Recently, NITI Aayog released a report titled *Moving Towards Effective City Government*. India has 47 cities with a population of over one million. Together, these cities contribute nearly 60% of the country’s GDP. As urbanisation becomes the main driver of India’s growth, the report examines weaknesses in how our cities are governed. It also suggests several reforms to improve city administration.

NITI Aayog highlights six major problems with the current system of city governance.

1. Cities lack autonomy: The 74th Constitutional Amendment was expected to make urban local bodies stronger and give them greater independence. However, even after more than three decades, that has not happened.
2. Fragmented governance: City administration is spread across several agencies. Many departments of the state and central governments directly control different aspects of city governance. This creates confusion, overlap and poor coordination.
3. Elected leaders have no executive powers: Mayors and other elected representatives do not have direct executive authority. They can frame policies and give directions, but they have very little role in day-to-day administration. As a result, they also have very little responsibility. In many cities, the Mayor’s post is largely ceremonial.
4. Weak finances: The legal framework does not provide cities with enough sources of revenue. As a result, they remain dependent on grants from the state and central governments. Ironically, the cities that generate most of the country’s wealth are themselves financially weak.
5. Lack of skilled manpower: Most cities do not have enough trained professionals to manage urban administration effectively. Since city governments have limited financial freedom, they cannot invest adequately in training their staff or hiring experts.
6. No clear accountability: The real executive head of a municipal corporation is not the elected Mayor but the Municipal Commissioner appointed by the state government. This weakens democratic accountability because the person running the city is not directly answerable to its citizens.

Based on these observations, the report makes six major recommendations:

1. Mayors should be directly elected.
2. The Mayor and the council working under the Mayor should have executive powers.
3. Functions currently controlled by the state government should be transferred to city governments.
4. Cities should be given greater financial autonomy.
5. Professional capacity should be developed for urban administration, just as it is developed for state and central governments.
6. Greater emphasis should be placed on e-governance and digital administration.

Why is the current system flawed?

To understand these recommendations, we must first understand how municipal corporations function today. In Maharashtra, municipal corporations operate under two different laws. One law applies to Mumbai, and another applies to the remaining 28 municipal corporations. These laws are largely based on the system introduced by the British.

After the Revolt of 1857, over the years, the British realised that Indians had to be given some participation in governance. But they wanted to ensure that real power remained in their own hands. They therefore created a system that appeared democratic while keeping actual control with the bureaucracy. This is how the Commissioner system was created. Even today, the Municipal Commissioner and the bureaucracy under them manage the day-to-day administration and hold real power. Elected corporators are expected to provide direction, but executive authority remains with the administrative machinery.

This creates a serious problem. Unlike the Prime Minister and the Cabinet of Ministers at the national level, or the Chief Minister and the Cabinet at the state level, there is no single executive leadership at the city level. The Mayor has almost no executive powers, while responsibility for the city’s development is spread across all corporators.

There is a well-known saying: “When everyone is responsible, no one really is.”

That is exactly what happens in our municipal corporations. Our cities end up without real leadership. Although they are called city corporators, many focus only on their own wards instead of thinking about the city as a whole. They become ward representatives rather than leaders of the entire city.

The situation becomes even more complicated because the standing committees and other municipal committees include councillors from almost all political parties. Since every major party has a share in these committees, they all become part of the ruling establishment. In simple words, every party enjoys the benefits of power. The only difference is that the party with more members gets a larger share. These committees mainly decide policies and make recommendations. The responsibility for implementing those decisions lies with the Municipal Commissioner and the bureaucracy.

As a result, when projects are delayed or corruption comes to light, councillors blame the bureaucracy. The bureaucracy, on the other hand, is not elected by the people and therefore does not face political consequences. In short, the people who actually run the municipal corporation are not directly accountable to the citizens. This weakens the very idea of democracy.

Many people assume that the Mayor is the head of the city government. In reality, the Mayor has almost no executive authority. The Mayor’s role is mainly to preside over meetings of the municipal corporation, much like the Speaker of the Lok Sabha. As the city’s First Citizen, the Mayor also attends official and cultural events. Beyond these ceremonial duties, the office has very little real power.

The reforms journey so far

NITI Aayog argues that just as the Prime Minister heads the Union government and the Chief Minister heads the state government, the Mayor should be the executive head of the city government. This is not a new idea. The Second Administrative Reforms Commission made similar recommendations in 2007. In 2011, the Planning Commission also suggested that executive powers should rest with leaders elected by the people.

Over the years, almost every major political party has supported this idea in principle. Since municipal laws are made by state legislatures, it is the responsibility of state governments to bring these reforms. However, once in power, very few governments have taken meaningful steps. Even when reforms have been introduced, they have rarely been consistent. Decisions have often changed depending on political convenience.

In Madhya Pradesh, it was a Congress government that introduced direct elections for Mayors. Later, another Congress government reversed the decision. In Maharashtra, the first Shiv Sena-BJP government tried to strengthen the powers of the Mayor of Mumbai. That decision was later withdrawn. Similarly, the system of directly electing municipal council presidents in Maharashtra has changed several times depending on which party was in power. Some states introduced direct elections for Mayors but did not give them meaningful executive powers.

In 2016, Shashi Tharoor also introduced a Private Member’s Bill in Parliament proposing direct election of Mayors along with executive powers. Like most Private Member’s Bills, it never became law.

