India's Urban Governance Crisis: The Unfulfilled Promise of the 74th CAA
Why in News?
Recent reports, including a CAG Audit (2024), have exposed a severe governance crisis in Urban India. Despite contributing nearly 70% of India's GDP, cities are plagued by dysfunctional services and crumbling infrastructure, primarily due to the systematic weakening of Urban Local Bodies (ULBs) by state governments, violating the spirit of the 74th Constitutional Amendment Act (CAA).
1. Prelims Focus: Core Facts & Concepts
Memorize these key terms and data points for objective-type questions.
74th Constitutional Amendment Act (CAA), 1992: Granted constitutional status to Urban Local Bodies (ULBs).
12th Schedule: Contains 18 functions (like urban planning, water supply, slum improvement) meant to be devolved to ULBs.
Key Institutional Mechanisms:
State Election Commission (SEC): To conduct elections for ULBs.
State Finance Commission (SFC): To recommend the distribution of finances between the state and ULBs.
District Planning Committee (DPC): To consolidate plans from ULBs and Panchayats.
Metropolitan Planning Committee (MPC): To prepare draft development plans for metropolitan areas.
Alarming Data Points (CAG Audit 2024):
ULBs control, on average, only 4 out of 18 functions.
61% of ULBs in 17 states lack an elected council.
Only 5 states have directly elected mayors.
Just 10 states have constituted DPCs.
ULBs face an average shortfall of ₹1,606 crore due to partial fund releases.
A 42% expenditure-revenue gap forces ULBs to spend only 29% of funds on development.
2. Key Themes & Terminologies for Mains (GS Paper II - Governance)
A. The Grand Bargain vs. The Ground Reality: Unfulfilled Federalism
The 74th CAA was envisioned as a landmark in democratic decentralization, aiming to empower cities as the "third tier" of government.
Constitutional Vision: To make ULBs "institutions of self-government" (Article 243W).
State-Level Strangulation: State governments have consistently resisted ceding power.
Parastatal Agencies: Bodies like Water Boards, Development Authorities (e.g., DDA, MMRDA) have been created, taking away core functions like planning and water supply from ULBs.
Financial Control: States control the purse strings, with SFC recommendations often ignored or partially implemented.
Administrative Control: Inability to hire and fire their own staff makes ULBs subservient to state bureaucracies.
B. The Democratic Deficit: Weakening Local Democracy
A functioning democracy requires elected representatives accountable to the people.
Superseded ULBs: The fact that 1,600 ULBs are without elected councils means citizens have no direct say in local governance.
Indirect Mayoral Elections: In most states, mayors are elected by councilors, are subject to frequent no-confidence motions, and have short tenures, preventing strong, stable leadership.
C. The Financial Crisis: From Self-Government to Beggar Municipalities
Without financial autonomy, administrative autonomy is meaningless.
Weak Own Source Revenue (OSR): Inability to revise property tax rates (the main source of own revenue) keeps ULBs financially crippled.
Dependence on Devolution: Erratic and incomplete transfers from states make long-term planning impossible.
Consequence: The 42% revenue gap leads to a vicious cycle of poor service delivery → citizen dissatisfaction → unwillingness to pay taxes → further revenue decline.
3. Connecting to Broader UPSC Syllabus
GS Paper I (Society): Link urban governance to issues of migration, slum formation, and urban poverty. Poor governance exacerbates social inequalities and creates exclusionary cities.
GS Paper III (Economy & Environment):
Economy: Efficient cities are engines of economic growth. Dysfunctional infrastructure (clogged drains, traffic jams) reduces productivity and hampers ease of living and doing business.
Environment: Ineffective solid waste management and water pollution are direct outcomes of poor urban governance, linking to topics of sustainable development.
Essay Paper: Can be used in essays on "The Crisis of Indian Federalism," "Democracy at the Grassroots: A Mirage?" or "India's Cities: Engines of Growth or Epicenters of Chaos?"
4. Government Initiatives & A Way Forward (Positive Angle for Answers)
While the crisis is deep, several initiatives provide a roadmap for reform.
Major Initiatives (to be quoted as positives)
National Urban Digital Mission (NUDM): Aims to create a digital infrastructure for transparency and efficiency.
Smart Cities Mission: Promotes integrated planning and use of technology.
Ease of Living Index & Municipal Performance Index: Encourages competition and data-driven governance.
Swachh Bharat Mission (Urban): Focused on outcomes in sanitation and waste management.
Pathways to Reform (Solutions for Mains Answers)
Administrative Autonomy: Grant ULBs full control over human resources. Enact a Uniform Staffing Policy.
Democratic Strengthening: Ensure regular, timely elections for all ULBs. Move towards directly elected mayors with longer, fixed tenures.
Functional Empowerment: Operationalize DPCs and MPCs as mandated to ensure integrated regional planning.
Fiscal Empowerment: Make SFC recommendations legally binding. Grant ULBs autonomy to set property tax rates and explore municipal bonds.
Capacity Building: Invest in training for municipal councillors and staff to handle complex urban challenges.
5. Sample Questions for Practice
Prelims (MCQs)
Consider the following statements regarding the 74th Constitutional Amendment Act:
It mandates the constitution of a State Finance Commission every five years.
The 12th Schedule of the Constitution lists the functions to be entrusted to Urban Local Bodies.
It provides for the direct election of the Mayor in all Municipal Corporations.
Answer: (a)
Statement 1 is correct: The 74th CAA mandates the constitution of SFC every five years.
Statement 2 is correct: The 12th Schedule contains 18 functions for ULBs.
Statement 3 is incorrect: The mode of mayor election is determined by state law; direct election is not mandated by the constitution.
- The Metropolitan Planning Committee (MPC), as per the 74th CAA, is responsible for:(a) Auditing the accounts of all Urban Local Bodies in a metropolitan area.(b) Preparing a draft development plan for the metropolitan area as a whole.(c) Conducting elections for the municipal corporations in a metropolitan region.(d) Resolving disputes between different Urban Local Bodies.
Answer: (b)
Mains (GS Paper II)
"The 74th Constitutional Amendment Act remains a promise half-fulfilled, with urban local bodies in India functioning more as agents of the state rather than as self-governing institutions." Critically examine.
Discuss the major findings of the CAG Audit (2024) on urban local bodies. What structural reforms are needed to achieve the true objectives of the 74th Constitutional Amendment Act?
Conclusion
For a UPSC aspirant, the urban governance crisis is a quintessential issue that sits at the intersection of polity, governance, and development. The gap between the constitutional vision of the 74th CAA and the grim reality revealed by the CAG audit provides a powerful narrative to critique India's implementation deficit. Understanding this topic is crucial not just for an exam, but for grasping one of the most critical challenges that will define India's trajectory in the 21st century. Empowering cities is not an option; it is an imperative for sustainable growth and democracy.
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