"The states in India seem reluctant to empower urban local bodies both functionally as well as financially." Comment.
Approach · directive: “comment”
What it asks · Comment on whether States have really devolved functions and funds to municipalities, why they hesitate, and what the counter-arguments and remedies are.
The question has 3 parts — answer each
- Comment: evidence that States have held back functional devolution to urban local bodies
- Comment: evidence that States have held back financial devolution
- Comment: why States hesitate, the counter-view, and what should change
Open with · The 74th Amendment (1992) made municipalities constitutional institutions of self-government, but left the actual devolution to State legislatures, and that is where implementation stalls.
Cover
- Functional gap: of the 18 functions in the Twelfth Schedule only some are transferred; parastatals, development authorities and State departments often run water, transport and planning.
- Financial gap: weak own revenue (under-assessed and poorly collected property tax), heavy dependence on State transfers and grants, and limited borrowing capacity.
- Weak State Finance Commissions: reports delayed, recommendations ignored or not implemented in full.
- Political and administrative control: delayed elections, dissolved councils, powerful State-appointed commissioners and weak, short-tenure mayors.
- Why States hesitate: fear of losing patronage and control, doubts about municipal capacity, and their own fiscal stress.
- Counter-view: some States have devolved more, and thin municipal staff and skills are real constraints; devolution without capacity can fail.
- Remedies: transfer functions with funds and staff, reform property tax, municipal bonds, empowered mayors, timely SFCs and functioning Metropolitan and District Planning Committees.
Close with · Cities cannot deliver as 'institutions of self-government' unless States treat them as a third tier of government, not as their agencies.
Add value (verified)
- Article 243W leaves devolution to State law: the Legislature 'may, by law, endow' municipalities with powers and authority to function as institutions of self-government. The Constitution of India (as on 1 May 2024), Article 243W - Legislative Department ↗“the Legislature of a State may, by law, endow— (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government”
- RBI's first Report on Municipal Finances (November 2022): municipal budgets are much smaller than in peer countries, and revenues rest on property tax and transfers from higher tiers, leaving little financial autonomy. Report on Municipal Finances - RBI press release, 10 November 2022 ↗“While the size of the municipal budgets in India are much smaller than peers in other countries, revenues are dominated by property tax collections and devolution of taxes and grants from upper tiers of government, resulting in lack of financial autonomy”
Question: UPSC's CS (Main) 2023, GS Paper II — paper ↗. Approach: Minimalist IAS, checked 1 Oct 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer · 228 words (UPSC limit 150) · Minimalist IAS
The 74th Amendment (1992) gave municipalities constitutional status, but Article 243W only says a State legislature 'may' endow them with powers; most States have chosen to keep control.
Functional reluctance
- Of the 18 Twelfth Schedule functions, States transfer only some; water supply, transport and planning often stay with parastatals, development authorities and State departments.
- Metropolitan and District Planning Committees (Articles 243ZE, 243ZD) stay unformed or dormant in many States, so State agencies still plan cities.
- State-appointed commissioners overshadow short-tenure mayors; elections are delayed and councils superseded.
Financial reluctance
- Own revenue is thin: property tax is under-assessed and poorly collected, and user charges are rarely revised.
- The RBI's Report on Municipal Finances (2022) found municipal budgets much smaller than in peer countries, and revenues dominated by property tax and transfers from above, leaving little financial autonomy.
- State Finance Commissions (Article 243Y) are constituted late and their recommendations delayed or ignored.
Why, and what should change
- States fear losing patronage and control, doubt municipal capacity and face fiscal stress of their own; yet some States have devolved more, and thin municipal staffing is a real limit.
- Remedies: transfer functions with funds and staff, reform property tax, municipal bonds, empowered mayors, timely SFCs, and functioning planning committees.
Until States treat municipalities as a third tier of government rather than their agencies, the constitutional promise of urban self-government will stay on paper.
Written by Minimalist IAS from facts checked at source (how we verify) — a little fuller than exam length, so every part of the question is covered; in the hall, keep the structure and trim the detail. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.