodies into a holistic development plan. 
• Institutional Architecture 
  • Despite the constitutional mandate, the actual administrative power is often shared (or contested) between elected officials and bureaucratic appointees. 
  • The Executive Structure: 
    • Commissioner System: In most Municipal Corporations, executive power lies with a State-appointed bureaucrat (Municipal Commissioner), while the Mayor is often a ceremonial head with limited powers. 
    • Mayor-in-Council: A few states (e.g., West Bengal) have experimented with a system where the Mayor has executive authority similar to a Chief Minister. 
  • Parastatal Agencies: A major feature of Indian urban governance is the presence of state-controlled "Parastatals" (e.g., Development Authorities like DDA/BDA, Water Supply Boards).  
    • These agencies often take over key functions (planning, water, transport) from the ULBs, leading to a fragmentation of accountability. 
  • Special Purpose Vehicles (SPVs): Introduced largely by the Smart Cities Mission, these are corporate bodies created to execute specific projects, bypassing some traditional municipal bureaucracy to ensure faster implementation. 
• Programmatic Framework (Key Missions) 
  • The central government drives urban reform largely through "Centrally Sponsored Schemes" that link funding to specific governance reforms. 
  • AMRUT 2.0 (Atal Mission for Rejuvenation and Urban Transformation): Focuses on water security. It aims to provide universal coverage of water supply and make cities "water secure" through a circular economy of water. 
  • Swachh Bharat Mission - Urban (SBM-U) 2.0: Focuses on "Garbage Free Cities," encompassing solid waste management, remediation of legacy dumpsites, and used water management. 
  • Smart Cities Mission: Having largely concluded its funding phase (March 2025), this mission institutionalized the use of Integrated Command and Control Centres (ICCCs) for data-driven city management and introduced the SPV model mentioned above. 
  • Pradhan Mantri Awas Yojana - Urban (PMAY-U): Focuses on providing all-weather pucca houses to all eligible beneficiaries, often using a "beneficiary-led construction" model. 
• Recent Fiscal Developments 
  • Fifteenth Finance Commission: Grants to ULBs are now often tied to performance reforms. 
  • Urban Infrastructure Development Fund (UIDF): Managed by the National Housing Bank, this fund is designed to create urban infrastructure in Tier-2 and Tier-3 cities, supplementing the resources of smaller ULBs. 
• Emerging Reforms in Urban Governance 
  • Greater Bengaluru Authority: An attempt to consolidate fragmented service delivery agencies under one roof to optimize scarce resources. 
  • WATCO (Water Corporation of Odisha): A state-owned, not-for-profit company acting as a prime example of a specialized, modern utility provider for urban water supply, sewerage. 
  • National Urban Policy Framework (NUPF):  It provides a strategic, holistic guide for States to manage rapid urbanization. 

What are the Key Issues Associated with India's Urban Governance? 

• Fiscal Feebleness & Structural Dependency: The Constitution of India specifies the taxes to be divided between the central and state governments but it does not specify the revenue base for ULBs.  
  • Indian municipalities are functionally crippled by a lack of financial autonomy, relying heavily on discretionary grants rather than "own-source" revenue like property tax.  
  • This "fiscal infantilism" prevents long-term infrastructure investment, forcing cities to look to the Centre or State for even basic operational costs, eroding the very spirit of the 74th Amendment's decentralization mandate.  
  • For more than a decade, municipal revenues and expenditures have stagnated at about 1% of the GDP in India.  
• The "Parastatal" Trap & Institutional Fragmentation: Governance is paralyzed by a multiplicity of agencies (SPVs, Development Authorities) that bypass elected Urban Local Bodies (ULBs).  
  • State-controlled "Parastatals" take over lucrative functions like land use and transport, leaving ULBs with low-revenue tasks (garbage/slums), creating a "responsibility without power" syndrome where accountability dissolves in the gaps between agencies.  
    • The fatal accident of techie in Noida (January 2026), after his car plunged into an unbarricaded, water-filled pit, starkly highlights this governance vacuum. 
    • Despite warnings since 2015 and a joint inspection as recently as October 2023, the hazard remained unaddressed due to institutional apathy. 
  • For instance, CAG Audit (2024) across 18 states noted that only 4 of 18 functions (12th Schedule) are truly autonomous.  
• The "Ceremonial Mayor" & Bureaucratic Hegemony: The Indian Mayor is largely a figurehead with no executive authority, while real power resides with the state-appointed Municipal Commissioner.  
  • This disconnect breaks the democratic feedback loop; the person accountable to the voters (Mayor) cannot fire or direct the official who executes the work (Commissioner), rendering the municipal council ineffective.  
  • Praja’s Urban Governance Index (2024) highlights that only Kerala gives Mayors the power to write the "Annual Confidential Report" (ACR) of Commissioners. 
• Planning Myopia & Climate Blindness: Urban planning in India is rigid, static, and divorced from hydrological realities, treating land as "real estate" rather than an ecosystem.  
  • Master Plans are often decades old or non-existent, leading to "concrete-centric" development that paves over natural drains, turning moderate rainfall into catastrophic urban flooding events (Pluvial Flooding).  
  • For instance, NITI Aayog reports that 65% of Indian urban settlements lack any Master Plan, India has only 1 planner per 100,000 people.  
    • Bengaluru’s "Brand Bengaluru" struggle highlights how encroachment on Rajakaluves (stormwater drains) causes repeated tech-corridor inundation. 
• Personnel Paralysis & Capacity Vacuum: ULBs suffer from a chronic "Quantity and Quality" deficit in human resources, lacking specialized technical staff like hydro-geologists or urban designers.  
  • Recruitment powers are centralized at the State level, leading to massive delays in hiring, forcing cities to rely on short-term consultants or unskilled contractual labor for critical technical tasks.  
  • Praja Index 2024 flags significant concern is the high vacancy rate in sanctioned posts within Municipal Corporations. 9 cities viz. Ahmedabad, Gurugram, Shimla, Bhopal, Imphal, Aizawl, Amritsar, Greater Jaipur, and Kolkata have more than 40% vacant posts. Patna has the highest percentage of vacant posts (89%) at the City Administration level. 
    • In many cities, implementation of AMRUT 2.0 is stalling because ULBs lack the technical experts to design "circular water economy" projects. 
• Participatory Democracy on Paper: While the 74th Amendment mandates "Ward Committees" to decentralize power to citizens, they remain non-existent or "paper tigers" in most states.  
  • Without these committees, governance remains a top-down exercise where citizens cannot hold the local corporator accountable for hyper-local issues like streetlights or drainage, defeating the purpose of self-rule. 
  • Janaagraha’s 2023 report stated that 5 out of 35 states/UTs have enacted the community participation law and have notified rules for the same which requires a functioning ward. 
    • The Government of India framed a Model Municipal Law (2003) to guide states in reforming municipal legislation, but its adoption and effective implementation have remained largely inadequate. 
• The "Processing vs. Collection" Disparity in Waste Management: The Swachh Bharat Mission has successfully gamified "collection," but cities are failing catastrophically at "processing" and "legacy waste" remediation.  
  • For instance, an estimated 77% of the waste generated in Indian cities is dumped into open landfills without being treated. 
  • We are effectively moving waste from doorsteps to massive, fire-prone landfills because ULBs lack the technology and funds for scientific segregation and bio-remediation, creating environmental time bombs. 

