Nagar Trends: Power of a Nagar


Cities in Indian Constitution
Originally, the Indian constitution did not have an explicit focus on cities or city governance. When the constitution was adopted, the priority was to integrate states and territories in the newly formed country based on the pre-independence governance structures. Later, the states were reorganised linguistically. Local level institutions such as panchayats and Urban Local Bodies (ULBs) gained attention in the early 1990’s when the 73rd and 74th amendment of the Indian Constitution recognised them as the third tier of the government. The 12th Schedule was added through the 74th Amendment with 18 functions meant to be devolved to the ULBs listed in this schedule. These 18 functions were to be the remit of the urban local bodies. Some of the already existing schedules include list of states, union territories; their respective functions (union list, state list and concurrent list); and administration & governance of scheduled areas, tribal areas and panchayats.

Pan-India Study
Nagrika has been conducting a pan-India mapping of the implementation status of 74th Amendment and municipal functions enshrined in the 12th Schedule. This is being done as part of a knowledge partnership project. The project is an urban governance study led by Praja Foundation, a non-partisan organisation working towards enabling accountable governance. Praja's initiative aims to advocate policy changes that will change the way Indian cities are governed. It is multi-year project in nature, with ground research as the foundation being used to form a pan-India network and influence change across the country. The Nagrika team have already visited 16 out of the 29 states, which are part of the study.

The primary objective of the Nagrika component of the larger study is to build an evidence base on the status of decentralisation of municipal functions at the city level by collecting it directly from the cities. The study is analysing that how empowered are the municipal corporations to undertake those functions in terms of staff and capacity, financial resources, legal mandate as well as autonomy in decision making. For each of the states, we have analysed the municipal acts to understand the functions provided to the city governments as per these acts. We have also verified from the city governments directly, as to how many of those functions are performed by them and various other state or national level agencies. In addition, we are identifying the prevalent institutional structures across different states and municipalities, the roles and responsibilities of various departments and officials (elected as well as administrative) within the municipalities and local / regional civil society organisations working on governance issues. 

Preliminary Reflections from the Study
Nagrika presented some of its reflections on its study in a regional level roundtable organised by Praja Foundation in Feb 2019 in New Delhi. The consolidated findings of the study will be presented in due course of time. Our initial findings from first 6 states as well as regional and state level consultations held to validate the findings are available here.

a. Composition of the functions
Though the 12th Schedule lists 18 functions, these 18 functions themselves are actually composed of many more functions. All the Municipal Acts list anywhere between 40-50 functions to be undertaken by the ULBs. Kerala's Act has approximately 150 different functions. 

Within the 18 functions, there are a few functions which contain more than one function. For example, the 'Promotion of Cultural, Educational and Aesthetic aspects' is one function but a municipality requires different resources and skills for promoting cultural activities, running educational institutions and enhancing aesthetics in a city. 'Public amenities including street lighting, parking, bus stops, public conveniences' is also considered as one function but  each of these is a distinct function. Then there are others which might sound as one function but have multiple parts like urban planning. This function includes creation of a spatial plan as well as its execution. The agencies as well as the skills required for the designing a plan versus enforcing a plan are also different. Given the multi-dimensional composition of the functions, there are various gaps and overlaps between the agencies who perform these functions. The study has identified these multi-dimensional functions as well as details regarding their funding and functionaries who perform them.

b. Administrative decentralisation versus Deliberative Decentralisation
The study also analysed the level of decentralisation at city level for both the deliberative as well as administrative wings.  The study highlighted the differences that exist in the relative level of decentralisation between these two wings at the city level. For instance, the difference that exists between the two wings with regards to the implementation of 18 functions in terms of the administrative department or staff assigned to the function versus elected councillors or deliberative bodies (such as standing committees) assigned for them. 

c. De facto vs De Jure: 
There is a wide variation in what is included in the Municipal Act and what is practiced on the ground. The study found the variances between the law and the practice for issues such as ward committees, integration of municipal plans with District Planning Committees' plans, delegation of functions listed in the 12th Schedule  among others. It also highlights the detailed analysis of these 18 functions in terms of what is provided in the Act, what does performing the function entail, who performs them, what are the challenges in performing them and so on.

d. Devolution versus control:  Analysing the Acts against the prevalent practices across the cities we identified the various ways and means through which effective devolution is subservient to control of national/state departments or para-statal agencies. Most Acts give control to state government including the power to dissolve corporations. This control is manifested in various others forms as well, such as appointment of posts in the municipalities, inspection of municipal works, overseeing implementation of municipal activities, granting approvals for works that municipalities undertake etc.  Most of the municipal acts define the municipal functions either as obligatory and discretionary, the former being the essential functions to be performed by the municipality and latter are not essential but at the corporation's discretion.  The study highlights how the control of the municipal functions is spread between the essential and discretionary functions and who holds the discretion to the performance of the function. 

The study is a positive step towards documenting the vast amount of existing but diffused knowledge on the functioning of the third tier of the government i.e. city government AKA municipalities. It is putting together a credible evidence base from across the country, on the opportunities and challenges that exist in empowering this tier of the government, that is closest to citizens.

