Moving Towards Effective City Government A Framework for Million-Plus Cities

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MOVING TOWARDS EFFECTIVE
CITY GOVERNMENT -
A FRAMEWORK FOR
MILLION-PLUS CITIES Foreword Preface Acknowledgements List of Acronyms
AMRUTAtal Mission for Rejuvenation and Urban Transformation
APCRDAAndhra Pradesh Capital Region Development Authority
ATRAction Taken Report
BBMPBruhat Bengaluru Mahanagara Palike
CAAConstitutional Amendment Act
CAGComptroller and Auditor General
CEOChief Executive Officer
DMCDelhi Municipal Corporation
FCFinance Commission
FYFinancial Year
GDPGross Domestic Product
GLAGreater London Authority
GoIGovernment of India
iGOTIntegrated Government Online Training
INRIndian National Rupee
ITInformation Technology
MCMunicipal Corporation
MCDMunicipal Corporation of Delhi
MMCMumbai Municipal Corporation
MoHFWMinistry of Health and Family Welfare
MoHUAMinistry of Housing and Urban Affairs
MoUDMinistry of Urban Development
PSUPublic Sector Undertaking
RBIReserve Bank of India
SEBISecurities and Exchange Board of India
SFCState Finance Commission
SMAState Municipal Act
SPVSpecial Purpose Vehicle
TfLTransport for London
ToRTerms of Reference
UFC Urban Finance Commission
ULBUrban Local Body
ULGUrban Local Government CHAPTER 1: URBAN GOVERNANCE - AN IMPORTANT REFORM AGENDA1
1.1 Background1
1.2 Legacy of the Urban Governance Architecture in India2
1.3 Principles of effective urban governance and associated challenges3
CHAPTER 2: OVERVIEW OF THE MILLION-PLUS CITIES IN INDIA10
2.1 India’s Million-Plus Cities: Scale and Significance10
2.2 Institutional and Governance Structures in Million-Plus Cities11
2.3 Service Delivery Across Million-Plus Cities11
2.4 Fiscal Profile and Resource Flows in Million-Plus Cities12
2.5 Phased Approach: Start with the Million-Plus Cities15
2.6 Proposed reforms in Million-Plus Cities15
CHAPTER 3: MOVING TOWARDS EFFECTIVE AND ACCOUNTABLE
CITY GOVERNMENT16
3.1 Key Recommendations16
(I) Empowered political and executive leadership
with a directly elected Mayor having a fixed tenure17
(II) Introduce an empowered Mayor-in-Council system
to provide strong, accountable city-level governance21
(III) Parastatals and SPVs delivering essential urban services
should directly report to the city government23
(IV) Strengthening State Finance Commissions (SFCs)
for streamlining fund transfers to ULBs26
CHAPTER 4: IMPLEMENTATION OF THE REFORMS: NUDGING STATES27
4.1 Roles and Responsibilities for Implementation28
Annexure 1: Constitution of the committee32
Annexure 2: States with direct election of the Mayor and their current status33
Annexure 3: A summary of common challenges encountered34
Annexure 4: Cities governed by Municipal Corporations36
Annexure 5: Mayor’s Powers: Global Examples38
Annexure 6: Allocation of responsibility for delivering six services41
Annexure 7: Details of Municipal Bond Issuances43
Contents NITI Aayog 1
Chapter 1: Urban Governance - an important reform agenda
1.1 Background
Urbanisation will be at the centre of realising the goal of Viksit Bharat and becoming a $30
trillion economy by 2047. Urban regions will anchor growth in manufacturing and services,
drive innovation, and generate the majority of new jobs. For this growth to sustain, cities must
deliver reliable infrastructure, efficient services, provide a predictable regulatory environment
based on a strong governance system, absorb investments and emerge as aspirational cities
to attract global talent.
The future growth trajectory of cities will hinge on their ability to effectively address a number
of structural challenges faced today, including unplanned urban sprawl, sustained migration
pressures, escalating climate risks, and a governance system that has not evolved in step
with urban expansion. Together, these constraints are limiting the capacity of cities to deliver
services, infrastructure, and quality of life commensurate with the aspirations of a rapidly
growing urban population. With higher population density, cities have been shouldering
a disproportionate share of climatic impact, with majority of emissions emerging from
urban areas, cities bearing a higher incidence and impact of climate-related risks of floods,
heatwaves, public health shocks, and pollution. These pressures will intensify as India’s urban
transition accelerates, with rapid population growth placing escalating demands on land,
housing, mobility, water supply, sanitation, public health and environmental management.
In this context, city governments must be suitably equipped to deal with the emerging
challenges in a proactive and time-bound manner. For this, the city administration that URBAN REFORM AGENDA REPORT 2
exists today in most of the Indian cities needs to be systematically strengthened through
inter-institutional coordination, clearer organisational mandates, longer planning horizons,
and enhanced capacity to manage services, infrastructure, and resources in a resilient and
sustainable manner.
The Seventh Schedule of the Constitution of India delineates the distribution of legislative
powers between the Union and the States, with urban planning and urban governance
placed primarily within the State List (List II). Accordingly, States occupy a central position in
legislative and institutional architecture governing cities. The 74
th
Constitutional Amendment
Act, 1992, provides the enabling framework for effective urban governance by recognising
municipalities as institutions of local self-government and outlining their functional
responsibilities. However, in practice, the devolution of powers, functions, and financial
autonomy of Urban Local Bodies is contingent upon State specific municipal legislation and
administrative frameworks resulting in wide variations across states with an ineffective third
tier of local urban governance.
Ministry of Housing and Urban Affairs (MoHUA) defines urban governance as “the management
and administration of urban areas, which is primarily the constitutional domain of the State
government.”
1
Strengthening urban governance would go beyond only sectoral reform
and needs to be considered as a foundational requirement for achieving India’s economic,
social, and climate imperatives for Viksit Bharat @ 2047. Effective governance systems will
determine whether cities can sustain economic momentum, ensure quality of life for residents,
and manage the complex environmental challenges during the decades ahead.
This report focuses on the issues concerning urban governance in the context of planning for
Viksit Bharat @2047.
1.2 Legacy of the Urban Governance Architecture in India
India’s urban governance system is rooted in a constitutional legacy that recognises only
the Union and States as the tiers of government. Urban Local Bodies (ULBs) or Urban Local
Governments (ULGs) operated largely as administrative extensions of state governments,
with limited autonomy or statutory authority enshrined in the Constitution. This centralised
design shaped the enduring patterns of weak devolution and fragmented responsibility in
urban governance.
The 74
th
Constitutional Amendment Act (1992) addressed this by granting ULBs constitutional
status and providing enabling provisions for the devolution of 18 functions to urban
governments, leaving it to the respective state governments to take the final decision. Over
time, different states have adopted widely differing approaches, with ULBs in majority of the
states having control over only a few functions. Core responsibilities such as planning, water
supply, sewerage, and transportation continue to vest with state departments or parastatals
outside the effective control of the municipal bodies.
The urban governance architecture across states today lies between several different
Acts (Municipalities Acts, Municipal Corporation Acts, Urban Development / Development
Authorities Acts, etc.), several bearing strong legacies from earlier Acts going back to British
times or the earlier States they were formed from. But between them and the State level bodies
(para-statal boards, SPVs, corporations, etc.) urban governance across India is marked by
overlapping mandates, limited municipal authority, and weak coordination across agencies,
1 Ministry of Housing and Urban Affairs (MoHUA), Government of India (2024). National Urban Digital Mission (NUDM): Management and
Governance Registry – Knowledge Standards, New Delhi. NITI Aayog 3
leading to limited accountability. These structural constraints largely continue to affect how
cities function today and frame the governance challenges, with differing ramifications even
within cities of a State, given the particular character and capacity of the city.
Against this backdrop, this Report assesses the current status of the city governments
across states, identifies systemic governance challenges and proposes recommendations for
establishing a truly empowered city government.
1.3 Principles of effective urban governance and associated
challenges
Urban governance in India is characterised by a persistent and systemic deficit that
constrains the ability of city governments to plan, manage the overall growth and deliver
essential services effectively. Despite the central role of cities in economic growth, social
development and environmental management, the governance arrangement remains
constrained by historical legacies, uneven devolution and institutional fragmentation. These
constraints manifest through a lack of mandate, weak institutional arrangements, constrained
fiscal position, absence of streamlined processes and inadequate capacity, undermining
accountability, slow decision-making and hinder coordinated action. Strengthening urban
governance would require addressing these foundational enablers to allow city governments
to function as effective institutions of self-government.
(i) Limited devolution of functions
City governments remain inadequately empowered to perform their mandated roles as they
lack direct control over several core functions essential to the effective functioning of a city.
While the 74
th
Constitutional Amendment Act provided an enabling framework through the
inclusion of 18 functions in the Twelfth Schedule for potential devolution to ULBs, as mentioned
in earlier section, the extent of devolution has been left to the discretion of the states.
There is significant inter-state and intra-state variations in functional devolution, with transfers
remaining largely partial and the city governments exercising control over only a limited
set of basic functions. A Performance Audit of the Implementation of the 74
th
CAA by the
Comptroller & Auditor General of India across 18 States (and tabled in the their legislatures),
found that city governments on average have full jurisdiction only in 4 functions, and minimal
role in 7 functions, while other functions are either not devolved at all, or city government
having no role whatsoever, or being shared with other parastatal bodies
2
.
These limitations are further compounded by fragmented service delivery arrangements.
The continued treatment of municipalities as subordinate administrative units, instead of
an empowered third-tier of governments, has resulted in states retaining control over key
functions and decision-making, either directly or through parastatal agencies. The resulting
parallel institutional structure weakens municipal authority, fragments service delivery and
dilutes accountability, as no single institution is responsible for overall urban outcomes.
Dispersed responsibilities across parastatal agencies and the State departments they report
to restrict city governments largely to operations & maintenance aspects and constrain
the ability of municipal governments to effectively oversee the delivery of the basic urban
functions.
2 Compendium of Performance Audits on the Implementation of the 74th Constitutional Amendment Act, 1992: Landscape across India
Volume I, 2024, Page 32 https://cag.gov.in/uploads/StudyReports/SR-Compendium-067346fdd7000e9-76046538.pdf URBAN REFORM AGENDA REPORT 4
Meaningful devolution and clearer functional assignments are, therefore, essential for
strengthening urban governance, improving service delivery, and enabling ULBs to function
as accountable institutions responsible for urban outcomes and improved ease of living for
citizens.
