Empowering City Governments: The 74th Amendment Revisited

The 2nd National Urban Conclave, organised by the Ministry of Housing and Urban Affairs, concluded in Bhubaneswar on 25 October 2026. Its most quoted line came from Rajiv Gauba, Member of NITI Aayog: "We cannot run cities from our state capitals."

He called for directly elected mayors with five-year terms, a Mayor-in-Council system, timely municipal elections, and the devolution of all 18 functions listed for municipalities under the 74th Amendment — including master planning, water supply, fire services and traffic. These recommendations come from a report developed jointly by NITI Aayog and the Ministry, Moving Towards Effective City Governance.

For an NDA candidate, the event is a prompt to revise one of the most examined parts of the Constitution: how India governs its towns and cities.

The numbers behind the urgency

Mr Gauba set out the scale of the problem:

• India's population is expected to keep growing for several decades and to stabilise at about 165 crore around 2060.
• The urban population is projected to rise from about 50 crore today to 85 crore by 2050, when nearly half of all Indians are expected to live in cities.
• Budget outlay for the urban sector has grown about tenfold since 2014, with about ₹3.7 lakh crore invested in metro rail and bus systems.

He pointed to two new funding instruments. The Urban Challenge Fund of ₹1 lakh crore, announced in the Union Budget 2025-26, finances city projects in three areas — Cities as Growth Hubs, Creative Redevelopment of Cities and Water and Sanitation — and covers only part of a project's cost, with the rest to be raised from bonds, bank loans or public-private partnerships. This year's budget also provides ₹5,000 crore each for seven City Economic Regions over five years.

The Union Housing and Urban Affairs Minister, closing the Conclave, noted that more than half of the country's legacy waste — old garbage dumps — has been scientifically remediated.

The 74th Amendment in the form examiners test

The 73rd and 74th Amendments of 1992 gave constitutional status to local government. The 73rd covers rural panchayats; the 74th covers urban municipalities.

The comparison candidates must keep straight

Why devolution has fallen short

The key word in Article 243W is "may". The Constitution allows State legislatures to endow municipalities with powers over the Twelfth Schedule functions, but it does not require them to transfer all eighteen. Many States have transferred only some, often keeping the most important — urban planning, water supply and fire services — with State departments and parastatal agencies.

The result is the pattern Mr Gauba described: cities that are run from State capitals. Three structural weaknesses follow.

• Weak mayors. In most States the mayor is elected by the councillors rather than by the city's voters, often for a short term, while executive power rests with a municipal commissioner appointed by the State government. A mayor without executive authority or a long enough term cannot be held accountable for results.
• Delayed elections. Despite the constitutional requirement, municipal elections in several cities have been postponed for long periods, leaving cities under State-appointed administrators.
• Thin finances. Municipal bodies depend heavily on transfers from the State. Their own-source revenue — chiefly property tax — is low by international standards, which is why the Conclave stressed own-source revenue, reformed land-use planning and municipal bonds.

The recommendations — elected mayors with real executive power and full terms, timely elections, full devolution, stronger own revenues — are designed as one package, because each fails without the others.

The cooperative-federalism dimension

Urban reform runs into the same constitutional structure as many other reforms: local government is a State subject, so the Union cannot impose a municipal model. What it can do is use funding conditions — linking money from national urban missions to State reforms, as Mr Gauba urged — and offer frameworks like the NITI report. The same Centre-State tension, and the same reliance on cooperation, appears in law reform, discussed in our explainer on cooperative federalism and the Law Commission. Urban housing, one of the missions involved, is covered in our article on PMAY-Urban 2.0.

🔑 Revision block

• The event: 2nd National Urban Conclave (MoHUA), concluded in Bhubaneswar, 25 October 2026. NITI's Rajiv Gauba: "We cannot run cities from our state capitals."
• Recommendations (NITI-MoHUA report Moving Towards Effective City Governance): directly elected mayors, five-year terms, Mayor-in-Council, timely elections, devolution of all 18 functions.
• Scale: population to stabilise at about 165 crore around 2060; urban population ~50 crore → 85 crore by 2050.
• Funds: Urban Challenge Fund ₹1 lakh crore (Budget 2025-26; growth hubs, creative redevelopment, water and sanitation; partial funding, rest from markets); ₹5,000 crore each for 7 City Economic Regions.
• 74th Amendment: 1992, in force 1 June 1993; Part IXA, Arts 243P-243ZG; Twelfth Schedule, 18 functions (Art 243W — States may devolve).
• Bodies: Nagar Panchayat / Municipal Council / Municipal Corporation; 5-year term; one-third seats for women; State Election Commission; State Finance Commission; DPC (243ZD), MPC (243ZE, 10 lakh+); Ward Committees at 3 lakh+.
• 73rd vs 74th: Part IX / IXA; Eleventh (29) / Twelfth (18).