What 2018 held for Urban India

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2018 was (yet another) year of cities, big and small. It was in continuation of the many previous years through which cities (and citizens) have been resurging as a dominant political, economic and social unit, independent of their regional, state and national level identities. This has been a slow and steady but a definite process with various planned and unplanned factors contributing to the resurgence. These include political and constitutional provisions that gave greater powers to cities and citizens; evolution of government programs, their funding mechanisms and institutional structures; an increased sense of civic participation from citizens; limited capacity of centralised governance institutions to monitor and deliver; technological enablers such as internet and mobile phones. Bottomline-Cities are here to stay! Pun intended.     
In the past, various ex-post-facto policies on important urban issues have been framed by Union government, such as transit oriented development policy, metro rail policy, policy on faecal sludge management among others. This year discussions and action on a national level ‘urban policy’ gained traction. The Ministry of Housing and Urban Affairs (MoHUA) is undertaking its preparation through a group of experts and organisations. The policy is said to be aligned with New Urban Agenda that was adopted at Quito, Ecuador during the Habitat III Summit.

In the last year, many state governments also formulated state level policies pertinent to urban issues. There were various policies issued by the relevant state urban depts (as listed below) along with policies of other departments, that had a direct bearing on the cities such as ban on use of plastics, use of electric vehicles among others.

  • Gujarat Government notified a sanitation policy to streamline collection and disposal of all kinds of waste in urban areas. Bihar Government also notified a solid waste management policy.

  • Maharashtra Government notified a green building policy for promotion of environmental friendly buildings. It also has revised regulations for integrated townships in the state through which developers can get 3 to 3.6 times the existing building rights on green belts.

  • Tamil Nadu is finalising its Urban Housing and Habitat Policy while also working on Development Regulation and Building RulesPunjab also came up with a new set of building rules to boost construction activity. A land pooling policy was notified and approved, for Delhi under the Master Plan 2021, which allows private sector and landowners to pool their land for development. Haryana government notified a policy for regularisation of illegal buildings and land use

  • Madhya PradeshHaryana and Bihar (for Patna) drafted policies on Transit Oriented development. This is not an entirely new development, especially since urban development is a state subject. However, their formulation reflects the fact that states are adopting a policy lens to address critical urban issues, either in the form of creating new policy processes for their regulation or revising the existing ones.

Modes of financing in Indian cities continued to evolve in the last year. In the beginning of 2018, National Urban Housing Fund was set up, to provide extra budgetary resources (EBRs) especially for the affordable housing program. EBRs are government borrowings from state owned enterprises/institutions such as, Housing and Urban Development Company (HUDCO), National Social Security Fund (NSSF) among others. It also includes grants and loans from multilateral and bilateral agencies. The use of EBRs for capital expenditure especially for cities, was a visible trend in the last year. Mexico and few other cities have used non-bank, social security funds as a way to finance housing, though in the form of mortgage finance directly to (prospective) homeowners.
Project funding for cities under Smart Cities was converted into a challenge process last year. An all India challenge process (CITIIS) was launched where smart cities are applying and competing for project funding supported by French Development Agency (AFD) and European Union (EU),
2018 also put cities of India in stark contrast with its villages, further highlighting the rural-urban divide. This divide had both a real and a digital version. It was manifested in real terms through multiple farmers' protests across the country including the almost 200 km long march of farmers between Nashik and Mumbai. There was an organised farmer strikeacross 10 states (though call was for a nationwide strike), which restricted supply of essential items such as vegetables and milk to the cities. The digital version of this rural-urban divide was also prominent in the last year. A company’s expansion plans seem to be based on this alleged divide between urban ‘India’ and rural ‘Bharat. Also, not only was there a wide gap assessed between urban and rural populations in terms of mobile ownership (even larger gap than Pakistan, Bangladesh and Kenya), rural areas also seemed to have much lesser share of Internet users. However, the rural counterpart consumed a lot more TV entertainment and bought lot more automobiles than the urban. 