(ii) Fragmented institutional setup and ineffective leadership
While the Constitution provides the enabling framework, the state legislations govern the
establishment, structure and functioning of ULBs. A wide variance across states is observed
both in the structuring of the city administration as well as in devolution of powers and
responsibilities. Notwithstanding these differences, ULBs are generally characterised by weak
political leadership, fragmented mandates and absence of clear role demarcation between
elected representatives and the municipal administration, undermining effective urban
governance and accountability. Inadequate oversight mechanisms and inconsistencies in
electoral processes further dilute accountability at the city level. Collectively, limited political
empowerment and administrative instability constrain long-term planning, policy continuity,
and strategic decision-making in urban governance.
Mayors are not regarded as the real heads of the ULBs
While Mayor is an integral part of the administration of any city, their effectiveness varies
largely across cities. Barring a few states such as Bihar, Chhattisgarh, Haryana, Jharkhand,
Madhya Pradesh, Odisha, Uttar Pradesh, and Uttarakhand, Mayors are not directly elected.
The states have also been changing the selection process of Mayors over time, as brought
out in Box 1. Even the elections for ULBs are not held regularly and are often delayed or
repeatedly postponed. Further the tenure of Mayors also varies widely across states as well
as across cities within a state. It ranges from 1 year in case of Bengaluru and Chandigarh, 2.5
years for Mumbai, to 5 years in case of Bhopal. Even within the same state, there are instances
of cities having differing Mayoral tenures, often on account of variations amongst governing
legislation. For example, in Panaji Municipal Corporation, the mayoral tenure is 1 year, while it
is 5 years in Municipalities in Goa. In Arunachal Pradesh and Jammu & Kashmir, the Mayoral
tenure at Municipalities is 5 years and while it is 2.5 years at Municipal Corporations. Himachal
Pradesh and Karnataka which also had similar tenure differences, recently amended their
respective Municipal laws to ensure consistency of tenure within the States. This was one
of the reasons that had prompted the need for a Model Municipal Act, which was issued by
MOHUA (the then MOUD) in 2003. NITI Aayog 5
Mayors generally do not play a significant role in city administration in the absence of
having adequate executive powers. Often, actual executive authority is vested in the
Municipal Commissioners and, in some cases, delegated to Standing Committees for sectoral
administration. As a result, Mayors lack administrative or financial control over the ULBs,
preventing the office from functioning as a strong city leadership and reducing it to a largely
symbolic stature.
At present, overlapping and ambiguously defined roles between the elected executive
(Mayor/Chairperson) and the appointed executive (Municipal Commissioner/Chief Officer)
often lead to institutional disconnect, diluted accountability, and weak political oversight of
the administration. Table 1 presents the Mayoral systems of some of the major cities.
Table 1: Mayoral systems of some of the major cities
S.
No
City Term
Method of
election
Role of Mayor and Executive Control
1 
Mumbai
(Maharashtra) 
2.5 Years
(Rotating) 
Indirect (Elected
by Councillors) 
• Presides over corporation meetings.
Section 64, Mumbai Municipal
Corporation (MMC) Act, 1888
explicitly vests the entire
“Executive Power” in the Municipal
Commissioner, not the Mayor.
• While Section 37 defines the Mayor’s
role as a presiding authority.
• The Commissioner is the
final authority on finance and
administration. 
Box 1: Changes in Mayoral systems across some states over time
Over the years, some states like Tamil Nadu, Himachal Pradesh, and Rajasthan, have
in fact rolled back or discontinued the system of directly elected Mayors. On the other
hand, states like Chhattisgarh and Madhya Pradesh, after having revoked this system,
have recently restored direct mayoral elections. Therefore, there remains a lack of
consistency across states and overtime in this regard.
For example, Madhya Pradesh introduced the direct election of mayors and municipal
chairpersons in 1998 to strengthen urban political leadership and accountability.
However, prolonged delays in municipal elections led to a large number of ULBs being
governed by state-appointed administrators. In this view and following a change in
the state government, in 2019, the system of direct mayoral elections was revoked
and replaced with an indirect system of mayoral selection. However, in 2025, the state
moved to restore direct mayoral elections by amending relevant sections in Madhya
Pradesh Municipality (Amendment) Ordinance, 2025, enabling people to directly
elect mayors and chairpersons in upcoming ULB polls. The term of the Mayor in a
Municipality also varies from 1 to 5 years across states. Annexure 2 highlights States
with direct election of the Mayor and their current status. URBAN REFORM AGENDA REPORT 6
S.
No
City Term
Method of
election
Role of Mayor and Executive Control
2 
Kolkata (West
Bengal) 
5 Years 
Indirect (Elected
by Councillors) 
• Follows the Mayor-in-Council
system. The Kolkata Municipal
Corporation Act, 1980 (Section 33
& 39); establishes the ‘Mayor-in-
Council’ system, vesting executive
power in the elected body rather
than the Commissioner.
• The Mayor has a cabinet of Elected
members who manage specific
portfolios (Water, Health, etc.).
Executive power is shared. 
3 
Bengaluru
(Karnataka) 
30 Months
(2.5
Years) 
Indirect (Elected
by Councillors) 
• The limited tenure of 30 months
is derived from Section 58 of the
Bruhat Bengaluru Mahanagara Palike
(BBMP) Act, 2020.
• Role is limited to presiding over
council meetings and ceremonial
functions with executive powers
vested with the Chief Commissioner
(Section 62).
• No power to appoint staff or
authorize independent spending
beyond discretionary fund. 
4 Delhi (MCD)  1 Year 
Indirect (Elected
by Councillors) 
• The term is extremely short (1 year)
as prescribed under Section 35 of
the Delhi Municipal Corporation
(DMC) Act,1957 (Amended 2022).
The post rotates annually among
reserved categories (Woman, Open,
etc.), preventing any continuity or
city leadership.
• Power rests with the Commissioner
(Section 59). 
5 
Bhopal
(Madhya
Pradesh) 
5 Years 
Direct (Elected
by Citizens) 
• Heads the Mayor-in-Council (Section
37, Madhya Pradesh Municipal
Corporation Act, 1956).
• Directly elected under Section 19
while the administrative control
(transfers, budget execution)
still largely rests with the State-
appointed Commissioner.  NITI Aayog 7
(iii) Weak revenue base and limited devolution of funds
ULBs face chronic fiscal constraints arising from weak own-source revenues, inadequate
and unpredictable financial devolution from states and high dependence on tied grants.
Limited revenue mobilisation reflects constrained fiscal autonomy, weak property tax
systems, lack of willingness to levy and collect user charges and undertake reforms.
These challenges are compounded by capacity gaps, institutional fragmentation, urban
informality and rapid spatial expansion, further suppressing own-revenue potential.
As a result, ULBs remain heavily dependent on State transfers, which are often erratic and
tied to specific schemes. Although State Finance Commissions (SFCs) are constitutionally
mandated to guide fiscal devolution to local governments, they are generally not
perceived to be effective. Delays in constitution, inadequate institutional support and
weak/ selective implementation of SFC recommendations have resulted in
ad hoc and
uncertain fiscal transfers, undermining the financial stability of city governments. In Box
2 the key challenges faced by SFCs are elaborated.
Box 2: The key challenges in the functioning of SFCs:
• Delayed and Irregular Constitution of SFCs: SFCs are often constituted with
significant delays, sometimes extending beyond three years, disrupting continuity
and weakening the fiscal devolution cycle. The absence of clear timelines and
preparatory arrangements further compounds this problem.
• Weak and Inconsistent Terms of Reference (ToRs): Core ToRs vary widely across
states and are not always aligned with constitutional provisions, while non-core
ToRs often lack clarity and relevance. This results in uneven quality and limited
comparability of SFC recommendations.
• Data Gaps and Limited Analytical Capacity: SFCs face persistent challenges due to
inadequate, unreliable, and untimely local government data, particularly at the ULB
level. Limited use of technology and analytical tools further constrains evidence-
based decision-making.
• Inadequate Institutional and Operational Support: Delays in office setup, insufficient
staffing, and frequent turnover of members undermine institutional memory and
analytical continuity. Budgetary constraints further restrict the effective functioning
of SFCs.
• Weak State follow-through and accountability: State governments often delay
or fail to implement SFC recommendations, with limited statutory requirements
for Action Taken Reports or public disclosure. This weakens accountability and
diminishes the credibility and impact of the SFC process.
SFCs face challenges across their lifecycle that directly affect their allocation and
advisory function: delays in constitution, limited technical and financial support to
their operation, the erasure of their institutional memory & operational knowledge
(once it is dissolved), and weak implementation of their recommendations. Annexure
3 summarises the various challenges. URBAN REFORM AGENDA REPORT 8
Low own-revenue generation and uncertain fiscal devolution have weakened the financial
health of ULBs, significantly containing their ability to access debt markets or raise capital
independently. Weak financial management practices, the absence of robust and creditworthy
accounting and reporting systems, and limited technical capacity for project identification,
prioritisation and preparation further restricts access to market-based financing. Collectively,
these constraints restrict cities’ ability to mobilise resources for undertaking large-scale, long-
term urban investments.
As a result, cities remain fiscally constrained in their ability to plan, invest in infrastructure,
and sustainably operate and maintain essential urban services.
(iv) Weak public service delivery
Administrative processes within ULBs and parastatals remain constrained by a lack of
standardization and alignment across departments. Multiple agencies provide basic services
in cities and follow separate protocols for planning, approvals, procurement, and monitoring,
making coordinated implementation difficult. These legacy processes slow project execution
and limit the ability of cities to respond efficiently to evolving service demands. Across urban
India, a wide range of functions that are conventionally associated with municipal governance
are carried out by state-controlled parastatal agencies rather than city governments.
Bengaluru is a case in point where the municipal corporation is responsible for a limited set
of local services such as solid waste management, maintenance of roads and street lighting.
