“We can’t run cities from state capitals”: Shri Rajiv Gauba, Member, NITI Aayog at 2nd National Urban Conclave, calls for empowered city governments to Unlock India’s Growth Potential

Prelims-testable facts

• 01India's population is projected to grow for several decades and stabilize at approximately 165 crore around 2060.
• 02By 2050, nearly half of India's population is expected to live in urban areas, increasing from approximately 50 crore at present to 85 crore.
• 03Meeting the infrastructure, housing, and basic service requirements of the urban population will need a fundamental change in how cities are planned, governed, and financed.
• 04The 74th Amendment requires states to devolve all 18 functions to urban local bodies, including master planning, water supply, fire services, and traffic.
• 05Central Finance Commission grants to ULBs have increased to 45% from 36%, but fund devolution from states to cities remains low.
• 06State Finance Commissions should be regularly constituted to ensure adequate fiscal transfer to urban local bodies.
• 07NITI Aayog's Growth Hub initiative aims to develop cities as growth hubs, with a ₹1 lakh crore Urban Challenge Fund announced in the 2025-26 budget.

Trap alerts

• Most people think that the 74th Amendment only requires states to transfer funds to urban local bodies, but actually it requires the devolution of all 18 functions.
• Most people think that the Indian government has already implemented all necessary reforms in urban administration, but actually there is an urgent need for comprehensive reforms.
• Most people think that cities can be effectively governed from state capitals, but actually empowered city governments are essential for improving service delivery and ensuring effective citizen participation.