2018 was a year of many surveys and rankings. Indian cities are now getting used to being pitted against each other. Till a few years ago, lay citizen only heard of India as a country being ranked under various rankings- e.g. India’s rank in corruption, HDI etc. In last decade, governments began efforts to undertake city based competitions and rankings. However, these rankings were created internally by government departments. It was a competition between different (levels and regions) of government with little or no citizen feedback. Now the competition has opened to the public. Some of the city rankings in recent years have factored the voices of citizens. Consequently, citizens relate with the rankings as well. For e.g. Swachh Survekshan gives almost 1/3rd weight to feedback by citizens. That these rankings are taken seriously, can be inferred from the efforts of multiple cities to perform better in the upcoming rankings. For e.g. efforts of ChennaiPuneBhopalGuwahatiThoubalAurangabadKozhikode and many others. All these cities are making efforts to engage with citizens and other stakeholders to create awareness about the survey and achieve a better ranking.
Indian cities have also started making to various global rankings where they have been evaluated along with other international cities. In a recent ranking of global cities, the top ten fastest growing cities are from India. Another ranking where Indian cities held majority of top slots was the global ranking in bad air quality where India had 14 out of 15 most polluted cities in terms of PM 2.5.
Year 2018 also saw multiple international partnerships in the domain of urban development. There was also a Memorandum of Understanding that was approved between India and Singapore for cooperation in urban planning and other city level services. A partnership was signed between India and Germany in the field of sustainable urban development. Another pact was made with France to help cut greenhouse gas emissions in urban transport and a Memorandum of Cooperation was signed with Japan in areas of technology, railways and urban transport projects. Many of these agreements were bilateral, between the national governments. 
While the cities stayed at the forefront, citizens also made themselves heard last year through various citizen led initiatives. A citizen led effort in Delhi ensured that almost 16,000 trees were saved from felling.  A Managaluru based civic group filed a writ petition in Karnataka High Court to hold the state's urban local bodies accountable for not forming ward committees as per the 74th Amendment. Another win for a citizen led initiative was the inclusion of Mumbai's Victorian Gothic and Art Deco Ensembles of Mumbai in the UNESCO's world heritage list. Out of the 37 heritage sites in India, this is the first where nomination process was led by citizens and citizen groups. Some citizens of Pune also came together and launched a movement for a green Pune. 

There were many more such initiatives that saw citizens take up an active role in matters of city's infrastructure, environment and to a certain extent, in governance. 2019 is ahead of us and we hope that it will be another year where cities and citizens will continue to build stronger relationships with each other.


Are urban policies aligned with city hierarchies?


India presently uses multiple definitions to classify its urban centers. The first and most  prominent definition is the one by the Census of India. It classifies towns in two categories, one based on legal statute and other on a mix of population size and economic functions. All places with a municipality, corporation, cantonment board or notified town area committee are termed as statutory towns. All other places with a minimum population of 5,000, at least 75 per cent of the male main working population engaged in non-agricultural pursuits and a density of population of at least 400 persons per sq. km are termed as census towns.

Another definition is used by the Ministry of Finance (MoF) to determine on financial liabilities of the Union government to its employees. Based on the recommendations of Pay Commission, the MoF puts forth its classification of cities/towns to grant House Rent Allowance (HRA) to central government employees. The cities are classified as X, Y and Z based on their population. 


Table 1: Pay Commission’s City Classification

Classification of cities



50 lakhs and above


5-50 lakhs


Below 5 lakhs


Finally, the Reserve Bank of India (RBI) also classifies Indian cities on the basis of population and ranks cities as Tier-1 to Tier-6. They are also classified as Rural, Semi-urban, Urban and Metropolitan. RBI uses this classification for various decisions relating to allowing the opening of full branches, mobile branches, administrative offices, back offices and other activities related to the banking.


Table 2: RBI’s Classification and Census classification


Centre Classification

Tier Classification

1,00,000 and above

Urban (10 lakh and above classified as Metropolitan)

Tier 1

50,000 to 99,999


Tier 2



Tier 3



Tier 4



Tier 5

Less than 5,000


Tier 6


Urban Hierarchy and Urban Policy

These three classifications are also used for decisions related to various government schemes including those relating to urban development. For e.g. Ministry of Urban Development is implementing the urban component of Swachh Bharat Mission in all the statutory towns (based on the Census). The number of cities per state to be covered under Smart Cities mission also took into consideration the number of statutory towns in the state. 

In order to understand the relevance of classifications with respect to the Smart Cities Mission, we examined how the original list of 98 Smart cities match up to some of the hierarchies being used in India and two urban programs.


Table 3: Overlap of Hierarchies with Smart Cities


Percent of smart cities that are also





Affordable Housing


Tier 1 cities (RBI)


Metropolitan Centers (RBI)


X +Y Cities (MoF)



There is a wide variation in the overlap of the original 98 cities under the Smart City Mission with other schemes and definitions.  While juxtaposing the various urban schemes and hierarchies, in the above table, one can see that the selection of cities is not consistent on any one set of definitions. Most programs do not rely on any one specific classification system, usually creating their own selection criteria.Smart City Mission used its own weighted selection method and hence was able to have a broad coverage of cities across the states.

In such a scenario, the hierarchies and its categories can serve two important purposes in India’s case. First, if updated periodically and correctly, it should capture the fast paced process of urbanisation. Second, its urban hierarchy should inform its urban policies.

Cities differ from each other on many accounts including social, economical and cultural.  To make meaningful policy decisions, it is important to classify cities in a way that can allow for such differences to be recognised in proposing policy based solutions. The decision on where a given urban centre lies within a hierarchy and whether it can be promoted to a higher level (or demoted to a lower level) of urban hierarchy has significant influence on the dynamics of growth in future periods.  It also has a bearing on the policies and schemes that it can attract.  

It is important that we think of rational, scientific and Indian context specific classifications of urban centres for consistent urban policy design and decisions.