India’s urban landscape, once a beacon of promise and productivity, now faces mounting challenges. Waterlogged streets, endless traffic jams, and choking pollution have become daily realities for millions living in cities. According to a recent audit by the Comptroller and Auditor General (CAG), these problems are not just the result of rapid urbanization. Rather, they stem from deep-rooted issues in the way urban local bodies (ULBs)—the city governments responsible for essential services—are structured and empowered.
At the heart of the matter is the 74th Constitutional Amendment Act of 1992. This landmark legislation was designed to give ULBs real authority over 18 crucial functions, from urban planning to sanitation and poverty alleviation. Yet, more than three decades later, the CAG’s 2024 audit across 18 states paints a starkly different picture. On average, ULBs have full control over only four of these 18 functions, with state governments regularly interfering in everything from staffing to policy decisions. The findings raise a sobering question: Are India’s city governments set up to fail?
According to the CAG audit, most local bodies are hamstrung by state-level micromanagement. For example, the Shimla Municipal Corporation required 720 new personnel to function effectively, but the state government sanctioned just 20 posts. This isn’t an isolated case. Across the 18 states surveyed, one out of every three posts in ULBs remains vacant, leaving city governments critically understaffed and unable to deliver on even basic promises. The audit, as reported by Indian Express, highlights that state governments—not local authorities—make key staffing decisions, often underestimating the real needs of urban centers.
This lack of autonomy extends to the very heart of local democracy. The 74th Amendment envisioned vibrant, accountable city governments, but the reality is far from it. The CAG found that 61% of 2,625 ULBs in 17 states did not have an elected council. Only five states had mayors chosen through direct elections. Why the shortfall? The power of ward delimitation—the process of defining city council boundaries—rests with state governments, which frequently delay municipal elections, leaving residents without a voice and local governments without legitimacy.
Even where councils exist, their ability to plan and execute is severely limited. The Amendment called for the creation of district planning committees (DPCs) and metropolitan planning committees (MPCs) to coordinate development across city and regional lines. Yet, only 10 states have formed DPCs, and just three have prepared annual district plans. Of the nine states mandated to form MPCs, only three have complied, resulting in a mere seven metropolitan ULBs with functioning plans. Strategic, integrated planning—the backbone of urban development—remains a distant dream.
The financial picture is equally grim. ULBs are supposed to be empowered to collect property taxes, a major source of funding. In practice, however, they lack the authority to set rates, conduct assessments, or revise tax structures. Many cities still levy property taxes at outdated rates, further eroding their financial base. State Finance Commissions (SFCs), which are tasked with recommending fiscal transfers to ULBs, are often not constituted on time. When they are, their recommendations are frequently ignored. As a result, ULBs in 15 states faced an average shortfall of ₹1,606 crore in receipts, according to the CAG. Eleven states reported a staggering 42% gap between expenditure and revenue for local bodies.
Even the funds that do reach city governments are not always used for development. Only 29% of available money is allocated to actual development activities, leaving critical infrastructure needs—roads, drainage, public health—chronically underfunded. The result? Cities that can’t keep up with the demands of their growing populations, and residents who pay the price in declining quality of life.
Meanwhile, another institution meant to safeguard the rights of marginalized communities—the National Commission for Minorities (NCM)—finds itself in a precarious position. As of October 22, 2025, the NCM is without a chairman or members. The Delhi High Court is currently hearing a Public Interest Litigation (PIL) urging the Union government to reconstitute the Commission. But as Indian Express notes, the NCM’s track record over its 47-year history has been anything but stellar.
The NCM was first established in 1978, intended as a watchdog to protect the constitutional rights of religious and linguistic minorities. However, it remained a non-statutory body for 14 years, only gaining some powers of a civil court under the National Commission for Minorities Act of 1992. Even then, its effectiveness was hampered by limited autonomy and political reluctance to grant it real teeth. The Commission’s leadership, once drawn from the legal fraternity, has since 2003 been led by individuals without legal backgrounds—further eroding its authority and impact.
Attempts to strengthen the NCM have repeatedly faltered. In 2004, the government established a separate National Commission for Minority Educational Institutions (NCMEI), and a temporary commission was set up in 2005 to identify socially and economically backward sections among minorities. This commission submitted its report, but no action was taken until the government changed in 2014. As the former NCM chairman and member of the Law Commission of India put it, “None of the so-called National Commissions has ever enjoyed autonomy in fulfilling its statutory obligations. None of them, even after long years, has brought any revolution in the lives of those for whom it had been created.”
This sense of institutional drift is echoed in the NCM’s current limbo. With no chair or members, and little evidence that its interventions have meaningfully advanced minority rights, some—including its former leaders—question whether the Commission should continue to exist at all. “Its history of 47 years shows that whatever little the minorities of the country can expect in terms of the constitutional provisions for their rights as equal citizens… can never be secured through intervention by the toothless tiger called the NCM,” wrote the former chairman in Indian Express. “So, if it is thrown into the dustbin of history, it will be worthless to shed tears on its unceremonious exit from the national scene.”
The parallels between the struggles of ULBs and the NCM are hard to ignore. Both were created with the promise of empowering marginalized communities—urban residents in one case, religious and linguistic minorities in the other. Both have been hobbled by a lack of real autonomy, frequent political interference, and chronic underfunding. And both now stand at a crossroads, their futures uncertain.
Experts argue that the way forward is clear, if politically challenging. ULBs must be granted genuine autonomy over their functions, free from the constant meddling of state governments. This means empowering State Election Commissions to ensure regular, democratic elections; making DPCs and MPCs fully functional; ensuring timely constitution of SFCs; and allowing ULBs to recruit and manage their own workforce. Only then can India’s cities hope to fulfill their potential as engines of growth and opportunity.
As for the NCM, its fate may well be a cautionary tale about the dangers of creating institutions without the independence or resources to make a difference. Whether it is reconstituted or allowed to fade away, the lesson is clear: real change requires more than good intentions and grand pronouncements. It demands the courage to give power where it is needed most—and to hold those in power accountable for results.
India’s urban and minority institutions may have started with lofty ambitions, but without urgent reform, they risk becoming little more than relics of what might have been.