The history of these reforms tells a clear story.

The recommendations made by NITI Aayog have already been made by several expert committees in the past. Almost every political party agrees with them in theory. But no state government is willing to give up control over cities. Since Municipal Commissioners are appointed by state governments, their accountability naturally remains towards the Chief Minister and the Urban Development Minister rather than towards the elected Mayor or city councillors.

This arrangement suits governments of every political party.

As a result, city governance remains trapped in a contradiction. Political leaders say they support stronger city governments, but they are unwilling to give up the powers they currently enjoy.

Policy Research Organisation’s View

1. City Governments: It is a good thing that NITI Aayog has once again brought the issue of city governance into public discussion through a separate report. Another important thing is that the report itself refers to cities as governments, not just municipal corporations. After the 74th Constitutional Amendment, India officially became a three-tier system of governance: the Union, the States, and local governments. We use the word “government” for the Union and the States. Then why hesitate to call city administrations and governments? The words we use shape the way we think. Just as we say “Government of Maharashtra,” we should also officially say “Government of Mumbai City” and “Government of Pune City.”
2. Need for Constitutional Reform: At present, state governments have the power to decide how city governments should function. Because of this, the system keeps changing with every change of government. One government introduces multi-member wards, another changes the Mayor’s tenure, and policies keep shifting according to political convenience. Such instability harms long-term urban development. Therefore, reforms in city governance should ideally be protected through a Constitutional amendment so that they remain stable and consistent.
3. Mayor-in-Council System: The city should have a Mayor who acts as the executive head, and a council under the Mayor should function like a city cabinet. Just as the Chief Minister is assisted by secretaries, the Municipal Commissioner should work under the Mayor as the city’s chief administrative secretary. Experts may also need to be included in the city cabinet. In such cases, they can be appointed as nominated councillors and made part of the city government.
4. How Should the Mayor Be Chosen?: NITI Aayog recommends direct election of Mayors by citizens. However, changing only the election method will not automatically improve governance. In India, people do not directly elect the Prime Minister or the Chief Minister. They elect MPs and MLAs, who then choose the Prime Minister and Chief Minister. Because of this, those leaders remain accountable to Parliament and the State Assembly. If they lose the confidence of the House, they must step down. A similar system is needed at the city level. Otherwise, giving all executive powers to a directly elected Mayor could lead to excessive concentration of power. At the same time, if the state government retains strong control over the Mayor, city autonomy will be weakened. Therefore, a better model may be to elect the Mayor from among the elected councillors. The city council should have a fixed five-year term, and the leader of the majority party should become the Mayor. This would make the local, state, and national systems more consistent with each other.
5. Financial Autonomy: Even if the Mayor has executive powers, the system will fail if the city government has no money. Cities need stronger and more independent sources of revenue. They should receive a clear and fair share of GST collections. Today, GST is divided into CGST for the Centre and SGST for the States. A third component, Local GST, or LGST, should be created for city governments. Cities should also have the power to introduce certain local taxes. How long can we call cities the engines of development while refusing to put fuel into those engines? Without financial autonomy, political autonomy remains incomplete.
6. Decentralisation of Power: State governments should reduce their direct control over cities in areas such as urban planning and transport. In many major cities around the world, policing and public safety are handled by city governments. Why should Indian cities be denied similar powers? If a small state like Goa can manage its own police force with a much smaller budget, why should a city like Mumbai, with a far larger budget, be considered incapable of doing so?
7. People’s Participation: A healthy democracy allows people to directly participate in decisions that affect them. Democracy exists for the people, so where do citizens fit into our current system? Just as villages have Gram Sabhas, cities should have Area Sabhas or Ward Sabhas. Maharashtra passed a law for Area Sabhas in 2009, but it has never been implemented. Even if a Mayor-in-Council system is introduced, Area Sabhas should function effectively to ensure people’s participation. An Area Sabha is a meeting of voters from a ward. Citizens should be able to decide how ward funds are spent, what projects should receive priority, and offer suggestions on local development works. They should also have the right to record their support or objections. Citizens should be able to inspect whether public works have been carried out properly, whether contractors have maintained quality, and even recommend whether payments should be released. Such meetings would bring decision-making much closer to the people. When citizens begin making decisions on local issues, elected representatives will stop behaving like ward managers and start thinking about the city as a whole. They will become true city councillors rather than merely ward councillors.
8. Building Professional Capacity: Urban governance today requires expertise in areas such as city planning, e-governance, transport systems and digital administration. The knowledge and skills of city officials need to be strengthened. Cities also need specialists in these fields. Just as the Union and State governments have Public Service Commissions to recruit officers, city governments could have their own Urban Public Service Commissions to recruit qualified professionals for municipal administration.

NITI Aayog has presented this report with the goal of Vikasit Bharat by 2047.

However, superficial reforms will not be enough. The system requires fundamental changes.

For years, political parties have claimed to support stronger city governments “in principle.” The time has now come to move beyond statements and show the courage to implement these reforms.

A true democracy is built on decentralisation of power. Unless cities are given real autonomy, India will struggle to achieve its vision of becoming a Vikasit Bharat by 2047. More importantly, it will fall short of becoming a truly Vikasit Democratic Bharat.

-Tanmay Kanitkar
President, Policy Research Organization