Several other core urban functions like provision of primary education, health services and
operation of municipal markets remain outside its jurisdiction. Water supply and sewerage
are handled by the Bengaluru Water Supply and Sewerage Board. Land use planning is the
responsibility of the Bengaluru Development Authority. Rehabilitation of all declared slum
areas is undertaken by the Karnataka Slum Clearance Board. Transport within the city is
managed by the Bengaluru Metropolitan Transport Corporation that is under the State
Government. The instance of parastatals serving a city but reporting the state government is
found in a few other states. However, fragmentation of institutional authority across municipal
services is found in almost all other states. Thus, city governments continue to play little or no
role in key services like public transport, planning, water and sanitation. This fragmentation
weakens municipal authority, yet citizens continue to hold local governments accountable for
failures in service delivery, even in sectors over which they have no effective control.
Therefore, it is important to reassign core urban functions to elected city governments
through clear functional devolution, while integrating parastatal agencies under municipal
oversight. This would align authority, accountability, and resources at the city level, taking a
pragmatic step towards realising the objectives of the 74
th
Constitutional Amendment.
(v) Inadequate human resources and capacity constraints
ULBs face significant capacity constraints arising from acute human-resource shortages,
particularly in specialised domains such as urban planning, engineering, finance, and project
management. These gaps limit the ability of city governments to design, implement, and
manage complex urban programmes and infrastructure projects.
Capacity challenges are further exacerbated by administrative instability and service conditions.
Municipal Commissioners exercise executive authority but are frequently transferred, leading
to disruption of ongoing initiatives. A large proportion of functional positions within ULBs are
filled through deputation from state departments. While deputation addresses short-term
staffing needs, it reduces continuity and constrains the development of dedicated in-house
municipal expertise. NITI Aayog 9
Shortfalls in recruitment, high dependence on deputation, frequent transfers, and limited
investment in training collectively weaken institutional capability of ULBs. For efficient urban
governance, there is a need to focus on time-bound and quality project preparation and
delivery, improve contract management, and collection of revenues. Without requisite in-
house techniques and skills and poorly managed procurement processes, these functions are
not effectively managed.
Municipal functionaries are largely deprived of opportunities for continuous learning, skill
upgradation, and exposure to modern urban management practices. Building a professional,
well-trained, and stable municipal cadre is, therefore, essential for sustaining governance
reforms, strengthening institutional performance, and improving urban service delivery.
The governance challenges confronting city governments are most pronounced in India’s
largest urban centres, where growing scale, density, and institutional complexity heighten the
need for effective and coordinated urban governance. India’s 47 million-plus cities account
for nearly 1/3
rd
of India’s urban population and contribute to 60% of India’s GDP. Hence, not
only do they demand particular attention, but also have the basic institutional strength and
structure in place to undertake the reforms envisaged here. The following chapter provides
an overview of the million-plus cities, examining their demographic significance, institutional
structures, and prevailing service delivery mechanisms. URBAN REFORM AGENDA REPORT 10
Chapter 2: Overview of the Million-Plus Cities in India
2.1 India’s Million-Plus Cities: Scale and Significance
Urban areas in India are categorised into different segments based on population size by
different organisations including MOHUA, RBI, Census, etc. MoHUA categorises urban areas
into small towns (less than 50,000), medium towns (50,000 to less than 5 lakh), large towns
(5–10 lakh), and metropolitan cities (10 lakh and above). According to the Census of India, 2011,
towns and urban agglomerations together span an area of 102,252 sq. km and accommodate
a population of 37.71 crore.
Within this urban landscape, 46 Municipal Corporations with a population of one million or
more cover 10,926 sq. km and house 11.56 crore people; the detailed list is at Annexure 4.
Collectively, these million-plus Municipal Corporations account for 10.69 per cent of the total
urban area while accommodating 30.66 per cent of the urban population, clearly indicating
significantly higher population densities.
These million-plus cities play a critical role in the country’s economic landscape with high
concentration of economic activity, favoured destination for migration and driving national
productivity. They also face acute challenges related to infrastructure deficits, service delivery,
housing, mobility, environmental sustainability, and social inclusion that impact overall livability
and quality of life in these growth centres. However, it is pertinent to note that urban areas have
continued to expand in area, population and size of economy since 2011, suggesting that the
scale and intensity of urbanisation in these major cities is likely to be even greater at present. NITI Aayog 11
Figure 1: Municipal Corporation with over million-plus population
2.2 Institutional and Governance Structures in Million-Plus Cities
Governance structures across the cities reviewed, display considerable variations and
fragmentation. Multiple key institutions such as development authorities, water supply and
sewerage boards, transport corporations, and state-level urban agencies often function
outside the control of municipal governments, resulting in fragmented governance. The
absence of a unified command structure, with many agencies reporting directly to state
departments rather than to elected city government, weakens municipal oversight and dilutes
accountability.
In this context, the executive authority is concentrated with Municipal Commissioners, who
are subject to frequent transfers, while Mayors, despite being elected representatives of the
people, exercise limited statutory power and often serve short and uneven tenures. Together,
these institutional and leadership constraints shape the governance environment of India’s
million-plus cities and limit the effectiveness of urban decision-making.
2.3 Service Delivery Across Million-Plus Cities
The Report examined core municipal functions across 46 million-plus cities and identified
substantial variation in the institutional mechanisms for the delivery of six key urban services,
viz., water supply, sanitation, solid waste management, urban planning, fire services and bus
services.
(Source: Census of India, 2011) URBAN REFORM AGENDA REPORT 12
An analysis of the information contained in the websites of the 46 million-plus cities shows
that states such as Maharashtra and Gujarat have the most devolution of functions, with
city governments directly handling most of the above six services, especially water supply,
sanitation, solid waste management, and bus services. In contrast, Delhi and several cities
in Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Kerala, Uttar Pradesh, and Madhya
Pradesh rely more on state-level agencies, particularly for bus services and urban planning,
indicating that in many southern and northern states these key functions remain controlled
by the state rather than the municipal corporations.
Some states have frameworks for water supply, sanitation, and solid waste management
under municipal authority, while in others, similar services were managed largely by state-
controlled agencies or parastatal bodies.
These variations in service delivery models reflect underlying differences in state legislation,
institutional design, and the extent of functional devolution.
2.4 Fiscal Profile and Resource Flows in Million-Plus Cities
The Report on Municipal Finances, 2024, published by RBI, which covers 232 municipal
corporations across India, has been used as a basis to understand broad fiscal trends applicable
to million-plus cities. According to the Report, the principal sources of municipal revenue
include own-source revenue, inter-governmental transfers and others. Own source revenues
include tax, whereas non-tax revenues include fees and user charges. Inter-government
transfers include grants and devolutions.
Over time as a share of total revenue of municipal corporations, own tax revenues have
weakened, while own non-tax revenues have remained relatively stable but modest. Overall,
the trend points to growing dependence on intergovernmental transfers, highlighting
persistent structural weaknesses in own-source revenue mobilisation.
Figure 2: Composition of revenue Receipts of municipal corporations
(Source: Report on Municipal Finances, 2024 (RBI) NITI Aayog 13
The sustained decline in own-source revenue generation reflects not only structural
constraints but also limited effectiveness in the levy and enforcement of local taxes and user
charges. Legacy revenue systems exhibit multiple deficiencies, underscoring the need for
comprehensive reforms, supported by greater fiscal empowerment of city governments and
reinforced by a clear accountability mechanism.
Intergovernmental fiscal transfers to municipalities are guided by the recommendations
of State Finance Commissions (SFCs), which are constitutionally mandated to prescribe
principles for fiscal devolution every five years. As highlighted in Box 2 of chapter 1, the
functioning of SFCs is frequently undermined by delays in constitution, limited technical
capacity, and weak follow-through by State Government, resulting in partial or inconsistent
implementation of their recommendations. These persistent shortcomings point to the
need for more predictable, timely, and robust fiscal devolution frameworks to support the
increasing responsibilities placed on million-plus cities.
The impact of these constraints varies across states. As illustrated in Table- 2, SFC grants
to ULBs have increased both in absolute and per capita terms, albeit with wide inter-
state variation, indicating uneven fiscal devolution and differing levels of commitment to
strengthening municipal finances across states.
Table 2: SFC allocation to all ULGs of select states*Projected Urban Population is based on the projections made by MoHFW in the Technical Group Report
**SFC grants in FY 2013-14 for Haryana and Tamil Nadu are not allocations, but Actual Transfers to ULGs taken from their respective 5th SFC reports;
while for 2023-24 the figures are allocations
(Source: Committee Analysis)
More broadly, municipal access to market-based financing in India remains limited and largely
confined to a few major cities. Under the AMRUT programme, credit ratings were completed
for 468 ULBs in 2023-24, of which only about 162 achieved investment-grade status
3
, enabling
preparedness for borrowing. Nevertheless, municipal borrowing accounts for only around
2.4% in FY 2021-22 of total municipal receipts on average across the country.
3 PIB: Impact of Amrut on Infrastructure and Services, MoHUA, 08 Aug. 2024 URBAN REFORM AGENDA REPORT 14
Figure 3: Municipal corporations Borrowings from Financial Institutions
(Source: Report on Municipal Finances, 2024 (RBI)
The total municipal bond issuance between 2017 and 2025
4
, is only about 25, amounting to
a total of Rs. 3,579 crore. These are by 18 issuers, which include 1 parastatal and 17 cities,
with cities like Hyderabad, Indore, Ahmedabad, and Surat having multiple issuances. This
excludes issuance for Amravati, which was by Amravati APCRDA and under corporate bond
regulations. Details are in Annexure 7.
4 2017 chosen because SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015 created a dedicated regulatory structure
for municipal debts, and considering a large gap from 2013 when the last bonds were issued before that.
Box 3: Municipal Bonds Global Study
China
1
has issued 252 Local Government bonds, (cumulatively across several provinces,
autonomous regions, municipalities, and a corporation) in August 2025 alone, totalling
about RMB980.14 billion (roughly USD 142 billion).
The Tokyo Metropolitan Government
2
issues a bond every month, seeing 17 bond
issuances, between April 2023 and August 2025 alone, totalling about 3290 billion yen
(roughly USD 21.4 billion).
The city of New York
3
, had outstanding as on Q1 of FY 2026, outstanding General
Obligation debt (bonds of different rates & taxation types, but not including revenue
obligation / project-specific bonds) of about USD 45.9 billion. These are bonds where
repayments are guaranteed by the total revenue of the municipal government, and
while this is cumulative of issuances over a period of time, it is indicative of the robust
potential of the urban local government to raise market debt.
