Topic: Devolution of powers and finances up to local levels and challenges therein.
Q4. Examine the challenges faced by urban local bodies in India despite increased fiscal transfers. Discuss reforms required to strengthen urban governance. (10 M)
Difficulty Level: Medium
Reference: IE
Why the question
Rapid urbanisation in India and the increased fiscal transfers recommended by the 16th Finance Commission have renewed debate on whether financial support alone can strengthen urban local governance and service delivery.
Key Demand of the question
The question requires examining the structural and institutional challenges faced by urban local bodies despite higher fiscal transfers. It also requires discussing reforms needed to improve decentralisation, fiscal autonomy and governance capacity in cities.
Structure of the Answer
Introduction
Briefly introduce the constitutional vision of urban decentralisation under the 74th Constitutional Amendment and the increasing fiscal support through Finance Commission grants.Body
- Challenges faced by urban local bodies: Explain issues such as limited fiscal autonomy, state control over municipal functions and weak administrative capacity.
- Reforms to strengthen urban governance: Discuss measures such as greater functional devolution, improved municipal finance systems and professionalisation of urban administration.
Conclusion
Highlight the need for deepening democratic decentralisation and strengthening institutional capacity to enable cities to manage India’s rapid urbanisation.
