India’s cities are booming. Their governments aren’t

Each monsoon, residents in Indian cities are greeted with a familiar sight: roads resurfaced and weeks later, pipes laid. This scenario results from a system where states maintain control over city functions. The 74th Constitutional Amendment of 1992 promised the devolution of functions, funds, and functionaries to elected city governments; however, this has yet to happen.

Cities are the backbone of India's economy, yet states often cling to the constituencies they've nurtured for years. A recent census should validate research suggesting that India has indeed become more urban. Economic Survey 2025-26 reveals that 63% of India is urban, double the 2011 census figure. Despite this, coordination gaps, weak fiscal transfers, and limited planning capacity persist.

To address these issues, three targeted reforms are recommended. Firstly, a mayor-in-council system modeled on Kolkata could be implemented. This system, as suggested by NITI Aayog, would involve a directly elected mayor serving a fixed 5-year term with real executive power. This would help unify authority and hold city governments accountable.

Secondly, state finance commissions (SFCs) need to be formed and their recommendations enforced. Currently, SFCs are rarely formed, and their recommendations are routinely ignored. Only 9 out of 28 states have an active or recently constituted commission. The 16th Finance Commission has made timely SFC formation a prerequisite for central grants, which could compel fiscal devolution if strictly adhered to.

Lastly, cities need tools to generate their own revenue. Currently, property tax yields only 0.12-0.15% of GDP, far below the developing-country average of 0.7%. This is largely due to a lack of GIS-based mapping, capital value-based assessments, and digital collection infrastructure.

Indian cities are the economic engine of the country, yet they are also its weakest tier of government. The question is not whether cities deserve self-governance, but whether they can initiate the necessary reforms without waiting for devolution, which may not materialize.