1 China Local Government Bond Market Report, China Government Debt Center; September 2025
2 10yr bond issuance and result, Tokyo Metropolitan Government; August 2024
3 NYC Bonds, New York City Comptroller; January 2026 NITI Aayog 15
2.5 Phased Approach: Start with the Million-plus cities
The Committee proposes a phased implementation of urban governance reforms, beginning
with million-plus cities, which typically have the following characteristics:
(i) Governance improvements in these cities will benefit a large majority of urban
population within and across states
(ii) These cities generally have established institutions of local government, a comparatively
higher number of functions devolved and functionaries capable of implementing
reforms
(iii) Financial management in these cities has benefited from earlier reform implementations
such as accrual-based double-entry accounting system and credit rating
The successful implementation of reforms in million-plus cities will have the necessary
demonstration effect and will provide smaller cities with templates and best practices for
faster adoption. A phased approach will enable methodical implementation, monitoring and
mid-course correction and improvement.
2.6 Proposed reforms in Million-plus cities
Further, the Committee recommends that state governments should start with reforms that
strengthen city-level governance. Empowered city governments will be more successful
in implementing other urban reforms such as planning, procurement and public private
partnership. The Committee proposes a focused reform agenda that emphasizes three main
issues:
(i) Establishing an empowered city government
• A directly elected Mayor with a 5-year term.
• An empowered Mayor-in-Council system to have broad-based leadership
• Ensuring timely and regular municipal elections and prohibit dissolution of city
government without oversight of the state legislature.
(ii) Delivering unified citizen services with responsibility
• Devolution of six key urban services (water supply, bus services, sanitation, solid
waste management, urban planning, and fire services) under the effective control of
city government.
(iii) Strengthening city finances by fiscal devolution and emphasis on generating own
source revenue
• Strengthening municipal fiscal autonomy by enhancing own-source revenue
generation and reducing dependence on transfers
• Ensuring timely constitution of State Finance Commissions and effective
implementation of their recommendations. URBAN REFORM AGENDA REPORT 16
Chapter 3: Moving towards effective and accountable city
government
3.1 Key Recommendations
This Report makes a set of recommendations aimed at establishing an empowered, accountable
and effective third tier of government. In framing these recommendations, due consideration
has been given to the instruments for operationalisation and the enabling conditions
required for adoption by states. Relevant constitutional provisions, statutory framework and
regulatory arrangement at both the Union and State levels have also been examined. Existing
best practices and institutional arrangements within India have been analysed and, where
appropriate, adapted to inform the design of proposed local-level reforms. Similarly, global
best practices have also been reviewed to assess the efficacy and relevance of the proposed
governance reforms.
The 74
th
Constitutional Amendment Act (CAA) already provides the necessary enabling
framework for strengthening city governments. As land and local government falls within
the purview of state governments, the recommendations focus on actions to be undertaken
by the States. The implementation would require suitable amendments to existing State
Municipal Act or any other relevant legislation, including the insertion of new provisions
where necessary. These statutory changes are intended to be supported by corresponding
revisions to municipal rules, bye-laws, and executive instructions to ensure consistency and
effective implementation. NITI Aayog 17
At the Central level, MoHUA plays a critical role as the enabler and nudging States to adopt
these reforms. The Model Municipal Laws issued by MoHUA needs to be revised and any
other associated guidelines to be aligned to reflect the proposed reforms. MoHUA also needs
to encourage and facilitate adoption during implementation.
The following are the major recommendations:
(I) Empowered political and executive leadership with a directly elected Mayor
having a fixed tenure
i. The Mayor to be directly elected
Genuine empowerment of the third tier of government requires a unified city governance
structure led by an empowered, directly elected Mayor, supported firstly by adequate
devolution of functions to the city government itself, and then by substantive allocation
of power & responsibilities to the mayor’s position as head of government (detailed in the
next chapter), fiscal strengthening, and eliminating institutional fragmentation, thereby
ensuring clear accountability for urban outcomes. This, in turn, necessitates deeper political
and institutional reforms that strengthen elected municipal leadership and enable decision-
making in accordance with the principle of subsidiarity. Box-4 outlines global best practices
regarding the office of the Mayor, including the selection, functions, etc. URBAN REFORM AGENDA REPORT 18
Box 4: The office of Mayor – a global study
Globally, the governance patterns across cities revolves around the Mayor as the executive
head and the Municipal Council (elected representatives/Councillors) as the legislative and
policy-making body. The distinction lies in the empowerment and method of electing the
Mayor.
A central comparative insight is that strong mayoral cities share three foundational features:
(a) executive authority (consolidated in a single elected leader); (b) control over key urban
functions; and (c) fiscal or administrative autonomy for long-term planning.
While there is wide variance in some cases Mayors are powerful and have a lot of influence
on how the cities are run, as also on their economic activities. In many cases, Mayors are
more powerful than the provincial governors or have similar authority. Mayors go on to
occupy high national level positions because of the work they have done in their cities. A
short note on the authority and responsibility that vests in the Mayors of some major cities
around the world is at Annexure – 5. This also makes them accountable for how the city is
managed.
While the specific institutional designs vary, cities such as New York, London, Tokyo, Mexico
City, Buenos Aires and Johannesburg demonstrate a clear pattern of a strong mayoral
system enabling coherent policy direction, fiscal control, and unified urban management.
Mayoral powers in the US are diverse, depending on the state and the city’s charter (form
of government). However, some of the strong mayoral systems include New York, Chicago
and Los Angeles. The mayor is the clear chief executive, elected directly by the citizens
and holding significant administrative and budgetary control. The Mayor of the New
York City is known for having immense executive power over the city’s vast budget and
municipal agencies, including the Police department
1
. In Chicago and Illinois, the Mayor has
traditionally held significant influence, including strong control over appointments and the
legislative agenda
2
. The Mayor in Los Angeles and California holds strong budgetary and
executive control, though their power is balanced by the City Council.
The Mayor of London is a directly elected executive head with substantial strategic and
operational authority. The Mayor exercises control over city-wide transport through
Transport for London (TfL), including buses, metro, and major roads, and plays a central
role in spatial planning, housing policy, and environmental regulation
3
. The Mayor prepares
and proposes the Greater London Authority (GLA) budget, levies select city-wide taxes
and charges, and appoints heads of key functional bodies, ensuring strong political
accountability for metropolitan governance.
Cities in China follows a strongly centralized, Communist party led governance model.
While, mayors are the administrative heads of the city government, real political power
often lies with the Communist Party Secretary of the city. On the whole, mayors are
powerful administrators but subordinate to the Party leadership
4
.
1 Fine, E., & Caras, J. (2013). Twenty-Five Years of the Council-Mayor Governance of New York City: A History of the Council’s
Powers, the Separation of Powers, and Issues for Future Resolution, 58 N.Y.L. Sch. L. Rev. (2012–2013).
2 WBEZ (2021). How It Works: Chicago’s City Council and the Mayor’s Office.
3 Mayor of London: powers and functions (Greater London Authority, May 2024).
4 Zheng et al. (2024). “Mayors’ promotion incentives and subnational-level GDP manipulation,” Public Administration Review NITI Aayog 19
To strengthen democratic accountability and political leadership in municipalities, the
Committee proposes that the Mayor be directly elected by the voters of the entire municipal
area. This would require State Governments to amend their respective municipal laws to
provide for direct election of the Mayor (Chief Councillor) and Deputy Mayor (Deputy Chief
Councillor) conducted under the direction, control, and supervision of the State Election
Commission in accordance with applicable laws and procedures.
Article 243R of the Constitution reproduced in Box 5 provides the enabling constitutional
framework for States to determine the composition and mode of election of municipal leaders.
Recommendation:
• State governments should amend the State Municipal Acts or other relevant legislation to
provide that the post of Mayor shall be filled by a person chosen through direct election
by all voters whose names are entered in the electoral rolls of the municipal area. Such a
framework ensures that the Mayor derives a direct democratic mandate from the citizens,
rather than indirectly through elected councillors.
• The Model Municipal Law, 2003, issued by MoHUA needs to be revised to clearly provide
for the Mayor to be directly elected.
Box 5: Article 243R of the Indian Constitution
“Composition of Municipalities
(1) Save as provided in clause (2), all the seats in a Municipality shall be filled by persons
chosen by direct election from the territorial constituencies in the Municipal area and
for this purpose each Municipal area shall be divided into territorial constituencies
to be known as wards.
(2) The Legislature of a State may, by law, provide-
(a) for the representation in a Municipality of-
(i) persons having special knowledge or experience in Municipal administration;
(ii) the members of the House of the People and the members of the Legislative
Assembly of the State representing constituencies which comprise wholly
or partly the Municipal area;
(iii) the members of the Council of States and the members of the Legislative
Council of the State registered electors within tile Municipal area;
(iv) the Chairpersons of the Committees constituted under clause (5) of article
243S:
Provided that the persons referred to in paragraph (i) shall not have the
right to vote in the meetings of the Municipality;
(b) the manner of election of the Chairperson of a Municipality.” URBAN REFORM AGENDA REPORT 20
ii. Term of Mayor to be co-terminus with the term of the city government
Article 243U of the Constitution states that every municipality shall continue for a term of five
years with no reference to the tenure of the Mayor of the municipality. Thus, it was incumbent
upon the States to prescribe the tenure of the Mayor of a municipality in their respective
State Municipal Laws.
The Model Municipal Law, 2003, provides that the term of office of the Mayor shall be
coterminous with the duration of the municipal council.
Recommendation:
• State governments should amend the State Municipal Acts or other relevant legislation to
state that the Mayor holds office for a term of 5 (five) years that is co-terminus with the
duration of the municipal council
5
.
iii. The Mayor should be the head of the city government with overall executive
authority
Article 243(P) of the Constitution defines key terms such as “Municipality” and their related
territorial and institutional scope but does not define the office of the Mayor or designate
Mayor as the head of the city government. The allocation of executive authority and the role
of the Mayor are, therefore, left to States to prescribe in their respective municipal legislations.
Under the Model Municipal Law, 2003, executive power is exercised by an Empowered
Standing Committee, with the Chief Councillor
6
serving as its presiding officer. It further
provides that the Empowered Standing Committee may, through a written order, delegate
specific power or functions to the Chief Councillor or to the Chief Municipal Officer (Municipal
Commissioner), subject to prescribed conditions.
