Why India's Cities Cannot Govern Themselves
India's urban crisis is a question of who controls the money, the decisions and the accountability
When a street floods in Bengaluru, the people who live on it know exactly what has happened. Their homes are damaged, their commute stops, and someone has to pay to clean up the mess.
What is much harder to know is who can actually fix it.
The drain may be maintained by one authority. The road above it may belong to another. Land-use decisions were taken elsewhere, and a project to repair the system may need approvals or funding from the state. A resident can complain to an elected representative, but the representative may not control the officials, the budget or the agency responsible for the work.
This is not an argument that city governments would automatically do a good job if given more authority. It is an argument that India has made it unusually difficult for residents to know whom to hold responsible, and unusually easy for each level of government to point somewhere else.
We discuss India’s cities as a problem of civic sense, planning or corruption. All three matter. But underneath them is a more basic political question: who gets to govern the city, and with whose money?
A city can be wealthy while its government is poor
A city contains valuable land, successful companies, expensive homes and millions of people paying taxes. It does not follow that its local government has enough reliable revenue or freedom to spend it on drains, footpaths, waste collection and water.
The Reserve Bank’s 2024 report on municipal finances studied budget data from 232 municipal corporations, covering more than 90% of corporations in the country. Its conclusion was revealing: most corporations’ own-source revenues were insufficient to meet even their revenue expenditure, and dependence on transfers and grants from higher levels of government remained substantial.
That does not mean every city has no money or that every transfer is a problem. Transfers are necessary: poorer places need support, and some services benefit people beyond municipal boundaries. A city can also have a budget surplus while still underinvesting in maintenance or capital works. The question is whether the city has predictable resources and enough discretion to plan for its obligations.
A drain needs maintenance every year. A treatment plant needs operators and electricity. A footpath needs repair long after the ribbon cutting. Those obligations are less attractive than a project whose opening can be credited to a minister, especially when the local institution responsible for maintenance has limited control over its finances.
The result is not mysterious. We can build visible infrastructure while leaving the less visible system around it underfunded.
The 74th Amendment was a beginning, not a transfer of everything
India has already tried to address this problem. The 74th Constitutional Amendment created a constitutional framework for urban local government. It recognised municipalities, elections, ward committees and planning institutions. The Twelfth Schedule lists functions that can be entrusted to municipalities.
But the details of powers and responsibilities are largely left to state legislation. As the Maharashtra municipal administration’s explanation makes clear, state legislatures determine the powers municipalities receive. The list of functions is not the same thing as an automatic handover of staff, money and control.
That distinction matters. A city can be assigned responsibility for a service while another agency controls the land, a third employs the relevant engineers and the state controls the money. On paper, the function is local. In practice, authority is scattered.
A recent NITI Aayog urban reform report describes substantial variation across states in how services are assigned, including cases where transport or planning relies heavily on state-level agencies. That variation is useful. It means there is no single Indian municipal model, and we can compare arrangements rather than assume all cities suffer from precisely the same problem.
It also means a new constitutional amendment is not the only possible starting point. States can devolve functions, finance and personnel under existing frameworks. A stronger constitutional guarantee may eventually be needed to protect local power from being withdrawn, but we should not use the difficulty of constitutional change as an excuse to ignore what state governments can do now.
Bengaluru is not one office
Consider the everyday journey of a Bengaluru resident. Water, roads, buses, metro rail, land-use planning and drainage are not all governed through a single city office. Some decisions must be coordinated across a metropolitan area; others need to be taken in a neighbourhood. Treating a metropolis as if one ward or one municipal corporation could solve every problem would be just as misleading as pretending the state should decide every broken drain.
The difficult task is to connect those levels. A neighbourhood needs a voice in local priorities. The city needs control over routine services and a budget that matches them. The metropolitan region needs coordination on transport, water, land use and drainage that cross municipal boundaries. The state has a legitimate role in setting rules, equalising resources and protecting rights.
Bengaluru has also undergone a reorganisation of its governing structure. A new map of corporations and authorities, however, does not by itself answer the real question. Who appoints the people who run each service? Who can raise and spend money? Who resolves a conflict between agencies? Can voters identify an official with the power to act?
Those are the tests by which any reorganisation should be judged.
Why would the state give up power?
Devolution sounds like an administrative reform. It is actually a political bargain.
State governments control important appointments, funds and agencies. Giving cities genuine power changes who can claim credit, who can award contracts, and who decides where resources go. It also creates another political centre that may be controlled by a rival party. These are not minor details to be solved after a technical committee finishes its report. They are the reason the report may never be implemented.
Urban voters are not a single constituency either. A renter, a homeowner, a street vendor, a factory owner and a resident of an informal settlement can want different things from a city. A coalition for stronger municipal government will not emerge simply because all of them are frustrated with traffic.
And the claim that a city generates wealth therefore all its tax revenue should stay there is too simple. Cities depend on surrounding regions for workers, food, water, land, energy and markets. Redistribution across a state is legitimate. What needs scrutiny is whether the rules are transparent and whether a city retains enough predictable resources to provide the services on which that wider economy also depends.
The goal is not to turn cities into islands. It is to give them a meaningful say in the systems they are expected to operate.
What real devolution would look like
First, assign functions clearly. Residents should be able to see which institution is responsible for a road, a drain, a bus route or a building permit. Where multiple agencies must cooperate, someone should have the authority to resolve disputes and publish a common plan.
Second, match authority with money and people. A city cannot maintain infrastructure on an announcement. It needs predictable transfers, the ability to raise appropriate local revenue, trained staff and transparent accounts. Property tax is an obvious place to improve administration, but raising it fairly requires accurate records, credible appeals and visible service delivery. Poor households need protection from poorly designed charges.
Third, make local elections and oversight meaningful. A councillor who cannot influence a budget or question the officials delivering a service is an inadequate substitute for local government. Publish ward-level spending, service standards, project timelines and reasons for delays. Let residents see not only what was promised, but who had authority to deliver it.
Fourth, retain metropolitan coordination. More local control does not mean every municipality should independently solve a river basin or a regional transport network. Those systems cross boundaries. They need a regional institution with a clear mandate, representation from constituent local governments and public accountability for its decisions.
Fifth, protect against local capture. Local politicians, landowners and contractors can be as self-interested as state-level actors. Devolution without audits, open contracting, independent appeals and meaningful access for renters and informal residents can simply move the problem closer to home.
What should citizens do meanwhile?
I have become sceptical of the idea that individual acts of civic heroism can substitute for a functioning city government. A resident who clears a drain or fills a pothole may help neighbours today. That effort deserves respect. But the next drain still needs a budget, a maintenance schedule and someone accountable for it.
There is a difference between helping people survive a broken system and claiming the workaround has repaired it. Quick commerce, private water tankers, gated security and citizen cleanups can make life easier for some people. They can also make it easier for those with resources to exit the demand for public services, while everyone else remains dependent on them.
Political organising is slower and less satisfying. It requires residents, businesses and civic groups to agree on specific changes: a predictable municipal revenue stream, an empowered elected council, timely elections, clear ownership of a service. It may take years. That is not a reason to dismiss immediate workarounds; it is a reason not to confuse them with the destination.
India’s cities are not failing because their residents lack the ability to complain. They are failing, in part, because the institutions expected to respond often lack the authority, resources or incentives to do so.
A wealthy city should be able to maintain its own drains. To get there, it first needs a government capable of making a decision about them.