India's Cities Are Run by Its Weakest Tier of Government, and That Is No Longer Sustainable

Bengaluru's municipal corporation, governing a city that anchors a significant share of India's software exports, has spent long stretches without an elected council, run instead by state-appointed administrators pending fresh elections. This is not an isolated anomaly; it is representative of how Indian cities are actually governed, through a mix of elected councils with limited powers, parastatal agencies controlled by state governments, and bureaucrats who answer upward to the state rather than downward to city residents. The 74th Constitutional Amendment, passed in 1992, was meant to fix precisely this by giving urban local bodies a constitutionally protected role, but three decades on, most Indian cities remain governed by an arrangement that concentrates real power at the state level while leaving municipal corporations to manage garbage collection and little else of consequence.

What the 74th Amendment Promised

The amendment mandated regular municipal elections, reserved seats for women and scheduled castes and tribes, and required states to constitute district planning committees and metropolitan planning committees to coordinate urban development. It also listed eighteen functions, including urban planning, water supply, and public health, that states were encouraged to transfer to municipal bodies through the Twelfth Schedule. The word "encouraged" is doing a great deal of work in that sentence, because the amendment left the actual transfer of functions, funds, and functionaries to the discretion of state legislatures, and most states have transferred functions on paper while retaining control through parastatal bodies, water boards, development authorities, and slum clearance boards, that report to state ministers rather than elected mayors.

The Parastatal Problem

This is perhaps the single biggest reason Indian urban governance remains so fragmented. Instead of a mayor and municipal council controlling water supply, land use planning, and public transport within a city, these functions are typically split across separate parastatal agencies, a water and sewerage board, a development authority, a transport corporation, each answering to a different state department and often to different political masters. A resident with a grievance about waterlogging may find that the municipal corporation manages storm drains, the development authority manages new layouts, and the state public works department manages arterial roads, with no single accountable office. This fragmentation is not accidental; it has persisted because it allows state governments to retain control over lucrative land and infrastructure decisions in cities, which represent some of the largest sources of political patronage in Indian public life.

The Money Follows the Power

Municipal corporations in India raise a strikingly small share of their revenue independently, relying heavily on state transfers and central grants that arrive with conditions attached and often with delay. Property tax, the most obvious and internationally standard source of municipal revenue, remains under-collected across most Indian cities because valuation rolls are outdated, exemptions are politically popular, and municipal administrations lack the staff to enforce collection. A 2021 Reserve Bank of India study on municipal finances found that Indian cities' own revenue as a share of GDP was a fraction of that seen in Brazil or South Africa, both federal systems with comparable development challenges, suggesting the constraint is institutional design rather than an inherent limit on what Indian cities could raise if empowered and organised to do so.

Staffing the State's Weakest Tier

Municipal corporations are also chronically understaffed in technical roles, urban planners, engineers, public health officers, relative to what managing a modern city requires. Vacancies in municipal town planning departments across major cities routinely run into double-digit percentages, and where officers are appointed, they are frequently drawn from state cadres and rotated in and out of city administration in the same pattern that afflicts district administration elsewhere, undermining the accumulation of city-specific institutional knowledge that good urban management requires.

Kerala's Partial Counter-Example

Kerala offers a genuine counter-example worth taking seriously. Its decentralisation reforms, beginning with the People's Plan Campaign in 1996, devolved a substantial share of the state plan budget directly to local bodies, urban and rural, along with real functional authority over planning decisions. Kerala's municipalities are not free of the parastatal fragmentation seen elsewhere, and the state's small size and high literacy make comparisons with larger, more heterogeneous states imperfect. But the experiment demonstrates that the constitutional architecture of the 74th Amendment can support genuine devolution when a state government chooses to use it that way, which strengthens rather than weakens the case that the primary obstacle elsewhere is political will, not constitutional design.

Why This Cannot Wait

India's urban population is projected to keep growing substantially over the coming decades, and cities already contribute a large majority of national economic output despite governing a minority of the population. Continuing to run this share of the economy through municipal institutions that lack financial autonomy, technical staffing, and coordinated authority over basic infrastructure is not a sustainable arrangement, whatever short-term political convenience it offers state governments. The choice is not really between devolution and centralisation in the abstract; it is between cities that are governed coherently by accountable local institutions and cities that continue to be managed as an afterthought by state governments focused on other priorities, with residents left to navigate a maze of agencies for even routine grievances. Thirty years after the constitutional promise was made, that choice is overdue.