For effective urban governance, executive authority within a Municipal Corporation must be
clearly vested in the Mayor, with the Municipal Commissioner functioning under the Mayor’s
oversight and the designated reporting authority. At the same time, internal institutional
arrangements must support collective decision-making and prevent undue concentration
of authority by providing for a system of Mayor-in-Council, which has been explained in
detail in the following sections. It is recommended to necessitate a clear and unambiguous
delineation of roles, powers, and accountability among the Mayor, Mayor-in-Council, Municipal
Commissioner, subject-specific committees, and the General Body of elected councillors.
Recommendation:
• It is recommended that the Mayor be designated as the head of the city government with
clearly defined executive powers. State governments should amendthe State Municipal
Acts or other relevant legislation to clearly designate the Mayor as the head of the city
government and clearly define the roles and responsibilities of the Mayor and the Municipal
Commissioner.
• The Model Municipal Law, 2003, issued by MoHUA needs to be revised to provide clarity and
explicitly institutionalise mayoral authority over key administrative oversight mechanisms.
5 Municipal Council is used in a generic manner in this report for brevity, and includes the Councils present in various forms of Urban
Local Governments in India, such as Notified Area Councils, Town Panchayats, Municipal Councils / Nagar Nigams. Municipalities /
Nagarpalikas and Municipal Corporations / Mahanagar Palikas.
6 The Model Municipal Law mentions Chief Councillor which under Section 2(16) means (i) in relation to a Municipal Corporation, the
Mayor (ii) in relation to a Municipal Council, the Municipal Chairperson, and (iii) in relation to a Nagar Panchayat, the Municipal President; NITI Aayog 21
iv. Ensuring timely and regular municipal elections for effective city governance
The Constitution mandates that elections of city government
7
be completed before the
expiry of their five-year term. However, in the absence of clearly prescribed and enforceable
timelines for key stages of the electoral process, municipal elections are routinely delayed
across the States. The Compendium of Performance Audits on the Implementation of the 74
th

Constitutional Amendment Act published by the Comptroller and Auditor General (CAG) of
India in November 2024, notes that elections were delayed in over 61% of ULBs across 17
States. Divergent and non-uniform procedures adopted by state governments have further
exacerbated the situation with recurring delays, undermining democratic continuity at the
city level. To uphold public enfranchisement in urban governance both in letter and spirit, the
Committee proposes amendments to the relevant provisions.
Recommendation:
• State governments should amend the State Municipal Acts
8
or other relevant legislation
to mandate regular time-bound election of city governments
• State governments should amend the State Municipal Acts or other relevant legislation
to include mandatory legislative sanctions for dissolution of ULB within a prescribed time
period , thereby strengthening the stability of local democratic institutions
• The Model Municipal Law, 2003
9
, issued by MoHUA needs to be revised to provide
a uniform legislative template for States to ensure timely elections and to prohibit
dissolution of municipal corporation.
(II) Introduce an empowered Mayor-in-Council system to provide strong,
accountable city-level governance
i. Introduce Mayor-in-Council system
With increasing complexity of urban management, the Committee proposes, an empowered
Mayor-in-Council system may be institutionalised as the apex executive arrangement within
municipal government. By allocating sectoral responsibilities among selected councillors,
this system promotes functional specialization, avoids concentration of authority, reduces
bureaucratic delays, and enhances transparency in municipal functioning. Under this model,
executive authority over key domains including urban planning, service delivery, finance, and
human resources, would be exercised collectively by the Mayor and selected councillors.
Comparative global experiences, demonstrate that such collective executive systems, when
led by strong Mayors, enable more coherent city-level planning and effective service delivery.
For the Mayor-in-Council system to function effectively, statutory provisions for the selection,
allocation of powers and duties, and mandating regular, time-bound meetings is essential.
Currently, neither the Constitution nor the State municipal laws prescribe the functioning of
such a system. Wherever these Councils are in place
10
, in the absence of mandatory timelines
for convening meetings of executive council following municipal election, there are delays
7 While the term ‘city government’ is used for focus and consistency in this report, the 74th Amendment to the Constitution uses the term
Local Self Government.
8 Relevant Election Rules in the Municipal Acts (various types) in keeping with Article 243U, 74th Constitutional Amendment
9 Section 71 of Model Municipal Law, 2003
10 In Kolkata alone, and in the States of Tripura, Madhya Pradesh and Chhattisgarh, with the Mayor as head and stipulated number of
Councillors performing important functions as department heads, with sanctioning and in terms of approving contracts and revising the
budget grants. Compendium of Performance Audits on the Implementation of the 74th Constitutional Amendment Act, 1992: Landscape
across India Volume I, 2024, Page 22 https://cag.gov.in/uploads/StudyReports/SR-Compendium-067346fdd7000e9-76046538.pdf URBAN REFORM AGENDA REPORT 22
with weakened executive oversight. The CAG of India notes
11
that an incredible 61% of city
governments in the 17 States that were audited did not have an elected Council at the time
of the audit. The analysis also shows that the average delays in municipal elections in those
states were 22 months, i.e. nearly two years of cities being run without elected governments.
The highest in the audit was 4.5 years, while India has had cities being run for decades by the
executive. In many states, there is no legal deadline to convene the first council meeting after
elections.
While Article 243(W) and 243(S) of the Constitution enable the devolution of functions to
municipalities and provides for the constitution of municipal committees, they do not explicitly
recognise the Mayor-in-Council as the municipal corporation’sapex executive body.
The Model Municipal Law currently, states that “In every Municipality, there shall be an
Empowered Standing Committee.
12
” In functional terms, the Empowered Standing Committee,
performs a role analogous to a Mayor-in-Council, with Mayor acting as principal political
executive of the municipality.
Within this enabling constitutional framework, the States can amend their Municipal Acts
to explicitly institutionalise the Mayor-in-Council system, clearly defining their composition,
powers, responsibilities, and procedures including mandatory timelines for meetings, to
strengthen executive decision-making and accountability at the city level.
Recommendation:
• To strengthen decentralised democracy at the ULB level, States should replace Standing
Committees with a Mayor-in-Council system, complemented by functional subject-matter
committees. State governments should amend the State Municipal Acts or other relevant
legislation to explicitly recognise the Mayor-in-Council as the municipal corporation’s apex
executive body with clear roles and responsibilities for the Council. States should prescribe
a mandatory timeline for convening the first meeting of the Council, ideally within 15 days
of declaration of election results.
• The Model Municipal Law, 2003, issued by MoHUA needs to be revised to reposition the
Mayor-in-Council system as the default recommended model for urban governance.
ii. Setting up of broad-based and decentralised governance structures
Portfolio-Based Governance: Each member of the Mayor-in-Council handles a specific
department
The Committee proposes that, to strengthen broad based and decentralized governance
within municipalities, a portfolio-based system may be instituted within the Mayor-in-Council,
under which each member is assigned responsibility for a specific functional department.
Clear allocation of portfolios enables functional specialization, accelerates decision-making,
reduces inter-departmental overlaps , and enhances coordinated service delivery within the
city government. To support effective oversight, the Mayor should be empowered to appoint
the heads of each department, subject to clearly defined procedures and safeguards.
In addition, the constitution of functional subject-specific committees, such as those for
finance, health, urban planning, public works, water supply, solid waste management, and
11 Compendium of Performance Audits on the Implementation of the 74th Constitutional Amendment Act, 1992: Landscape across India
Volume I, 2024, Page 35 https://cag.gov.in/uploads/StudyReports/SR-Compendium-067346fdd7000e9-76046538.pdf
12 Any State Government may choose to adopt the Mayor-in-Council System. The Policy Options Papermay be referred to for the
corresponding legislative scheme. NITI Aayog 23
sanitation etc., would enhance administrative efficiency, sectoral oversight, and policy
coherence. These committees should operate as the executive authority for the respective
functional area, supporting the Mayor-in-Council. State Legislatures should accordingly
provide for mandatory constitution of such subject committees through clearly defined
composition, roles, and responsibilities.
A well-structured committee system is integral to deepening decentralised and participatory
urban governance, by creating institutional forums for elected representatives, municipal
officials, and citizens to jointly deliberate, plan, and monitor service delivery at sub-city
levels. Such arrangements help in aligning decision making with local priorities and improve
responsiveness in urban administration.
The Committee recommends that Zonal Committees at the level of administrative wards
should be made mandatory. Ward(s) Committee and Area Sabha at the level of councillor
constituency/ ward or below may be as decided by the respective State.
The Model Municipal Law, 2003, provides for the constitution of Ward Committees, as
the primary mechanism for decentralised governance at the ward level. However, it does
not explicitly provide for Zonal Committees or mandate an intermediate tier between the
Municipal Corporation and Ward Committees. Consequently, the establishment, structure,
and powers of Zonal Committee have been left to the discretion of State Governments,
resulting in uneven adoption and varied institutional designs across States.
Recommendation:
• State governments should amend the State Municipal Acts or other relevant legislation
to expressly empower the Mayor with the authority to appoint heads of the departments,
with suitable safeguards and procedural clarity to ensure transparency and accountability.
• State governments should amend the State Municipal Acts or other relevant legislation
to mandate the formation of Zonal Committees to ensure decentralised decision-making
at sub-city levels. States may also establish Ward Committees or Area Sabhas to increase
citizen participation at the grassroots.
• MoHUA should institutionalise portfolio-based governance by issuing detailed guidelines
under a revised Model Municipal Law that mandates the allocation of clearly defined
sectoral portfolios to members of the Mayor-in-Council. At the same time, the Model
Law should retain a framework of collective and delegated executive authority, rather
than vesting executive power unambiguously in a single individual executive head. The
updated Model Law should also mandate the formation of a Zonal Committee within
large cities.
(III) Parastatals and SPVs delivering essential urban services should directly
report to the city government
The 74
th
Constitutional Amendment Act, 1992, proposed that the following 18 functions
included in the Twelfth Schedule be devolved to ULBs:
• Urban planning, including town planning.
• Regulation of land-use and construction of buildings.
• Planning for economic and social development.
• Roads and bridges. URBAN REFORM AGENDA REPORT 24
• Water supply for domestic, industrial, and commercial purposes.
