Moving Towards Effective City Government – A Framework for Million-Plus Cities” Report

Source: The post “Moving Towards Effective City Government – A Framework for Million-Plus Cities” Report” has been created, based on “NITI Aayog releases report on “Moving Towards Effective City Government – A Framework for Million-Plus Cities” published in “PIB” on  28th March 2026.

UPSC Syllabus: GS Paper-3-Economy

Context: NITI Aayog released the report “Moving Towards Effective City Government – A Framework for Million-plus Cities”. The report highlights that urbanisation is central to achieving the vision of Viksit Bharat by 2047 and building a $30 trillion economy.

Significance of Urbanisation

1. Cities act as engines of economic growth, innovation, and employment generation.
2. Million-plus cities contribute significantly to national economic output.
3. Effective urban governance is essential for improving service delivery and livability.

Key Challenges in Urban Governance

1. There exist fragmented institutional arrangements which weaken coordination.
2. There is limited devolution of powers to city governments.
3. Municipal bodies suffer from weak financial autonomy.
4. Accountability mechanisms are diffused across multiple agencies.
5. Leadership structures are often weak and lack continuity.
6. Capacity gaps hinder efficient service delivery and urban performance.

Key Recommendations of the Report

1. Strengthening City Leadership

1. The report recommends the introduction of a directly elected Mayor with a fixed tenure.
2. It proposes an empowered Mayor-in-Council system for better decision-making and accountability.

2. Integration of Urban Services

1. The report suggests bringing key services like water supply, sanitation, and public transport under city governments.
2. This integration will improve coordination and accountability in service delivery.

3. Enhancing Municipal Finances

1. Municipal bodies should strengthen their own-source revenues.
2. There is a need for predictable and timely fiscal transfers through robust State Finance Commissions.
3. Cities should be enabled to access market-based financing such as municipal bonds.

4. Institutional Restructuring

1. Multiple parastatal agencies should be brought under city government oversight.
2. Clear role definitions and coordination frameworks must be established.

Implementation Strategy

1. States are required to amend their Municipal Acts to incorporate governance reforms.
2. The Ministry of Housing and Urban Affairs should update the Model Municipal Law.
3. A phased approach is recommended to allow testing, learning, and scalability of reforms.

Conclusion: Strengthening city governments is a strategic imperative for India’s development trajectory. Empowered and accountable urban local bodies will enable cities to become drivers of economic growth and improve quality of life. Effective implementation of the recommendations is crucial to realise the vision of Viksit Bharat.

Question: Discuss the key challenges in urban governance in India and examine the recommendations of NITI Aayog for strengthening city governments in million-plus cities.

Source: PIB