What Measures can India Adopt to Strengthen Urban Governance?  

• Institutional: Implementing the "Mayor-in-Council" System: To fix the fractured accountability where elected representatives have no power over appointed bureaucrats, states must transition to a Mayor-in-Council system.  
  • This empowers the Mayor as the executive head, similar to a Chief Minister, restoring the democratic feedback loop where the administration is directly answerable to the people's mandate.  
  • It eliminates the "ceremonial figurehead" syndrome and ensures that decision-making is driven by political will and public demand rather than bureaucratic inertia. 
• Financial: Institutionalizing "Value Capture Financing" (VCF): Cities must move beyond reliance on state grants by aggressively adopting Value Capture Financing tools to monetize public infrastructure investments.  
  • When a new Metro line or highway increases adjacent land prices, the ULB should capture a portion of this unearned increment through "Betterment Levies" or higher FSI charges.  
  • This creates a self-sustaining "virtuous cycle" where infrastructure funds itself, reducing fiscal dependency on the Centre and ensuring that private windfall gains contribute to public good. 
• Planning: Mandating "Dynamic GIS-Based Master Plans": The era of static, 20-year Master Plans must be replaced by Dynamic, GIS-Based Local Area Plans that can be updated in real-time.  
  • By integrating satellite data with ground-level inputs, cities can actively monitor land-use changes, encroachments, and green cover rather than relying on outdated maps.  
  • This allows for "agile planning" where zoning regulations can adapt quickly to changing economic needs or climate risks, preventing the haphazard, illegal sprawl that currently plagues peri-urban areas. 
• Governance: Empowering "Area Sabhas" for Hyper-Local Democracy: To operationalize the 74th Amendment truly, states must devolve powers beyond Ward Committees to Area Sabhas (neighbourhood clusters). 
  • By legally mandating Participatory Budgeting, where these Sabhas vote on specific allocations for local parks, streetlights, or drainage, citizens transition from passive voters to active partners.  
  • This hyper-local oversight creates a powerful "social audit" mechanism, ensuring that municipal funds are spent on actual ground-level needs rather than vanity projects. 
• Sustainability: Adopting "Sponge City" Frameworks: Urban governance must internalize climate resilience by legally mandating Sponge City principles in all building bylaws and public works.  
  • This involves enforcing "zero-runoff" regulations for large campuses, revitalizing urban wetlands, and using permeable materials for pavements to absorb floodwaters.  
  • Shifting from "concrete-centric" engineering to "nature-based solutions" turns the city itself into a water-harvesting infrastructure, tackling the twin crises of urban flooding and water scarcity simultaneously. 
• Regional: Activating "Metropolitan Planning Committees" (MPCs): To manage the chaotic sprawl that spills beyond city limits, the constitutionally mandated Metropolitan Planning Committees must be activated with binding powers.  
  • Currently, peri-urban growth is a "no-man's land" governed by rural panchayats ill-equipped for urbanization; MPCs would unify these fragmented jurisdictions under a single regional plan.  
  • This ensures that essential grids like water supply, sewage, and transport are planned holistically for the entire metropolitan region, preventing the formation of unserviced "census towns." 
• Accountability: Legislating a "Right to Services Act" for Municipalities: States should enact a strict Urban Right to Public Services Act, defining clear timelines for municipal services like birth certificates, water connections, and pothole repairs.  
  • This legislation must include automatic "penalty clauses" where a delay results in a fine deducted from the responsible official’s salary and compensated to the citizen.  
  • This shifts the administrative culture from "discretionary favors" to "entitled rights," forcing the bureaucracy to adhere to service level benchmarks or face direct financial consequences.

Conclusion:

India’s vision of Viksit Bharat hinges on moving beyond colonial-era bureaucratic control to truly empower urban local governments as envisaged under the 74th Amendment. Strengthening mayoral authority, ensuring fiscal autonomy, and deepening citizen participation are essential to transform cities into resilient engines of growth, advancing SDG 11 (Sustainable Cities and Communities) and reinforcing the accountability needed for sustainable urban development.