🏛️ Polity & GovernanceMAINS · GS2.10

NITI Aayog urges directly elected city mayors

A framework for India's million-plus cities, asking states to build empowered city governments led by a fixed-tenure mayor.

What happened

NITI Aayog released a report titled "Moving Towards Effective City Government — A Framework for Million-Plus Cities" on 25 April 2026 at the India Habitat Centre, New Delhi.
It was released by the Union Minister of Housing & Urban Affairs, with Urban Development Ministers from more than ten states in attendance — a signal that the reform is aimed at the state governments who actually control municipal law.
The report's core diagnosis: India's largest cities are held back by fragmented institutional arrangements, limited devolution of powers, weak financial autonomy and diffused accountability.
Its headline prescription is a directly elected Mayor with a fixed tenure, backed by an empowered Mayor-in-Council, so that one accountable office leads the city rather than power being split across a part-time mayor, a state-appointed commissioner and several parastatals.
The framework ties urban reform to the macro goal of Viksit Bharat 2047 and a $30-trillion economy, on the logic that India cannot become a developed economy while its growth engines — its cities — remain administratively weak.
A NITI Aayog Member noted the report drew on extensive deliberations with states and on global best practices in municipal governance.

Background & context

To read this report correctly, an aspirant must place it in the constitutional story of urban local government. Indian cities are governed under a framework set by the 74th Constitutional Amendment Act, 1992, which gave municipalities — Municipal Corporations, Municipal Councils and Nagar Panchayats — formal constitutional status for the first time. The same amendment inserted the Twelfth Schedule, which lists 18 functions (such as urban planning, water supply, public health, slum improvement and urban poverty alleviation) that states may devolve to municipalities. The crucial word is "may": the 74th Amendment created the institutions but left the actual transfer of functions, funds and functionaries — the famous "3 Fs" — to the discretion of state legislatures. Three decades on, that discretion is exactly the problem the NITI Aayog report names.

Because urban local government is a State subject, the everyday law that runs a city is the relevant State Municipal Act, not a central statute. To nudge states toward a common standard, the Ministry of Housing & Urban Affairs (MoHUA) maintains a Model Municipal Law — a template the Centre offers states to adopt or adapt. The report asks MoHUA to update this model law and to use incentives to encourage states to amend their own Acts in line with it. This is the institutional lever: the Centre cannot legislate municipal structure directly, so it works through a model law plus fiscal incentives, while the binding change has to be made by each state assembly.

The report's "million-plus cities" framing is deliberate. India has a large and growing set of cities with populations above one million; these concentrate the bulk of urban economic output and face the sharpest pressures on water, sanitation, transport and housing. Confining the framework to this class keeps the reform focused on the cities where weak governance carries the highest national cost, rather than diluting it across thousands of smaller towns.

For Prelims

Issuing body: NITI Aayog (National Institution for Transforming India) — an executive think-tank set up by a Cabinet resolution on 1 January 2015, replacing the Planning Commission; it has no constitutional or statutory status and the Prime Minister is its Chairperson. The report itself is advisory, not binding.
Report title: "Moving Towards Effective City Government — A Framework for Million-Plus Cities."
Released by / venue: the Union Minister of Housing & Urban Affairs, at the India Habitat Centre, New Delhi, on 25 April 2026.
Recommendation 1 — Leadership: a directly elected Mayor with a fixed tenure, supported by an empowered Mayor-in-Council (an executive cabinet drawn from the elected council, on the parliamentary-cabinet model).
Recommendation 2 — Functions: bring water supply, sanitation and public transport under the city government, so the elected city is responsible for the services residents judge it by.
Recommendation 3 — Finance: strengthen municipal finances through own-source revenues, more empowered State Finance Commissions, and market-based financing such as municipal bonds.
Recommendation 4 — Restructuring: bring parastatal agencies (specialised state bodies such as water boards and development authorities) under the oversight of the city government, ending the split between the elected municipality and unelected agencies.
Implementation path: states amend their Municipal Acts; MoHUA updates the Model Municipal Law and provides incentives; a phased approach is recommended.
Constitutional anchor: the 74th Constitutional Amendment Act, 1992, and its Twelfth Schedule (18 functions). Sister provisions to remember: Article 243Q (constitution of municipalities), 243W (powers and functions), 243ZA (elections via the State Election Commission), 243Y (the State Finance Commission), and the District/Metropolitan Planning Committees under Articles 243ZD–243ZE.
State Finance Commission: a body each Governor must constitute under Article 243-I (for panchayats) and 243-Y (for municipalities) to recommend how state revenues are shared with local bodies — not to be confused with the central Finance Commission (Article 280).

