Metropolitan cities are providing major portions of national wealth, but their governance is fraught with intricate institutional relationships. Explain.

Economic Contribution of Metropolitan Cities

Metropolitan cities are the economic epicenters of India, attracting investments, talent, and driving a significant portion of the country's economic activity. Their contribution to the national wealth is substantial, underscoring their critical role in India's development trajectory.

• GDP Contribution: The top 50 cities in India contribute nearly 40% of the national GDP (2022-23), with urban areas overall accounting for 50-60% of India's GDP in recent years.
• Major Economic Hubs: Cities like Mumbai (financial capital), Delhi NCR (administrative and economic powerhouse), Bengaluru (technology capital), and Chennai (manufacturing hub) are key drivers of economic growth. For instance, Mumbai alone has a GDP of approximately $310 billion, and Delhi NCR around $293 billion (as of 2025).
• Employment Generation: These cities offer a higher share of "regular" wage workers and employment in formal sector enterprises, indicating their role in providing stable livelihoods.

Intricate Institutional Relationships and Governance Challenges

Despite their economic vitality, metropolitan governance in India is characterized by a complex and often fragmented institutional landscape, leading to numerous challenges:

1. Multiplicity of Agencies and Overlapping Jurisdictions

Metropolitan areas are typically managed by a multitude of governmental and parastatal agencies, often operating with overlapping functions and jurisdictions, leading to a lack of coordination and accountability.

• Parastatal Dominance: Many key urban services like water supply, electricity distribution, road transport, and infrastructure development are handled by state-controlled parastatal agencies rather than the elected Urban Local Bodies (ULBs). This includes bodies like Development Authorities, Housing Boards, and Water Supply and Sewerage Boards.
• Functional Overlap: The 74th Constitutional Amendment Act, 1992, devolved 18 functions to ULBs (mentioned in the 12th Schedule), including urban planning, land-use regulation, and water supply. However, in practice, a significant number of these functions are still performed by state-level parastatals, leading to ambiguity and duplication of efforts.
• Lack of Unified Command: The absence of a single, empowered metropolitan authority makes integrated planning and execution difficult. Different agencies often have different political masters, resulting in coordination challenges.

2. Weakening of Urban Local Bodies (ULBs)

Despite the constitutional recognition, ULBs often lack the autonomy, financial resources, and administrative capacity to effectively govern metropolitan areas.

• Limited Autonomy: State governments frequently encroach upon the powers and functions of ULBs, undermining their autonomy through various mechanisms, including the appointment of state officials to key positions and imposing state policies.
• Ceremonial Mayors: Unlike many global metropolitan cities, Indian mayors often lack executive authority, functioning largely as ceremonial heads with short tenures, hindering strong city leadership.
• Irregular Elections: While the 74th Amendment mandated regular elections, delays in holding municipal elections have been observed in several states, further weakening democratic decentralization.

3. Financial Constraints and Fiscal Dependence

ULBs face severe financial deficits, making them heavily reliant on state and central government transfers, which impacts their operational autonomy and ability to undertake long-term development projects.

• Low Own-Source Revenue: Municipal corporations' revenue receipts are modest, accounting for just 0.6% of GDP in 2023-24, significantly lower than central and state governments. Property tax mobilization, a primary source, is abysmally low at 0.12% of GDP.
• Post-GST Impact: The subsumption of major revenue sources like Octroi and sales tax into GST has reduced ULBs' independent revenue-raising avenues, increasing dependence on inter-governmental transfers.
• Under-utilization of Potential: ULBs often fail to realize the full potential of existing revenue sources, such as property taxes, due to inefficient assessment and collection mechanisms.

4. Ineffective Metropolitan Planning Committees (MPCs)

Constituted under Article 243ZE of the Constitution, MPCs are envisioned for integrated planning across metropolitan areas. However, their effectiveness has been limited.

• Lack of Executive Powers: MPCs often lack executive powers, dedicated staff, and independent budgets, rendering them largely advisory bodies.
• Hesitation by State Governments: State governments are often reluctant to devolve significant authority to MPCs, thereby undermining their potential for coordinated regional planning.
• Poor Formation and Functionality: In many states, MPCs have not been formed, or where formed, their functionality is dubious, with limited involvement of local elected representatives.

5. Challenges in Implementing Flagship Schemes

Even national urban development initiatives face governance hurdles at the metropolitan level.

• Smart Cities Mission: Despite its objectives of smart governance and infrastructure, the mission has faced challenges like project delays, weak ULB capacity (only 25% having trained planning staff), and a digital divide impacting the reach of smart services.

6. Lack of Citizen Participation and Accountability

The complex institutional structures often alienate citizens from governance processes, impacting transparency and accountability.

• Bureaucratic Inefficiencies: Red tapism and procedural delays exacerbate governance issues, reducing responsiveness to citizen needs.
• Limited Public Engagement: Despite provisions for Ward Committees, genuine public participation in urban planning and decision-making remains a challenge.

The intricate institutional relationships thus create a fragmented governance landscape where decision-making is dispersed, accountability is diluted, and the potential of metropolitan cities as economic powerhouses is not fully realized in terms of livability and sustainable development.