New Delhi, April 25: NITI Aayog on Saturday, April 25, released a landmark report outlining a comprehensive urban governance reform framework aimed at transforming India's million-plus cities into powerful engines of economic growth. The report, titled Moving Towards Effective City Government – A Framework for Million-Plus Cities, directly addresses long-standing structural failures in urban administration — including fragmented institutional authority, weak financial autonomy, and blurred accountability — that have historically hobbled Indian cities.

Why Urban Governance Reform Is Urgent Now

India's cities are expected to drive the country's ambition of becoming a $30 trillion economy and achieving the Viksit Bharat 2047 vision. Yet, decades of under-empowered municipal bodies, excessive state-level control, and starved urban finances have left city governments unable to deliver basic services efficiently.

This comes amid growing recognition that India's urbanisation rate is accelerating rapidly, with million-plus cities already contributing a disproportionately large share to national GDP. The report argues that without structural governance fixes, this urban potential will remain unrealised — a costly missed opportunity for the national economy.

Notably, the 74th Constitutional Amendment of 1992 had mandated devolution of powers to urban local bodies, but implementation across states has remained patchy and inconsistent for over three decades. This report is, in effect, a renewed push to make that constitutional promise a functional reality.

Key Recommendations of the NITI Aayog Report

Union Minister Manohar Lal Khattar released the report at a high-profile event attended by Urban Development Ministers from more than 10 states, signalling broad political buy-in for the reform agenda.

The report's most significant recommendation is the introduction of a directly elected Mayor with a fixed tenure, supported by an empowered Mayor-in-Council system. This would replace the current diffuse leadership structures where elected mayors often lack real executive authority, with power concentrated in state-appointed bureaucrats or parastatals.

Other major recommendations include integrated urban service delivery by bringing water supply, sanitation, and public transport directly under city government control; strengthened municipal finances through own-source revenues and access to municipal bond markets; institutional restructuring of parastatal agencies under city government oversight; and legislative reform through amendments to state Municipal Acts.

What NITI Aayog Members Said

Rajiv Gauba, Member, NITI Aayog, described the report as the outcome of extensive deliberations, evidence-based analysis, and a study of global best practices conducted with a panel of domain experts. He emphasised that the framework is grounded in comparative international experience of cities that successfully transformed their governance structures.

The report's emphasis on directly elected Mayors mirrors successful models in cities like London, Tokyo, and New York, where strong mayoral authority has been directly linked to better urban outcomes in transport, housing, and public health.

Follow the Money: Who Benefits and Who Must Act

The push for municipal bonds is particularly significant. Currently, only a handful of Indian cities have successfully raised funds through this route. If implemented at scale, it could unlock billions in private capital for urban infrastructure, reducing dependence on central and state grants that are often delayed or politically conditioned.

However, the critical bottleneck remains political will at the state level. State governments have historically resisted devolving power to city governments, as urban control is a significant source of political patronage. The presence of ministers from more than 10 states at the launch is encouraging, but reform adoption will ultimately depend on whether states follow through with legislative amendments — a process that has stalled repeatedly since 1992.

Impact on Citizens and What Comes Next

For ordinary urban residents, effective implementation could mean faster resolution of civic complaints, more reliable water and sanitation services, better-planned public transport, and cities financially capable of long-term infrastructure investment without perpetual state bailouts.

The Ministry of Housing and Urban Affairs is expected to follow up with updated policy guidelines and reform incentive frameworks for states in the coming months. With India's urban population projected to cross 600 million by 2036, the window to get governance architecture right is narrowing — making these recommendations not just policy suggestions, but near-term national imperatives.