**Executive Summary**
On April 25, 2026, the Union Minister of Housing & Urban Affairs released the NITI Aayog report, “Moving Towards Effective City Government – A Framework for Million-Plus Cities.” The report provides a strategic roadmap to empower city governments by addressing structural challenges like fragmented leadership and weak financial autonomy. The framework aims to drive India’s transition toward a $30 trillion economy and the "Viksit Bharat 2047" vision through phased urban governance reforms.
**Key Points / Main Content**
**Strengthening City Leadership**
* **Directly Elected Mayor:** Introduction of a Mayor with a fixed tenure to ensure leadership continuity.
* **Mayor-in-Council System:** Implementation of an empowered council to improve clarity and accountability in decision-making.
**Integrating Urban Service Delivery**
* **Centralized Oversight:** Bringing essential services, including water supply, sanitation, and public transport, under the direct purview of city governments.
* **Improved Coordination:** Reducing fragmentation to ensure more responsive and efficient service delivery.
**Enhancing Municipal Finances**
* **Revenue Generation:** Strengthening own-source revenue streams to increase financial independence.
* **Predictable Transfers:** Ensuring timely fiscal transfers through robust State Finance Commissions.
* **Market-Based Financing:** Enabling cities to access capital markets through mechanisms such as municipal bonds.
**Institutional Restructuring**
* **Parastatal Alignment:** Bringing various independent parastatal agencies involved in service delivery under city government oversight.
* **Coordination Frameworks:** Establishing clearly defined roles to eliminate administrative overlaps.
**Implementation Strategy**
* **Phased Approach:** Utilizing a staged implementation process to allow for testing, learning, and the development of scalable frameworks.
* **Legislative Alignment:** Encouraging states to amend their respective Municipal Acts to reflect these reforms.
**Impact Analysis**
**State Governments**
**Impact**
States are identified as the primary facilitators of decentralization and legislative change.
**Action Required**
States must amend their Municipal Acts to incorporate governance reforms and empower local leadership.
**Ministry of Housing and Urban Affairs (MoHUA)**
**Impact**
The Ministry acts as the central coordinating body for national urban reform adoption.
**Action Required**
Update the Model Municipal Law and provide guidance and incentives to states to support the adoption of the framework.
**City Governments (Million-Plus Cities)**
**Impact**
City administrations will gain significantly more authority, financial autonomy, and responsibility for urban services.
**Action Required**
Incorporate parastatal agencies and key urban functions (water, sanitation, transport) into their administrative structures and pursue market-based financing.
Key Entities Referenced
Moving Towards Effective City Government – A Framework for Million-Plus Cities: A roadmap report by NITI Aayog designed to strengthen urban governance, institutional foundations, and financial autonomy in India’s major cities.
NITI Aayog: The primary policy think tank of India that authored the framework proposing a structural shift towards empowered city governments and directly elected Mayors.
Ministry of Housing and Urban Affairs: The central ministry responsible for implementing urban reforms, updating the Model Municipal Law, and providing guidance to states for reform adoption.
Model Municipal Law: A referenced legislative framework that the report recommends updating to provide a standardized guide and incentives for states to reform their municipal governance.
Viksit Bharat: The strategic national vision for 2047, which the report’s urban governance recommendations aim to realize by unlocking the economic potential of cities.
NITI Aayog
NITI Aayog releases report on “Moving Towards
Effective City Government – A Framework for
Million-Plus Cities”
Posted On: 25 APR 2026 9:21PM by PIB Delhi
The Hon’ble Union Minister of Housing & Urban Affairs, Sh. Manohar Lal Khattar, released the report
“Moving Towards Effective City Government – A Framework for Million-plus Cities” by NITI Aayog on
25 April 2026 at the India Habitat Centre, New Delhi. The event was attended by Urban Development
Ministers from more than 10 states, reflecting broad-based participation and commitment to advancing
urban governance reforms.
India’s urbanisation is central to achieving the vision of Viksit Bharat by 2047 and progressing towards a
$30 trillion economy. Cities are central to driving economic growth, fostering innovation, and generating
employment. However, their potential remains constrained by structural challenges such as fragmented
institutional arrangements, limited devolution of powers, weak financial autonomy, and diffused
accountability. Strengthening urban governance is therefore critical to enabling cities to perform
effectively.
The report “Moving Towards Effective City Government – A Framework for Million-plus Cities” by
NITI Aayog presents a focused roadmap to address these challenges. It emphasises the importance of
strengthening institutional foundations alongside sectoral improvements and prioritises India’s million-
plus cities as key economic centres contributing significantly to national growth.
The report identifies persistent governance issues, including weak and fragmented leadership structures,
constrained fiscal capacity, and capacity gaps that limit service delivery and urban performance. It calls
for a shift towards empowered city governments through a clear realignment of authority, responsibility,
and resources at the city level. Such a transformation is essential for cities to function as effective engines
of growth and responsive service providers.
Key recommendations of the report include:
1. Strengthening city leadership through the introduction of a directly elected Mayor with a fixed
tenure, supported by an empowered Mayor-in-Council system to ensure continuity, clarity, and
accountability in decision-making.
2. Integrating urban service delivery by bringing key functions such as water supply, sanitation,
and public transport under the purview of city governments to improve coordination and
accountability.
3. Enhancing municipal finances by strengthening own-source revenues, ensuring more
predictable and timely fiscal transfers through robust State Finance Commissions, and enabling
access to market-based financing mechanisms such as municipal bonds.4. Undertaking institutional restructuring by bringing multiple parastatal agencies involved in
service delivery under city government oversight, with clearly defined roles and stronger
coordination frameworks.
For effective implementation, the report recommends that states amend their Municipal Acts to reflect
these governance reforms. It also calls on the Ministry of Housing and Urban Affairs to update the Model
Municipal Law and provide guidance and incentives to support reform adoption.
The report proposes a phased approach to implementation, enabling testing, learning, and the development
of scalable frameworks. This approach ensures that reforms are both practical and sustainable. Overall, it
offers a comprehensive roadmap for strengthening urban governance in India, recognising that the
country’s next phase of growth will be driven by economically vibrant, well-governed, and liveable cities.
Strengthening city governments, therefore, is not only an administrative priority but a strategic imperative
for achieving national development goals.
Shri Rajiv Gauba, Member, NITI Aayog, highlighting the salient features of the Report stated that the
report was the outcome of extensive deliberations, evidence-based analysis, and a study of global best
practices undertaken with a group of experts. He noted that “Moving Towards Effective City Government”
highlights the need to establish city governments in the true sense, which remains a critical gap. He
emphasised that without empowered city governments, India cannot fully unlock the economic potential
of its cities, and that effective implementation of the recommendations will be key to realising the vision
of Viksit Bharat.
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