Introduction
The 74th Constitutional Amendment Act, 1992, inserted Part IXA into the Constitution to institutionalise Urban Local Bodies (ULBs) as vibrant, representative institutions of local self-government. However, rapid urbanisation has exposed deep-seated structural, financial, and administrative deficits that prevent municipalities from functioning as effective units of urban governance.
Incomplete Functional Devolution and Parastatals
Although Article 243W and the Twelfth Schedule delineate 18 functions for urban governance, actual devolution remains at state discretion. State governments frequently bypass ULBs by creating non-representative parastatal agencies—such as urban development authorities, water supply boards, and transit corporations—which usurp municipal functions and undermine local autonomy.
Fiscal Crippling and Resource Dependency
Municipal revenue generation in India remains severely constrained, directly impairing civic service delivery:
- Low Revenue Base: According to the Reserve Bank of India, municipal revenue in India stagnates at approximately 0.6% of GDP, which is significantly lower than that of emerging peers like Brazil or South Africa.
- Suboptimal Property Tax: Property tax, the primary own-source revenue for ULBs, suffers from poor collection efficiency, outdated valuation registers, and low buoyancy.
- Neglect of State Finance Commissions: Recommendations of State Finance Commissions (SFCs) constituted under Article 243Y regarding fiscal devolution are routinely delayed, rejected, or partially implemented by state executives.
Executive Imbalance and Disempowered Mayors
Most Indian cities feature a weak mayoral system characterised by short, fragmented tenures and a complete absence of executive authority. De facto executive power resides in the state-appointed Municipal Commissioner, creating an administrative hierarchy where elected representatives cannot hold the permanent executive accountable to the electorate.
Electoral Deficits and Weak Public Participation
Constitutional mechanisms designed to foster grassroots democracy are frequently circumvented:
- Delayed Elections: State governments repeatedly postpone civic elections on arbitrary administrative pretexts, violating Article 243U and defying directives from the Supreme Court in cases like Suresh Mahajan v. State of Madhya Pradesh (2022).
- Dormant Ward Committees: Ward Committees mandated under Article 243S to ensure community-level public participation remain either unconstituted or defunct in most municipal areas.
Fragmented Urban Planning
Integrated spatial and infrastructure development remains largely unachieved. Metropolitan Planning Committees (MPCs) mandated by Article 243ZE have rarely been operationalised, resulting in haphazard peri-urban sprawl. Furthermore, Special Purpose Vehicles (SPVs) established under the Smart Cities Mission have frequently operated independently of elected municipal councils, further fracturing urban governance.
Conclusion
To build resilient cities, comprehensive institutional overhaul is imperative, starting with the implementation of the Second Administrative Reforms Commission’s recommendation for an empowered Mayor-in-Council system. Fiscal empowerment through municipal bond markets, GIS-based property tax reforms, and genuine devolution of the 3Fs (Funds, Functions, and Functionaries) are critical to transforming urban local bodies into engines of participatory governance.