India’s Urban Crisis Deepens as States Choke City-Level Governance

Syllabus: GS2/Governance

Context

• Urban India is buckling under the weight of rapid, unplanned growth, with dysfunctions ranging from clogged drains and toxic air to flooded streets and crumbling infrastructure — highlighting the urgent need for empowered city-level governance, often stifled by state control.

About India’s Urban Governance

• India’s urban landscape is undergoing a profound transformation, shaped by rapid population growth, infrastructure expansion, and evolving governance frameworks.
• Currently, over 30% of the population resides in cities in India and contributes nearly 70% of India’s GDP, and projections suggest that the population aims to rise to nearly 50% by 2050.

Governance Crisis in Urban India

• Unfulfilled Promise of Constitutional Framework: The 74th Constitutional Amendment Act (CAA) of 1992 granted constitutional status to Urban Local Bodies (ULBs), envisioning them as self-governing institutions responsible for urban development and service delivery.
  • The 12th Schedule of the Constitution assigned 18 functions to these bodies, including urban planning, sanitation, solid waste management, and poverty alleviation.
  • However, a CAG Audit in 2024 exposes that on average, only 4 out of 18 functions are under their full control, with state governments and parastatal agencies frequently intervening in local governance.
• Lack of Administrative Autonomy: ULBs often cannot recruit their own staff — personnel assessments are conducted by state authorities, leading to severe staff shortages.
  • For example, the Shimla Municipal Corporation required 720 personnel but was sanctioned only 20 new posts.
  • Across 18 states, one-third of all sanctioned positions remain vacant, crippling ULBs’ capacity to perform essential functions.
• Democratic Deficit and Institutional Neglect: The 74th Amendment mandated institutional mechanisms like State Election Commissions (SECs), District Planning Committees (DPCs), and Metropolitan Planning Committees (MPCs) to ensure accountability and coordinated planning.
  • But, the CAG audit in 2024 found widespread neglect of these provisions:
    • 61% (1,600 of 2,625) ULBs in 17 states lack an elected council.
    • Only five states appoint mayors through direct elections.
    • Just 10 states have constituted DPCs, and only three have prepared annual district plans.
  • Of the nine states required to form MPCs, only three have functional committees.
• Financial Distress and Fiscal Dependence: Many states have failed to regularly constitute State Finance Commissions (SFCs), delaying fiscal transfers and weakening local finances.
  • According to the CAG, across 15 states, ULBs faced an average shortfall of ₹1,606 crore due to partial release of recommended funds.
  • Furthermore, despite being empowered to collect property taxes, ULBs cannot fix or revise tax rates independently, with many taxes still pegged at outdated values.
  • It leads to a 42% expenditure–revenue gap across 11 states, forcing ULBs to allocate just 29% of their funds to development activities — far below what is needed for sustainable infrastructure and service delivery.

Major Efforts & Initiatives in Urban Governance

• National Urban Digital Mission (NUDM): It was launched to create a digital backbone for urban India;
  • It enables citizen-centric governance through platforms like:
    • India Urban Data Exchange (IUDX) for secure data sharing;
    • SmartCode for collaborative urban tech development;
    • Geospatial Management Information System (GMIS) for project monitoring;
• Smart Cities Mission: Aims to develop 100 cities with smart infrastructure, e-governance, and sustainable urban planning;
  • Focuses on integrated command centers, intelligent traffic systems, and digital citizen services;
• AMRUT (Atal Mission for Rejuvenation and Urban Transformation): Targets improvement in basic urban infrastructure: water supply, sewerage, stormwater drainage, and non-motorized transport;
  • Encourages reforms in urban planning and municipal finance;
• Compendium of Urban Reforms (NIUA): It is the best practices in financial management, e-governance, and pro-poor reforms.
  • Promotes peer learning through the PEARL initiative under JnNURM.
• Swachh Bharat Mission (Urban): Focuses on sanitation, waste management, and behavioral change;
  • Introduced star rating protocols for garbage-free cities;
• Ease of Living Index & Municipal Performance Index: Benchmarks cities on governance, quality of life, and sustainability;
  • Encourages data-driven decision-making and citizen feedback loops
• Annual Survey of India’s City-Systems (ASICS): Tracks municipal performance and governance quality across cities. 

Strengthening Urban Governance in India: Pathways to Reform

• Administrative Autonomy: ULBs need to have full control over staff recruitment and management.
• Democratic Strengthening: State governments must ensure regular municipal elections through empowered SECs.
• Functional DPCs and MPCs: These bodies should be operationalized for integrated regional planning.
• Fiscal Empowerment: SFCs should be constituted and implemented on time, ensuring predictable fiscal transfers.
• Local Tax Reforms: Grant ULBs authority to assess and revise local taxes, improving revenue generation.

Conclusion

• India’s urban future depends on revitalizing its Urban Local Bodies. Without real autonomy, both administrative and fiscal, cities will continue to struggle under weak governance and inadequate planning.
• Empowering ULBs through the faithful implementation of the 74th Constitutional Amendment is not merely a constitutional mandate — it is a developmental necessity.
• Through strong, accountable, and financially independent local institutions can India’s cities reclaim their promise as vibrant, productive, and livable spaces.

Source: BS