• Public health, sanitation, conservancy, and solid waste management.
• Fire services.
• Urban forestry, protection of the environment and promotion of ecological aspects.
• Safeguarding the interests of weaker sections of society, including the handicapped
and mentally retarded.
• Slum improvement and upgradation.
• Urban poverty alleviation.
• Provision of urban amenities and facilities such as parks, gardens, playgrounds.
• Promotion of cultural, educational and aesthetic aspects.
• Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
• Cattle pounds; prevention of cruelty to animals.
• Vital statistics, including registration of births and deaths.
• Public amenities including street lighting, parking lots, bus stops and public
conveniences.
• Regulation of slaughterhouses and tanneries
The Twelfth Schedule provided enabling provisions for the functional devolution to the
ULBs. States have been following different methods both for the devolution of functions
as well as instrumentalities for the discharge of these functions. While functions such as
solid waste management and urban amenities have been devolved by most states, several
critical functions, including urban planning, roads, water and sanitation, regulation of land
use and buildings, and economic planning, continue to be discharged by State governments
or by their parastatal and special purpose agencies, outside municipal control. In practice,
these arrangements have resulted in fragmented responsibilities across state departments,
parastatals, and development authorities, diluting municipal authority and weakening
accountability for urban outcomes.
In this context, the Committee has focused its analysis on a set of five core functions as a sub-
set of all the 18 functions recommended to be devolved. These five were chosen as a sample
and given their criticality in the smooth functioning of the city and citizen well-being. These
include Water Supply, Bus Services, Sanitation, Solid Waste Management and Fire Services.
Based on a review of these five functions, the Committee identified service delivery patterns
to fall into the following three broad categories:
• Category 1 - The services are entirely delivered by the city government. Some examples
of this are:
a. Solid waste management in most of the cities
b. Sanitation services in many of the cities
c. Water supply, urban planning, and public bus services in the cities of Gujarat and
Maharashtra NITI Aayog 25
• Category 2 - The services were delivered by SPVs/ parastatals whose jurisdiction is
limited to the city alone, but it reports to the State Government. Examples of this are:
a. Water supply and sanitation in Bangalore, Chennai and Hyderabad
b. Urban planning in most states except those of Maharashtra, Gujarat and Kerala
• Category 3 - The service is delivered by a state-level SPVs/ parastatals whose jurisdiction
is the entire state. Examples of this are
a. Fire and bus services in most cities
Annexure 6 presents more details on the above.
Categories 2 and 3 present the following major impediments to effective service delivery by
ULBs:
• The benefits of coordinated delivery, which can often lead to cost and resource economies
and also enable more efficient service, are not leveraged;
• There is no accountability of city governments, and people find it difficult to access
state-level leaders for some of their basic services, for which they should be able to
access their local leaders; and
• Specific needs of a particular city are not taken into account, more so when the concerned
service delivery entity has a state-level responsibility.
It is recommended to shift responsibility for the delivery of these services to the city
government, promoting greater accountability of the local leadership, better coordination in
the delivery of these services, ensuring economies of scale, and improved grievance redressal
mechanisms.
Recommendation:
The Committee recommends, State Government ensure that agencies delivering municipal
services within a city shall function under the administrative control of the municipal
corporation within whose jurisdiction such services are provided. State Governments should
amend their laws and rules to enable the creation of city-specific subsidiaries or divisions
within State departments or parastatal agencies for million-plus cities, with such entities
administratively accountable to the respective city governments while retaining a technical
reporting relationship with the State. In this context, suggestion with regard to each category
of service delivery mechanism is given below:
• In cases where the services are already being delivered by the local city government,
no change is proposed except to build capacity to deliver services more efficiently and
cost-effectively. Efforts should also be made to improve cost recovery, if necessary by
leveraging private sector efficiencies through well-structured PPP arrangements, that
will help reduce outgo from the public budget.
• In cases where a particular service is delivered by a State SPVs/ parastatals, whose
jurisdiction is limited to that city itself, it is recommended that the responsibility be
devolved by the state government to the city government. This can be achieved by
the Board being chaired by the Mayor and having representatives from the council, or
other well-known city leaders, as well as the municipal commissioner, as members of the
Board. There could be a state-level representative also, but the reporting of the entity
should be to the city government. Annual subsidies that were being paid to this entity URBAN REFORM AGENDA REPORT 26
by the State Government should be transferred to the city government for the specific
purpose of providing that service.
• In case of State SPVs/ parastatals providing services across the State, it is recommended
to create a city-specific subsidiary/division for large cities. Where a single state-level
PSU/other entity is delivering services to all the cities in the state, it is recommended
that for all the million-plus cities in the state, a separate subsidiary/division be created
for each city. The subsidiary CEO/divisional head and the entire staff of that subsidiary/
division should administratively report to the city government, with a reporting line
to the state department only for technical matters. Funds for the subsidiary/division
should be transferred to the local government who should use them for the specific
purpose only.
(IV) Strengthening State Finance Commissions (SFCs) for streamlining fund
transfers to ULBs
Articles 243-I and 243-Y of the Constitution institutionalized fiscal decentralization
by mandating the formation of a State Finance Commission (SFC) every five years, to
recommend principles for resource sharing and strengthening local fiscal capacities.
The SFCs are, therefore, central to empowering local governments and deepening fiscal
federalism. However, as outlined in Box-2 in Chapter 1, the functioning of SFCs across
States
has been constrained by persistent institutional and operational weaknesses.
These deficiencies have weakened the fiscal relationship between State and local
governments, limiting effective devolution and undermining medium and long-
term financial planning at the city level. Successive Union Finance Commissions have
highlighted these concerns with the XV Finance Commission, in particular, underscoring
the continued non-compliance by States with the constitutional mandate and thus, linking
a portion of local government grants to states’ compliance with SFC related requirements
as a key reform measure.
Recommendation:
• State governments should amend the State Municipal Acts or other relevant legislation
to ensure the constitution of SFCs at least 2 years before the start of the next award
period, thereby providing SFCs with a minimum term of approximately 18 months.
• State governments should amend the State Municipal Acts or other relevant legislation
to stipulate a defined timeline for the preparation and tabling of the Action Taken Report
(ATR) in the Legislative Assembly within 6 months of SFC report submission or along
with tabling of the state budget (whichever is later).
• State governments should amend the State Municipal Acts or other relevant legislation
to mandate State Finance department to publish, at the beginning of the FY and along
with the state budgets -
»ULG-wise annual allocation of SFC grant amount for the current FY
»Details of ULG-wise SFC grant release and expenditure of the previous FY
• The Model Municipal Law, 2003, issued by MoHUA needs to be revised to mandate
monitoring, reporting, disclosure, and institutional support to strengthen the credibility,
transparency, and impact of the SFC process. NITI Aayog 27
Chapter 4: Implementation of the reforms: Nudging states
The Committee observes that implementation of the proposed reforms will involve several
stakeholders and actions at multiple levels. By and large, the States will be the primary actors
to take this forward. Suggestions in this regard are given below:
• MoHUA to update the Model Municipal Law in line with the changes proposed in this
Report.
• MOHUA may organise regional workshops to start a debate, garner consensus, and
nudge states to adopt the new Model Municipal Law.
• MOHUA to undertake a comprehensive capacity-building program to ensure that the
local bodies can assess the required capacities
13
and the officials have the competencies
to discharge the functions transferred to them. Support can be given in terms of templates
and dynamic models for capacity assessments and continual training programmes in
lines of iGOT for States.
• MoHUA may link its various schemes with the commitment and plan by the State
Governments to implement these recommendations.
13 As per their size, geo-physical context and manner of administration of functions and services. Capacities can be met through hiring or
contracting or sharing of services, as proposed in the Municipal Shared Services model of the 15th Finance Commission and MoHUA URBAN REFORM AGENDA REPORT 28
4.1 Roles and Responsibilities for Implementation
Table 3 summarises the recommendations of the Committee along with the proposed
instruments for operationalisation and the agencies/organisations responsible for their
implementation.
Table 3: Recommendations of the Committee
Purpose of
Reform
Recommendation
Instrument for
Operationalization
Responsibility for
Operationalization
Recommendation 1. Empowered Political and Executive leadership with directly elected
Mayor with fixed tenure
Election, Term,
and Executive
Power of the
Mayor
The Mayor to be directly
elected
Change in respective
State Municipal Act
(SMA)
Revised model
municipal law by
MoHUA
State Government,
GoI
Term of Mayor to be 5
years
Change in respective
SMA
State Government
The Mayor should be
the head of the city
government with overall
executive authority
Change in respective
SMA.
Revised model
municipal law by
MoHUA
State Government,
GoI
Timely and
regular municipal
elections for
effective city
governance
Time bound election of
Municipal Corporation
Change in the
relevant State
Legislature
Revised model
municipal law by
MoHUA
State government,
GoI
Include mandatory
legislative sanction for
dissolution of ULB within a
prescribed time period
Change in the
relevant State
Legislature
Revised model
municipal law by
MoHUA
State government,
GoI NITI Aayog 29
Purpose of
Reform
Recommendation
Instrument for
Operationalization
Responsibility for
Operationalization
Recommendation 2: Introduce an empowered Mayor-in-Council system to provide strong,
accountable city-level governance
Setting up of
board based
governance
structure at ULB
level with focus
on Portfolio-based
Governance
Introduce the Mayor-in-
Council system instead of
Standing Committee with
meeting at least once in 15
days
Change in the
respective SMA
Revised model
municipal law by
MoHUA
State Government,
GoI
Each member of the
Mayor-in-Council handles a
specific department of city
government
Change in the
respective SMA
Revised model
municipal law by
MoHUA
State Government,
GoI
The Mayor holds the
authority to appoint the
chairperson of departments
of city government
Change in the
respective SMA
State Government
Zonal Committee (at the
level of administrative
wards) should be made
mandatory
Change in the
respective SMA
Revised model
municipal law by
MoHUA
State Government,
GoI URBAN REFORM AGENDA REPORT 30
Purpose of
Reform
Recommendation
Instrument for
Operationalization
Responsibility for
Operationalization
Recommendation 3: Parastatals and SPVs delivering essential urban services should directly
report to the city government
Unified and
Accountable
service delivery
Where services are already
being delivered by the local
city government, no change
is required, and things can
continue as they are.
