New Delhi, April 25: The NITI Aayog on Friday released a report outlining a roadmap for strengthening governance in India’s million-plus cities, emphasising the need for empowered local administrations to drive economic growth and improve service delivery.
The report, titled “Moving Towards Effective City Government – A Framework for Million-plus Cities”, was released by Union Minister for Housing and Urban Affairs Manohar Lal Khattar at the India Habitat Centre, in the presence of urban development ministers from more than 10 states.
The report highlights that while India’s urbanisation is central to achieving long-term economic goals, including the vision of becoming a developed nation by 2047, cities continue to face structural constraints such as fragmented governance, limited financial autonomy, and weak accountability mechanisms.
According to the report, India’s large cities—those with populations exceeding one million—play a critical role as economic hubs but are hindered by institutional inefficiencies and capacity gaps. It calls for a shift towards empowered city governments with clearly defined authority, responsibility, and resources.
Among its key recommendations, the report proposes the introduction of directly elected mayors with fixed tenures, supported by a Mayor-in-Council system to strengthen leadership and ensure continuity in decision-making.
It also suggests integrating key urban services—such as water supply, sanitation, and public transport—under city governments to improve coordination and accountability, which are currently spread across multiple agencies.
To address financial constraints, the report recommends strengthening municipal revenue systems, ensuring timely fiscal transfers through State Finance Commissions, and enabling cities to access market-based financing tools such as municipal bonds.
Further, it calls for institutional restructuring by bringing various parastatal agencies involved in urban service delivery under the oversight of city governments, with clearly defined roles to reduce duplication and improve efficiency.
For implementation, the report urges states to amend their municipal laws in line with the proposed reforms, while recommending that the Ministry of Housing and Urban Affairs update the Model Municipal Law and provide guidance and incentives to support adoption.
The report also advocates a phased approach to reforms, allowing for pilot implementation, learning, and scaling up of successful models to ensure sustainability.
Speaking on the occasion, Rajiv Gauba said the report is based on extensive consultations, evidence-based analysis, and global best practices. He emphasised that establishing empowered city governments remains a critical gap in India’s governance framework.
“Without strengthening city governments, India cannot fully unlock the economic potential of its urban centres,” he said, adding that effective implementation of the recommendations will be key to achieving long-term development goals.
The report positions urban governance reform as a strategic priority, noting that India’s next phase of growth will depend significantly on the performance of its cities as engines of economic activity and service delivery.
