- Why in news
- On 25 April 2026, Union Housing and Urban Affairs Minister Manohar Lal Khattar released NITI Aayog's report on effective city government for million-plus cities at the India Habitat Centre, New Delhi.
- What it is
- This NITI Aayog report sets out a governance framework for India's million-plus cities. It argues that weak leadership, limited powers and poor finances hold back city performance. It links urban reform to the Viksit Bharat 2047 goal and a $30 trillion economy.
- Release
- Union Housing and Urban Affairs Minister Manohar Lal Khattar released the report on 25 April 2026 in New Delhi.
- Publisher and focus
- NITI Aayog prepared it, with a focus on million-plus cities as key economic centres.
- Leadership reform
- It recommends a directly elected Mayor with a fixed tenure, backed by an empowered Mayor-in-Council.
- Finance reform
- It seeks stronger own-source revenues, predictable transfers through State Finance Commissions, and access to municipal bonds.
- Implementation
- States should amend their Municipal Acts, and the Housing Ministry should update the Model Municipal Law.
- Constitutional basis
- The 74th Constitutional Amendment Act, 1992 gave urban local bodies constitutional status (Part IXA, Articles 243P-243ZG).
Don’t confuse with State Finance Commission vs Union Finance Commission: The State Finance Commission (Article 243Y) reviews municipal finances and recommends transfers from the state. The Union Finance Commission is under Article 280 and deals with Centre-state sharing.
Reports and indices: 14 Prelims questions since 2013; they test who publishes a report and what it measures.
Why it matters
- Empowered city governments can improve service delivery and accountability in cities that drive growth and jobs.
- Reform of finances and leadership supports the 74th Amendment's aim of self-government at the city level.
Problems
- Urban local bodies are a state subject, so reform depends on state governments agreeing to amend Municipal Acts.
- Parastatal agencies and state governments may resist losing control over water, transport and planning.
Way forward
- Use phased pilots in willing states, with Centre incentives and an updated Model Municipal Law.
- Strengthen own-source revenue, property tax and municipal bond markets, and build staff capacity.
Put in your answer
NITI Aayog framework: Report recommends directly elected Mayors with fixed tenure and bringing parastatals under city oversight to fix fragmented accountability.
74th Amendment Act, 1992: Gave constitutional status to urban local bodies, but devolution of functions to them is left to state legislatures.
- 2023Mains GS2 · Q3Whether states are reluctant to empower urban local bodies functionally and financially.
- 2017Mains GS2 · Q1Critically examine whether local self-government is an effective governance instrument.
- 2020Mains GS2 · Q13Challenges to local institutions' functionality beyond functions, functionaries, and funds.
- 2012Prelims Q40Constitutional provisions bearing on education, including Urban Local Bodies.
- 2012Prelims Q33Thirteenth Finance Commission features, including central tax grants devolved to local bodies.
- 2017Prelims Q60UN-Habitat's mandate, partners, and role in sustainable towns and cities.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Report on urban governance gaps like weak devolution and fiscal autonomy. Reports are 4% of Prelims; Mains questions on urban governance are rare, so no question.
Worth revising until Prelims 2027: most news questions come within two years of the event.