No change--
Where a particular service
is delivered by a State
SPVs/ parastatals, whose
jurisdiction is limited
to that city itself, it is
recommended that the
responsibility be devolved
by the state government to
the city government
Change in the
reporting structures,
either through change
in state legislation
or change in the
memorandum and
articles of association
of the PSU as may be
relevant
State Government
In case of State SPVs/
parastatals providing
services across the State, it
is recommended to create
a city-specific subsidiary/
division for each of the
million-plus cities
- Have the head of the
subsidiary /divisional head,
along with their entire staff
administratively report
to the city government,
with a reporting line to the
state department only for
technical matters.
- Funds for the subsidiary/
division should be allocated
by the state government to
the local government, who,
in turn, should use them to
subsidize the respective
subsidiaries/divisions, as
needed.
- Agencies delivering
urban planning and related
services should also be
brought under the City
Government
Administrative
orders to be issued
by the concerned
department or the
Board of Management
of the respective
entities
State Government NITI Aayog 31
Purpose of
Reform
Recommendation
Instrument for
Operationalization
Responsibility for
Operationalization
Recommendation 4: Mandate the strengthening of municipal finances through regular and
effective State Finance Commissions (SFCs)
Timely formation
and operation
of SFCs with
systematic
transfer of funds
Performance-linked
devolution of Funds:
Intergovernmental transfers
must be complemented by
stronger local fiscal effort
Change in the
relevant State
Legislature
Revised model
municipal law by
MoHUA
State Government,
GoI
Improve the state
governments’
response to SFCs
recommendations
Annual reporting on the
implementation of SFC
recommendations
Change in the
relevant State
Legislature
Revised model
municipal law by
MoHUA
State Government,
GoI URBAN REFORM AGENDA REPORT 32
Annexure 1: Constitution of the committee NITI Aayog 33
Annexure 2: States with direct election of the Mayor and
their current status
S.No. State
Direct Mayoral
Election (Since)
Revoked by State (In) Current Status
1
Madhya
Pradesh
Yes (1998) Yes (2019)
Direct (restored
in 2025 through
ordinance)
2 Chhattisgarh Yes (1998) Yes (2019)
Direct (restored
in 2024 through
Ordinance)
3 Jharkhand Yes (2011)NoDirect
4 Uttarakhand Yes (1994)NoDirect
5 Uttar Pradesh Yes (1994)NoDirect
6 Bihar Yes (2022)NoDirect
7 Haryana Yes (2018)NoDirect
8 Odisha Yes (2018)NoDirect
9 Tamil Nadu Yes (1996) Yes (2019)Indirect
10
Himachal
Pradesh
Yes (2012) Yes (Around 2017-18) Indirect
11 Rajasthan Yes (2009)
Yes (2014 &
reaffirmed in 2019)
Indirect
Source: Secondary Data - Committee analysis  URBAN REFORM AGENDA REPORT 34
Annexure 3: A summary of common challenges
encountered in different stages of an SFC’s lifecycle
S.
No.
Components Sub-ComponentsChallenges identified
1. Formation of SFCs 
a.
Timing of SFC
Formation 
• Timely Constitution of
SFCs
• Stabilization of SFCs
• Syncing SFC with FC
• Delays in SFC constitution stretch
up to 36 months – continuity is not
maintained.
• The award period of SFCs is not
synchronized with UFCs, causing
challenges in effective fiscal
decentralization.
• Lack of data on timeline for
formation
• Inadequate preparation before
formation of SFC (human resource
and infrastructure)
b.
Terms of
Reference
(ToR) 
• Core ToRs –
allocation function
• Non-core ToRs –
advisory function
• The core ToRs of SFCs regarding
fund devolution to local bodies are
variable and not always consistent
with constitutional provisions
• The scope of non-core ToRs
(advisory function of SFCs) has not
kept with emerging needs of local
governments, especially in urban.  
c.
Embedding
cost/
requirements
of SFC set-up
and operation  
• Support in the form
of infrastructure and
human resource  
• Delays in office space allocation,
inadequate provision of necessary
office equipment, and inconsistent
membership of both staff and
members causes interruptions and
delays in the SFC’s operations. 
2. Operation of SFCs and uptake of recommendations 
a.
SFC
Membership 
• Diversification
and Continuity in
Membership 
• Statutory non-compliance and
delays in appointments to SFC
• Disruption due to membership
turnover  NITI Aayog 35
S.
No.
Components Sub-ComponentsChallenges identified
b.
Data
availability for
SFCs 
• Data Collection
Methods
• Use of IT and
rofessional expertise
in data analytics for
SFCs
• Lack of a unified, credible and
timely source for local government
data leading to SFCs relying on
multiple (sometimes inauthentic)
sources.
• Time consuming and less efficient
methods of data collection after
the SFC is constituted.
• Information provided by local
bodies can be incomplete, and
contains prima facie errors.
c.
Submission of
SFC Report 
• Time taken for
submission of SFC
Report  
• Delay in submission of SFC report
due to multiple factors relating to
capabilities and adequate support –
on average, SFC reports have been
submitted 13 months later than the
original timeline provided in the
terms of reference (ToR) 
3. Response of state governments to SFCs’ recommendations 
a.
Submission of
Action Taken
Reports (ATRs) 
• Landscape for
submission of ATRs 
• Lack of legal provisions stipulating
timely ATR submission. 
• Severe delays or inaction in tabling
ATRs (56% of state government
take more than 12 months after
submission of report by the SFC).
• ATRs are unavailable in public
domain 
b.
Data
availability for
SFCs
• Implementation
of SFC
recommendations
• A huge quantum of
recommendations rejected with or
without reason.
• Lack of adherence to 12
th

FC recommendations for
minimal modifications in SFC
recommendations.  URBAN REFORM AGENDA REPORT 36
Annexure 4: Cities governed by Municipal Corporations
with a population of 10,00,000 and above as per the
Census of India, 2011
S. No. Name District (State) Area (sq. km)Population
1 Greater Mumbai Mumbai (Maharashtra) 603.00 12442373
2
Delhi Municipal
Corporation
Delhi (Delhi) 561.27 11034555
3
Greater Bangalore
(BBMP)
Bangalore (Karnataka) 709.96 8443675
4
Greater Hyderabad
(GHMC)
Hyderabad (Andhra
Pradesh)
694.09 6615348
5 Ahmedabad Ahmedabad (Gujarat) 468.92 5577940
6 Chennai Chennai (Tamil Nadu) 175.00 4646732
7 Kolkata Kolkata (West Bengal) 185.00 4496694
8 SuratSurat (Gujarat) 335.82 4467797
9 Pune Pune (Maharashtra) 249.29 3124458
10 Jaipur Jaipur (Rajasthan) 484.64 3046163
11 LucknowLucknow (UP) 348.80 2817105
12 Kanpur Kanpur Nagar (UP) 266.74 2765348
13 Nagpur Nagpur (Maharashtra) 217.56 2405665
14 IndoreIndore (MP) 130.17 1964086
15 Thane Thane (Maharashtra) 128.23 1841488
16 BhopalBhopal (MP) 285.88 1798218
17 Visakhapatnam
Visakhapatnam
(Andhra Pradesh)
513.61 1728128
18 Pimpri Chinchwad Pune (Maharashtra) 184.72 1727692
19 PatnaPatna (Bihar) 107.62 1684222
20 Vadodara Vadodara (Gujarat) 166.23 1670806
21 Ghaziabad Ghaziabad (UP) 220.00 1648643
22 Ludhiana Ludhiana (Punjab) 159.37 1618879
23 AgraAgra (UP) 120.57 1585704
24 Nashik Nashik (Maharashtra) 259.13 1486053 NITI Aayog 37
25 Faridabad Faridabad (Haryana) 204.00 1414050
26 MeerutMeerut (UP) 141.94 1305429
27 Rajkot Rajkot (Gujarat) 110.84 1286678
28 Kalyan-Dombivli Thane (Maharashtra) 57.13 1247327
29 Vasai-Virar City Thane (Maharashtra) 319.39 1222390
30 Varanasi Varanasi (UP) 82.10 1198491
31 Srinagar
Srinagar (Jammu &
Kashmir)
278.10 1180570
32 Aurangabad
Aurangabad
(Maharashtra)
138.50 1175116
33 Dhanbad Dhanbad (Jharkhand) 207.00 1162472
34 Amritsar Amritsar (Punjab) 136.00 1132383
35 Navi-Mumbai Thane (Maharashtra) 108.68 1120547
36 Prayagraj (Allahabad) Allahabad (UP) 70.05 1112544
37 Howrah Howrah (West Bengal) 51.74 1077075
38 Ranchi Ranchi (Jharkhand) 175.12 1073427
39 Jabalpur Jabalpur (MP) 129.20 1055525
40 GwaliorGwalior (MP) 173.68 1054420
41 Coimbatore
Coimbatore (Tamil
Nadu)
105.60 1050721
42 Vijayawada
Krishna (Andhra
Pradesh)
59.69 1034358
43 Jodhpur Jodhpur (Rajasthan) 75.50 1033756
44 Madurai Madurai (Tamil Nadu) 51.96 1017865
45 Raipur Raipur (Chhattisgarh) 147.50 1010433
46 KotaKota (Rajasthan) 527.03 1001694
A
Total of Municipal Corporations with a
population exceeding 10,00,000
10,926.37 11,56,05,043
B
Total of 474 Urban Agglomerations and 5,697
Towns in all classes
102,252 37,71,06,125
C
C = (A/B * 100)% of Municipal Corporations
with a population exceeding 10,00,000 to
total of 474 Urban Agglomerations and 5,697
Towns
10.69% 30.66%
Source: Census of India, 2011 - Committee analysis  URBAN REFORM AGENDA REPORT 38
Annexure 5: Mayor’s Powers: Global Examples
1. United States of America
Mayoral powers in the US are diverse, depending on the state and the city’s charter (form of
government). However, some of the strong mayoral systems include New York, Chicago and
Los Angeles among others. The mayor is the clear chief executive, elected directly by the
citizens and holding significant administrative and budgetary control.
Core Powers:
The mayor directs the administration, manages city departments, prepares and executes the
city budget, and has the power to appoint and remove department heads. Crucially, they
often possess veto power over the City Council’s ordinances and resolutions.
