India’s founding fathers famously disagreed on many policy issues. But most of them agreed on the need to build a strong centralised State. Fearful of fissiparous tendencies in a diverse country, they voted for a Constitution that empowered the Union government at the expense of the states, and virtually ignored local governments. India’s embrace of economic planning after Independence further centralised policymaking in the country.
Local governments received statutory backing only after the liberalisation of the economy in the early 1990s. The 73rd and 74th constitutional amendments were aimed at empowering village and city governments to deliver local public goods such as sanitation and waste management. The constitutional provisions for participatory democracy in these amendments aimed to give citizens a direct say in governance.
The reality of local governance has belied that constitutional promise. The third tier of governance still remains the weakest tier. Most state governments have been reluctant to devolve powers to local governments, especially in urban areas. Across Indian cities, unelected officials appointed by state governments enjoy greater powers than elected mayors. Local ward committees are largely defunct.
Institutions responsible for local body elections and local fund flows — State Election Commissions (SECs) and State Finance Commissions (SFCs) — have been denied the resources and authority they need to function effectively. So local body elections keep getting delayed without rhyme or reason. SFC recommendations are routinely ignored.
A recent report on SFCs published by the urban watchdog, Janaagraha, shows that several states tend to set up SFCs long after the previous award period ends. Unlike in the case of the Union Finance Commission, most SFCs are appointed for a very short tenure (typically less than 12 months), lack dedicated technical staff, and remain ill-equipped to judge the evolving needs of city and village governments.
While it has become a convention at the Centre to accept most of the Union Finance Commission recommendations, states seem to have devised their own conventions of ignoring SFC recommendations. Even when action taken reports are presented in state assemblies, they often leave out key details — such as the department(s) that would be responsible for implementing a particular recommendation, or the timeline for it.
State governments often complain about the Centre’s intrusion in state-level policy issues. But when it comes to devolving power to the next level of government, most states in the country fare worse than the Centre.
The lack of effective and accountable local governments hurts citizens, throttles the economy, and weakens the political system. By denying authority to city and village governments, it deprives citizens of a voice in local governance, and undermines the provision of civic amenities.
As in other parts of the world, cities have been the key engines of growth in India. But the lack of effective city governance elevates the costs of doing business, and shackles fresh investments. Large Indian businesses sometimes arrange for quasi-public goods for their employees, but such workarounds have their limits.
A weak local governance system also hurts the country’s political culture. Since the stakes in local body elections are relatively low, very few serious aspirants for state and national leadership roles contest these elections. This hollows out the organisational base of political parties, making them excessively dependent on moneybags and crimelords.
In several other democracies — from Indonesia to Turkey — successful mayors have gone on to become heads of State. In India, the last time a municipal executive assumed a national leadership role was during the British Raj, when Subhash Chandra Bose, a former chief executive of the Calcutta Municipal Corporation, became the Congress president in 1938.
There is growing recognition among policy elites today that our cities are crumbling, and they need better infrastructure and financing. The allocation for urban agglomerations in the recent Budget and the increased grants for urban local bodies by the 16th Finance Commission (for the 2026-31 period) stem from this realisation.
However, building liveable and thriving cities is not just a financing challenge. It is an institutional challenge.
It requires us to tackle hard questions about local governance. Can unelected municipal commissioners really drive governance reforms in a messy democracy such as ours? Or should directly elected mayors be in the driver’s seat? Is the three-tier structure for rural local bodies required? Should peri-urban villages share a common governance setup with urban areas? Do we need constitutional amendments to strengthen local body institutions such as SECs and SFCs?
Nearly ten years ago, the Thiruvananthapuram Member of Parliament, Shashi Tharoor, introduced a private member bill that provided for directly elected mayors in large Indian cities. It also included several thoughtful provisions to empower municipal councillors and citizens’ ward committees. As with other private member bills, Tharoor’s did not make much headway. But the issues it raised remain important.
Local governance, and local government-related institutions such as SECs and SFCs, deserve more attention than they receive.
Pramit Bhattacharya is a Bengaluru-based journalist. The views expressed are personal