What it is NOT. The report does not create any new law or office — it is an advisory NITI Aayog document, and a directly elected mayor can become reality only when a state assembly amends its Municipal Act. The proposed Mayor-in-Council is not the same as the more common commissioner-led system, in which a state-appointed IAS Municipal Commissioner holds executive power while the elected mayor is largely ceremonial. The reform is also not the rural 73rd Amendment story (panchayats, Eleventh Schedule, 29 functions); this is the urban 74th Amendment track (municipalities, Twelfth Schedule, 18 functions). And the State Finance Commission invoked here is the local-body body under Article 243-Y, not the Union Finance Commission under Article 280.

The full set to carry. Three tiers of municipal bodies under the 74th Amendment: Municipal Corporation (large urban area), Municipal Council / Municipality (smaller urban area), and Nagar Panchayat (a transitional area moving from rural to urban). Two competing executive models for a city: the commissioner-led model (executive power with the appointed commissioner) versus the mayor-in-council / directly elected mayor model (executive power with the elected political head) that this report backs. And the financing toolkit the report names: own-source revenue, State Finance Commission transfers, and municipal bonds.

Why it matters

The problem the report addresses is the structural weakness of Indian city government. In most large cities the elected mayor serves a short, rotating term and holds little executive power, while real authority sits with a state-appointed Municipal Commissioner and a scatter of parastatal agencies — a water board here, a development authority there, a transport corporation elsewhere. The result is an accountability vacuum: when a city floods or its transport fails, no single elected office can be held responsible, and the residents who vote cannot easily punish the people who actually decide. A directly elected mayor with a fixed tenure and a Mayor-in-Council is designed to close that gap by concentrating executive power in an office that voters choose and can remove at the next election.

The fiscal dimension is just as central. Indian municipalities raise very little of their own revenue and depend heavily on state and central grants, which leaves them unable to plan, borrow or invest for the long term. By pushing own-source revenues, empowered State Finance Commissions and municipal bonds, the report is trying to give cities the financial autonomy that political autonomy alone cannot deliver — a city government that controls neither its functions nor its funds cannot be held meaningfully accountable for either. Linking all of this to Viksit Bharat 2047 makes the political case that urban reform is not a municipal housekeeping issue but a precondition for national economic ambition: the cities are where the growth, the jobs and the emissions are concentrated, so how they are governed shapes the whole development trajectory.

For Mains

Anchor

A question on strengthening urban local government or "effective devolution to the third tier" can be built directly around this framework — the directly elected mayor, the Mayor-in-Council, and the integration of water, sanitation and transport under one accountable city government.

Problematisation

The report itself names the gap: three decades after the 74th Amendment, devolution of functions, funds and functionaries remains incomplete because the amendment left the "3 Fs" to state discretion, leaving fragmented leadership, weak fiscal capacity and diffused accountability in city governance.

Way-forward

Use the four prescriptions as a ready-made way-forward set: a directly elected fixed-tenure mayor with a Mayor-in-Council; integration of core services under the city government; municipal finance reform via own-source revenue, State Finance Commissions and municipal bonds; and bringing parastatals under city oversight — implemented through an updated Model Municipal Law and state Act amendments.

Substantiation

Cite the report as recent official evidence that the 74th Amendment's promise of empowered urban local self-government remains unfulfilled, and that the Centre's own apex think-tank is pressing states to deepen devolution.

Position

It reflects the government's stated stance that strong, accountable city governments are a precondition for Viksit Bharat 2047 and a $30-trillion economy — framing urban governance reform as a national economic priority, not a local administrative one.

Deploys into: devolution of powers and finances to urban local bodies; the unfinished agenda of the 74th Constitutional Amendment; municipal finance and own-source revenue; accountability and leadership in city government; urbanisation and the cities-as-growth-engines argument.

NITI Aayog · 2026-04-25 · PRID 2255581 · PIB source ↗