Examples:
New York City (NYC): The Mayor is known for having immense executive power over the
city’s vast budget and municipal agencies, including the Police department.
Chicago, Illinois: The Mayor has traditionally held significant influence, including strong control
over appointments and the legislative agenda.
Los Angeles, California: The Mayor holds strong budgetary and executive control, though
their power is balanced by the City Council.
2. South Korea
In South Korea, the local government heads of major territorial units (cities, metropolitan
cities, provinces) are either mayors (for cities) or governors (for provinces). Mayors serve as
the chief executives of their respective local governments, elected for a four-year term.
Core Executive and Administrative Authority
All South Korean mayors, regardless of city size, possess fundamental powers derived from
the Local Autonomy Act. They officially represent the city in all legal and inter-governmental
matters. They control and execute all local government affairs and administer city services.
They are also responsible for implementing city policies, managing the local administration,
and overseeing regional development planning within the framework of national law.
Mayors prepare and manage the city’s annual budget, although it must be approved by
the local council. They handle affairs that are legally delegated to the city by the central
government.
Expanded Powers of Metropolitan and Special City Mayors
Mayors of large cities designated as Special Cities (like Seoul) or Metropolitan Cities (like
Busan, Incheon) hold authority comparable to a Provincial Governor, giving them vastly
expanded scope. These mayors are effectively the chief executive of a unit equivalent to a
province in status, placing them in the highest tier of local leadership.
They have significant autonomy and resources for large-scale urban planning, major
infrastructure development, and managing complex urban systems (transportation,
environment, etc.). Especially the Mayor of Seoul, due to the city’s importance, often sits at
a level equivalent to a national cabinet minister and has considerable influence in national
decision-making circles. NITI Aayog 39
3. South Africa
Most South African local governments have an Executive Mayor, who is the head of the
executive committee, which makes most of the municipality’s policy decisions. He acts
as the political leader, overseeing the preparation of the budget and the administration’s
performance.
The system is an evolution of the council-manager model, placing political executive authority
in the mayor and the executive committee.
4. France
The French mayor holds a unique dual function, acting as both the head of the local council
and an agent of the central state. He chairs the municipal council and prepares and executes
the council’s deliberations. He is responsible for the management of municipal staff, budget,
and local services.
As an agent of the State, he performs specific state functions, such as acting as a civil officer
(officiating at civil marriages, registering births/deaths). He also serves as an officer of the
judicial police in their commune, enforcing general safety measures under the authority of the
central state’s representative (the Prefect).
5. Germany
In most German states, the Bürgermeister (mayor) is directly elected and acts as the head of
both the council and the local administration. The mayor is typically the chief administrative and
political head of the municipality. The mayor leads the municipal administration, managing its
daily operations and being responsible for executing the council’s resolutions. This contrasts
with earlier models where the council appointed a separate professional administrator.
He often chairs the city council meetings and has a vote, but his main power comes from their
strong executive position he holds in managing the bureaucracy.
6. China
China follows a strongly centralized, Communist party led governance model. While, mayors
are the administrative heads of the city government, real political power often lies with the
Communist Party Secretary of the city.
Mayors oversee city-wide economic planning, infrastructure, transportation, and public
services and implement national and provincial policies.
Their responsibilities include managing urban economic development and budgeting,
executing state-directed urbanization and infrastructure projects, crisis management (public
health, disasters), environmental regulation and social welfare programs.
On the whole, mayors are powerful administrators but subordinate to the Party leadership.
7. United Kingdom
The city government is mostly council-led, with only some cities having directly elected
mayors. URBAN REFORM AGENDA REPORT 40
The strongest example is the mayor of London, who controls transport, policing, environment,
development, etc. The mayor of London is also responsible for strategic planning.
In cities outside London the mayors have powers over transport, housing, skills, and regional
development. They are responsible for infrastructure and transport strategy, economic
regeneration, planning permission oversight, climate and environmental policies. Etc.
Overall the powers of the mayors in UK vary widely, with the mayor of London being highly
influential but still sharing power with councils and the national government.
8. Brazil
Brazil has very strong municipal autonomy. Mayors hold significant executive power.
They control local policing (municipal guard), education, health services, and urban planning.
They are direct counterparts to the city council but with strong control over budget and
administration.
Their responsibilities cover primary education, basic healthcare, public transportation,
housing, land use planning and large-scale urban development. They are also responsible for
public safety enforcement at municipal level.
Overall, Brazilian mayors are among the most autonomous and powerful in the world for local
governance. NITI Aayog 41
Annexure 6: Allocation of responsibility for delivering six
services
• Category 1 (C1)- Authority for service delivery devolved to the city level.
• Category 2 (C2)- An institutionalised state level PSU working for the city reporting to the
state.
• Category 3 (C3)- A state level body working for all the cities of the state.
S.
No.
City
Water
Supply
Bus
Services
Sanitation
Solid Waste
Management
Urban
Planning
Fire
Services
Category*
1. Mumbai C1 C1 C1 C1 C1 C1
2. Delhi C1 C1 C1 C1 C2 C1
3. Bangalore C2 C2 C2 C1 C2 C3
4. Hyderabad C2 C3 C2 C1 C2 C3
5. Ahmedabad C1 C1 C1 C1 C2 C1
6. Chennai C2 C3 C2 C1 C2 C3
7. Kolkata C1 C3 C1 C2 C2 C3
8. Surat C1 C1 C1 C1 C2 C1
9. Pune C1 C1 C1 C1 C2 C3
10. Jaipur C2 C3 C2 C1 C2 C3
11. Lucknow C1 C2 C1 C1 C2 C3
12. Kanpur C1 C2 C1 C1 C2 C3
13. Nagpur C1 C1 C1 C1 C1 C1
14. Indore C1 C2 C1 C1 C2 C1
15. Thane C1 C3 C1 C1 C2 C1
16. Bhopal C1 C1 C2 C1 C2 C1
17.Vishakhapatnam C1 C3 C2 C1 C2 C1
18.Pimpri-Chinchwad C1 C1 C1 C1 C2 C3
19. Patna C1 C3 C1 C1 C2 C3
20. Vadodara C1 C1 C1 C1 C2 C1 URBAN REFORM AGENDA REPORT 42
21. Ghaziabad C1 C3 C1 C1 C2 C3
22. Ludhiana C1 C3 C1 C1 C2 C3
23. Agra C1 C2 C1 C1 C2 C3
24. Nashik C1 C2 C1 C1 C1 C1
25. Faridabad C1 C2 C1 C1 C2 C2
26. Meerut C1 C3 C1 C1 C2 C3
27. Rajkot C1 C3 C1 C1 C2 C3
28. Kalyan-Dombivli C1 C2 C1 C1 C2 C1
29. Vasai Virar City C1 C1 C1 C1 C1 C1
30. Varanasi C1 C2 C1 C1 C2 C3
31. Srinagar C3 C3 C1 C1 C2 C3
32. Aurangabad C1 C2 C1 C1 C1 C1
33. Dhanbad C1 C3 C1 C1 C2 C3
34. Amritsar C1 C3 C1 C1 C2 C3
35. Navi Mumbai C1 C1 C1 C1 C2 C1
36.Prayagraj (Allahbad) C1 C3 C1 C1 C2 C3
37. Howrah C1 C3 C1 C1 C2 C3
38. Ranchi C2 C3 C1 C1 C2 C3
39. Jabalpur C1 C1 C1 C1 C2 C3
40. Gwalior C1 C3 C1 C1 C2 C3
41. Coimbatore C1 C3 C3 C1 C1 C3
42. Vijayawada C1 C3 C1 C1 C2 C3
43. Jodhpur C3 C3 C1 C1 C2 C1
44. Madurai C1 C3 C1 C1 C3 C3
45. Raipur C1 C2 C1 C1 C2 C3
46. Kota C3 C2 C1 C1 C2 C1
Source: The information was collated from the websites of respective urban local bodies and parastatal
bodies. NITI Aayog 43
Annexure 7: Details of Municipal Bond Issuances (from
2017 till November 2025)
S.
No.
City NameState
Year of
Issuance
Issue Size
(in crores)
1 Pune CorporationMaharashtra 2017 200
Amravati APCRDA (Issued
under corporate bond securities
regulations)
Andhra Pradesh 2018 2,000
2 Vishakapatnam Corporation Andhra Pradesh 2018 80
3 Greater Hyderabad Corporation Telangana 2018 200
4 Greater Hyderabad Corporation Telangana 2018 195
5 Indore CorporationMadhya Pradesh 2018 139.9
6 Bhopal CorporationMadhya Pradesh 2018 175
7 Ahmedabad CorporationGujarat 2019 200
8 Surat CorporationGujarat 2019 200
9 Greater Hyderabad Corporation Telangana 2019 100
10 Lucknow CorporationUttar Pradesh 2020 200
11 Ghaziabad Nagar NigamUttar Pradesh 2021 150
12 Vadodara CorporationGujarat 2022 100
13 Indore CorporationMadhya Pradesh 2023 244
14 Pimpri Chinchwad Corporation Maharashtra 2023 200
15 Ahmedabad CorporationGujarat 2024 200
16 Vadodara CorporationGujarat 2024 100
17 Rajkot CorporationGujarat 2024 100
18 Agra CorporationUttar Pradesh 2025 50
19 Prayagraj CorporationUttar Pradesh 2025 50
20 Varanasi CorporationUttar Pradesh 2025 50
21 Pimpri Chinchwad Corporation Maharashtra 2025 200
22 Gandhinagar CorporationGujarat 2025 25
23 Greater Chennai Corporation Tamil Nadu 2025 200
24 Surat CorporationGujarat 2025 200
25 Bhavnagar CorporationGujarat 2025 25
Total3579
Source: SEBI, India 2025, https://www.sebi.gov.in/statistics/municipalbonds.html
Notes:
1. 2017 was chosen to take into consideration SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015
which created a dedicated regulatory structure for municipal debts, and considering a large gap from 2013 when the
last bonds were issued before that.
2. Issuance for Amravati is excluded in numbering since it was by the Amravati APCRDA a parastatal and under the
corporate bond regulations, so technically outside municipal bonds regulation. URBAN REFORM AGENDA REPORT 44
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debt-profile/debt-profile/ NOTES NOTES NITI Aayog 49