The unfinished agenda of India's urban governance

Hindustan Times

23-04-2025

Political oversight of executive power is a fundamental principle of India's parliamentary democracy. The chain of accountability requires the executive or the government to be responsible to elected representatives, who, in turn, are answerable to citizens. Thus, the Union government is responsible to Parliament and state governments to state assemblies. Though municipalities have been in existence in India since the late 19th century, it was only in 1993 that the 74th Constitutional Amendment Act (74th Amendment) provided constitutional recognition to directly elected municipalities to exercise political oversight of city administration. However, in March 2025, a report of the Parliament Standing Committee on housing and urban affairs spotlighted the unfinished agenda of empowerment of our municipalities.
Recently, this Standing Committee presented its report to Parliament, analysing the budget of the ministry of housing and urban affairs (MoHUA) for 2025–26. The committee found that not only was the budget of MoHUA for FY25 slashed by 23% mid-year, MoHUA was unable to spend ₹20,875 crore (33%) even from that curtailed budget till the last month of the financial year. According to the committee, the lack of holistic and comprehensive urban planning at the city level has led to low demand for MoHUA's schemes and grants, resulting in under-utilisation of available funds. Without proper city-level plans, states and cities are less likely to avail of these resources. The committee recommended supporting municipalities to devise their own urban development plans in consultation with local stakeholders and to build their capacities.
Schedule XII of the Constitution, inserted through the 74th Amendment, devolves 'urban planning, including town planning' and 'planning for economic and social development' to municipalities. However, Janaagraha's Annual Survey of India's City-Systems (ASICS), 2023 report finds that the function of urban planning is typically not devolved to cities and decentralised urban planning is not mainstreamed. As per ASICS 2023, of 35 states/UTs, only Kerala provides a role for municipalities in the planning process as part of its planning legislation. Further, 39% of India's capital cities did not have an active master plan as of March 2023.
Besides visionless development, the absence of systematic planning with a shelf of development projects makes it difficult for municipalities to effectively determine the workforce and funds required to provide quality services to citizens. The Compendium of Performance Audits on the Implementation of the 74th Constitutional Amendment Act, 1992, covering 18 states and released in 2024 by the Comptroller and Auditor General of India, found an average vacancy of 37% against sanctioned strength in municipal corporations; in town panchayats, this goes up to an average vacancy of 44%. Additionally, the audit finds an average 42% resource expenditure gap for municipalities, pointing to financial constraints.
Therefore, on the one hand, MoHUA has unutilised funds and, on the other, cities struggle to find human and financial resources to address development challenges. To address this, cities need to be encouraged and equipped to devise 'city action plans' through 360° stakeholder engagement. As recommended by the committee, such 'assessment of civic needs' of different cities should drive future interventions by MoHUA through its schemes and programmes. However, to achieve this, our municipalities need to be empowered.
Regular elections that install democratically elected local governments are essential to ensure that planning is not reduced to yet another bureaucratic process. The CAG audit found that elections were delayed in over 60% of municipalities across India. This results in the absence of legislative and political oversight of the functioning of a city's administration.
Additionally, elected councillors and mayors need to be empowered through adequate devolution of 3Fs — funds, functions, and functionaries. Janaagraha's research indicates that on average, 5 out of 18 functions under Schedule XII are performed by parastatals which are not accountable to municipalities. This severely limits the ability of mayors and councillors to ensure proper execution of development works in their cities. There is also a need to significantly invest in capacity building and leadership development of elected representatives.
Further, citizen participation is critical in the success of any planning exercise. Formal platforms for citizen participation and accountability, such as ward committees and area sabhas, are already provided in various state municipal legislations. However, these need to be activated to prepare ward and neighbourhood development plans which will then feed into City Action Plans.
With over half of India's population projected to reside in urban areas by 2047, the time is ripe for MoHUA and state urban development departments to reorient their roles towards strengthening local governments.
Maansi Verma is with Janaagraha, a Bengaluru-headquartered think tank. The views expressed are personal