In the news

Urban Governance Reforms and Urbanisation in India

GS1 UrbanisationGS2 GovernancePrelims and Mains

In the news since 25 October 2026

Why in news
On 25 October 2026, NITI Aayog Member Rajiv Gauba addressed the valedictory session of the 2nd National Urban Conclave. He called for empowered city governments and reforms in urban governance, planning and financing.
What it is
The 74th Constitutional Amendment (1992) gave constitutional status to urban local bodies and added the Twelfth Schedule, which lists 18 functions for them. Many states have devolved these functions only in part, and municipal finances and elections remain weak. NITI Aayog and MoHUA have produced a report, Moving Towards Effective City Governance, to push reform.
Urban population projection
Urban population is projected to rise from about 50 crore now to 85 crore by 2050, when nearly half of Indians will live in cities.
Functions to be devolved
States should devolve all 18 functions to urban local bodies in line with the 74th Amendment, including master planning, water supply, fire services and traffic.
Governance report
The report Moving Towards Effective City Governance, by NITI Aayog and MoHUA, recommends directly elected mayors with 5-year terms, a Mayor-in-Council system and timely municipal elections.
Urban Challenge Fund and city economic regions
The 2025-26 budget announced a ₹1 lakh crore Urban Challenge Fund. This year's budget allots ₹5,000 crore each to 7 city economic regions over five years.
Central grants to ULBs
The share of Central Finance Commission grants to urban local bodies has risen to 45% from 36%, but state-to-city fund devolution remains low.
Constitutional basis
The 74th Amendment Act, 1992 inserted Part IXA (Articles 243P-243ZG) and the Twelfth Schedule.

Don’t confuse with 73rd vs 74th Amendment: The 73rd Amendment covers panchayats (Eleventh Schedule, 29 subjects). The 74th covers municipalities (Twelfth Schedule, 18 functions).

Don’t confuse with Mayor-in-Council vs directly elected mayor: Mayor-in-Council is an executive committee of councillors headed by the mayor. A directly elected mayor is chosen by voters. The report proposes both.

No practice question for this one; the card may still help an answer. Why: Urban governance and finance is a syllabus topic, but this is a speech with projections and no new decision; UPSC is unlikely to set a question on this item.

Worth revising until Prelims 2028: most news questions come within two years of the event.

Each time it was in the news

  1. 25 October 2026

    On 25 October 2026, NITI Aayog Member Rajiv Gauba addressed the valedictory session of the 2nd National Urban Conclave. He called for empowered city governments and reforms in urban governance, planning and financing.