NITI Aayog Report Calls For Empowered City Governments To Drive Urban Growth

New Delhi, Apr 28 (KNN) Union Minister for Housing and Urban Affairs Manohar Lal Khattar on Saturday released a report titled ‘Moving Towards Effective City Government – A Framework for Million-plus Cities’ by NITI Aayog at the India Habitat Centre. 

The report underscores the central role of urbanisation in achieving India’s long-term development goals, including the vision of Viksit Bharat by 2047 and a USD 30 trillion economy. 

It highlights that cities are key drivers of economic growth, innovation, and employment, but face structural challenges such as fragmented governance, limited financial autonomy, and weak accountability.

Key Governance Challenges

According to the report, issues such as fragmented leadership, limited fiscal capacity, and institutional inefficiencies continue to constrain city performance and service delivery. It calls for a shift towards empowered city governments with clearer alignment of authority, responsibility, and resources.

Parallel Concerns from Industry

A separate report by the Federation of Indian Micro and Small & Medium Enterprises (FISME) highlighted challenges faced by micro and small enterprises (MSEs) in Meerut. It noted that recent demolition drives have disrupted commercial establishments, with affected businesses lacking alternative locations due to gaps in urban planning.

A joint study by FISME and the Meerut Citizens Forum had earlier estimated that Meerut’s Gross District Domestic Product needs to reach USD 30 billion by 2026–27 to support Uttar Pradesh’s goal of becoming a USD 1 trillion economy. However, the report warned that ongoing disruptions could impact this trajectory.

Dinesh Singhal, Member of FISME’s Central Executive Committee and Managing Director of Kanohar Electricals Limited, attributed the situation to shortcomings in the city’s master plan.

Major Recommendations

The NITI Aayog report outlines a set of reforms aimed at strengthening urban governance by proposing leadership changes such as directly elected mayors with fixed tenures supported by a Mayor-in-Council system to enhance accountability and continuity. 

It also recommends integrating core urban services like water, sanitation and public transport under city governments to improve coordination, while emphasising the need to strengthen municipal finances through enhanced revenues, timely fiscal transfers and the use of market-based instruments such as municipal bonds. 

Additionally, it calls for institutional restructuring by aligning multiple service delivery agencies under the oversight of city governments with clearer roles and better coordination.

Implementation Roadmap

The report recommends that states amend municipal laws to incorporate these changes, while the Ministry of Housing and Urban Affairs updates the Model Municipal Law and provides incentives for reform adoption. 

A phased implementation approach has been proposed to allow gradual scaling and adaptation.

(KNN Bureau)