🎯 Practice MCQs

Q1. The 74th Constitutional Amendment deals with: (a) Panchayati Raj institutions (b) Urban local bodies (c) Anti-defection (d) The Goods and Services Tax

→ (b) The 73rd covers panchayats; the 74th covers municipalities.

Q2. How many functions are listed in the Twelfth Schedule of the Constitution? (a) 18 (b) 22 (c) 29 (d) 47

→ (a) The Eleventh Schedule lists 29 subjects for panchayats.

Q3. Provisions on municipalities are contained in which Part of the Constitution? (a) Part IX (b) Part IVA (c) Part IXA (d) Part XIV

→ (c) Part IX covers panchayats; Part IVA contains the Fundamental Duties.

Q4. Under Article 243W, the transfer of the Twelfth Schedule functions to municipalities is: (a) mandatory for all States within five years (b) decided by the President (c) decided by the Union Ministry of Housing and Urban Affairs (d) left to the discretion of the State legislature

→ (d) States "may" devolve the functions, which is why devolution remains incomplete.

Q5. A Nagar Panchayat is constituted for: (a) an area in transition from a rural area to an urban area (b) a metropolitan area of more than 10 lakh people (c) a cantonment area (d) a group of villages

→ (a) Municipal Councils serve smaller urban areas and Municipal Corporations larger ones.

Q6. Elections to municipalities are conducted by the: (a) Election Commission of India (b) State Election Commission (c) District Collector (d) State Finance Commission

→ (b) The State Election Commission conducts both municipal and panchayat elections.

Q7. A Metropolitan Planning Committee is required for a metropolitan area with a population of at least: (a) 1 lakh (b) 3 lakh (c) 10 lakh (d) 50 lakh

→ (c) Ward Committees are required where a municipality has three lakh or more people.

Q8. The Urban Challenge Fund of ₹1 lakh crore was announced in the: (a) Union Budget 2025-26 (b) Union Budget 2019-20 (c) Fifteenth Finance Commission report (d) Smart Cities Mission guidelines of 2015

→ (a) It funds projects in growth hubs, creative redevelopment, and water and sanitation.

Q9. In most Indian States, the executive head of a municipal corporation is the: (a) mayor elected directly by the city's voters (b) chairperson of the State Finance Commission (c) district judge (d) municipal commissioner appointed by the State government

→ (d) This is why reformers argue for directly elected mayors with executive power.

Q10. The minimum reservation of seats for women in municipalities under the 74th Amendment is: (a) one-fourth (b) one-third (c) one-half (d) two-thirds

→ (b) Several States have raised it to one-half by their own laws.

📋 How this gets asked (PYQ pattern)

Local government is one of the most frequently tested areas of NDA Polity, and the questions are almost entirely factual.

The first form is the amendment-pairing question: 73rd with panchayats, Part IX and the Eleventh Schedule's 29 subjects; 74th with municipalities, Part IXA and the Twelfth Schedule's 18 functions. Candidates swap these numbers more than any others in the topic.

The second is the body question: who conducts municipal elections, who reviews municipal finances, what a Metropolitan Planning Committee is. The State Election Commission and the State Finance Commission are the answers that catch candidates who reach for central bodies.

The third is the type-of-municipality question: what a Nagar Panchayat is, as against a Municipal Council and a Municipal Corporation.

A fourth, analytical, is the devolution question: whether devolution of the Twelfth Schedule functions is mandatory. It is not, and that single word — "may" — explains most of the weaknesses of Indian city government.

For the SSB lecturette or group discussion on urbanisation, the useful argument is that India's cities are economic engines governed like administrative outposts. Empowered mayors, full devolution and stronger municipal finances are the reforms that would let cities manage the growth that is coming — and the 74th Amendment already provides the framework, if States use it.

Preparing for NDA? For every constitutional body, learn its Article, its Part and its Schedule — those three references answer most Polity questions in the GAT. Build the base with our NDA study material, follow the daily NDA current affairs, and train with serving-standard faculty in the upcoming Cavalier courses in Delhi.

✍️ Written by Aditya Tiwari — Economy & polity faculty at The Cavalier. Reviewed by the Cavalier Faculty Desk.