Q. “The states in India seem reluctant to empower urban local bodies both functionally as well as financially.” Comment.

Model Answer: 

Despite the 74th Constitutional Amendment (Article 243W) envisioning grassroots democratic decentralization, Urban Local Bodies (ULBs) remain structurally crippled by states’ reluctance to devolve genuine power.

1. Functional Reluctance of States

• Incomplete Devolution: Most states have not transferred all 18 functions listed in the 12th Schedule to ULBs (ASICS Report, Janaagraha).
• Proliferation of Parastatals: State-controlled Special Purpose Vehicles (SPVs) and parallel agencies routinely bypass elected ULBs (Smart City SPVs, State Jal Boards).
• Weak Mayoral Authority: Executive power remains heavily concentrated with State-appointed Municipal Commissioners, rendering Mayors as mere titular heads.
• Personnel Control: States retain control over the recruitment, transfer, and disciplinary actions of municipal staff, eroding local administrative autonomy.

2. Financial Constriction of ULBs

• Undermining SFCs: States frequently delay constituting State Finance Commissions (Article 243Y) or ignore their devolution recommendations.
• Narrow Tax Base: States hesitate to delegate lucrative taxation powers, tightly controlling property tax base revisions and collections.
• Dependency on Tied Funds: State funding largely arrives as conditional grants, restricting ULBs from addressing localized infrastructure priorities.
• Borrowing Constraints: ULBs cannot independently issue municipal bonds or secure loans without stringent, often delayed, State government approvals.

Achieving the “New India” urban vision demands transitioning from mere delegation to genuine devolution, strictly applying the principle of subsidiarity and implementing the 2nd ARC’s local governance reforms.