How India’s Great Urban Decentralisation Experiment Has Stalled

It’s a scene so familiar it has become a backdrop to urban Indian life: streets waterlogged after a brief shower, traffic snarls that stretch for hours, and the slow-motion collapse of public infrastructure. Beneath this dysfunction lies a deeper malaise: the virtual collapse of urban governance.

The roots of this crisis lie in the gap between a visionary reform and its half-hearted execution. The 74th Constitutional Amendment of 1992 granted constitutional status to Urban Local Bodies, aiming to dismantle a top-down, exclusionary planning model. 

Before 1992, state-level agencies crafted master plans from afar. These plans, though often technically sound, were disconnected from reality, prioritising order over equity. One can admire the charm of Chandigarh’s layout while despairing at its housing for migrants or note the stark contrast between Mumbai’s elite southern wards and its neglected eastern suburbs.

The Amendment promised to change this.

In pockets where its spirit was embraced, it worked wonders. Cities like Surat, Pune, and Ahmedabad demonstrated that empowered municipal corporations could drive transformative change, improving tax collection, revolutionising sanitation, and pioneering participatory budgeting.

Yet, for most Indian cities, this promise remains unfulfilled. The amendment provided the skeleton of decentralisation, but state governments hesitated to give it muscle. Critical functions, such as land use and infrastructure, remained with powerful parastatals, creating a parallel governance structure that diluted accountability. 

Mayors, though elected, were left with responsibility but no real authority; their average tenure of a mere 2.5 years is barely enough time to learn the job, let alone leave a mark. Contrast this with global cities where mayors or governors serve four- to five-year terms, providing the stability needed for long-term climate resilience and infrastructure planning.

Financially, most urban local bodies were left to languish. 

With property tax collection averaging below 50% and a heavy reliance on state grants, they simply lack the funds to dream big. This half-baked devolution created a perfect storm: planning became fragmented, political interference increased, and haphazard growth spiralled out of control. The consequences are the urban nightmares we now navigate daily.

So, is the solution to revert to the old, centralised system? That would be a tragic mistake. The challenges of the 21st century require bespoke, local solutions. The problem isn’t the idea of decentralisation; it’s that we never truly tried it. And now, a few decades down the line, there are also lessons we can learn from other successful models, as we have already learnt what not to do.

Various countries have tried different models of urban administration and planning. Replication of their strategies as is in India would be a mistake, but they provide useful lessons, like in Germany’s Stadtumbau, where municipalities buy vacant land to control development via urban restructuring or redevelopment, though this is more commonly used in the context of managing urban shrinkage and population decline. Brazil’s City Statute, Estatuto da Cidade, mandates inclusive master plans to create a new legal-urban order for land access and equity in large urban cities, the idea of the “Right to the City”. And Tokyo is a good global model — its governor even leads long-term climate resilience planning.

The way out requires a clear-eyed, multi-pronged strategy that is both radical and practical.

First, we need to fix governance. This begins with implementing the 74th Amendment in letter and spirit. Article 243W must be enforced, transferring functions like urban planning and zoning to municipalities. Overlapping agencies, such as BDA in Bengaluru and MMRDA in Mumbai, must be replaced with empowered Metropolitan Planning Committees, as originally mandated. We must also depoliticise essential services by creating independent regulators for water and transit, much like Delhi’s DERC for electricity.

Second, we need to grant financial independence. Municipalities cannot be beggars at the state’s door. Kerala’s People’s Plan Campaign in 1996 showed the way, devolving 40% of state funds to local bodies. This can be replicated and enhanced through robust property tax reforms using GIS mapping, rational user charges for water and waste, and innovative municipal bonds, following Ahmedabad’s successful example.

Third, we need to build technical capacity. Most municipalities lack planners and data systems. The solution lies in creating a dedicated ‘Urban Management Cadre’ for cities, appointing ‘Chief Resilience Officers’ to lead climate adaptation, and adopting digital governance—from unified GIS platforms to AI for optimising traffic and waste collection.

Fourth, planning has to become participatory and scientific. Outdated, opaque master plans must give way to a new era of inclusion. Area Sabhas, as envisioned in the Amendment, can empower ward committees to approve local projects. Third-party audits of plans, incremental zoning to legalise mixed-use development, and citizen involvement, as seen in Patna’s flood-mapping exercise, are all key to creating cities that work for people.

Fifth, we need to think regionally. Cities bleed beyond municipal boundaries. Statutory MPCs with real power over transport and environment, and inter-city treaties for water and waste management, are essential to manage this growth cohesively and stop the chaos exemplified by Bengaluru’s fractured governance.

Sixth, green the cities! This does not even need elaboration.

Finally, we must get tough on violations. The constant regularisation of illegal constructions for votes has bred a culture of impunity. This requires not just fines but strict penalties for violators, alongside total transparency in land records using technologies like blockchain.

This is not a mere technical challenge but a political one. It requires the genuine devolution of powers and finances. As one of the foremost thinkers on urban architecture and design, Nikos Salingeros, reminds us, a city’s health lies in its “organised complexity” — the myriad interconnected elements that create a vibrant, functional ecosystem. This complexity cannot be managed from a distant state capital.

The 74th Amendment provided the blueprint. Thirty years on, it is finally time to build.