PIB · NITI Aayog ·

NITI Aayog Member Rajiv Gauba Emphasizes Empowered Urban Governments and Decentralization to Unlock India's Growth Potential

Distilled Policy Brief

  • The 2025-26 budget announced a 1 lakh crore rupees Urban Challenge Fund to develop cities as growth hubs.
  • States should devolve all 18 functions to urban local bodies in line with the 74th Amendment, and ensure timely municipal elections and direct election of mayors for 5-year terms.

🎯 Prelims High-Yield Examination Points

By 2050, India's urban population is expected to reach 85 crore, accounting for nearly half of the country's total population. The 2025-26 budget includes a 1 lakh crore rupees Urban Challenge Fund to develop cities as growth hubs, alongside an allocation of 5,000 crore rupees per sector over five years for 7 urban economic zones.

⚖️ Mains Analytical & Syllabus Linkages

Examine the structural, financial, and governance bottlenecks in India's urban local bodies and discuss the measures suggested by NITI Aayog to empower municipal governments for achieving the vision of Viksit Bharat @ 2047.

🎯 UPSC Prelims Practice Drill

Polity & Governance

With reference to the recent policy discussions on urban governance and development in India, consider the following statements regarding the empowerment of urban local bodies: 1. The 2025-26 Union Budget announced an Urban Challenge Fund of Rs 1 lakh crore to develop cities as growth hubs. 2. States are recommended to devolve all 18 functions to urban local bodies in line with the 74th Constitutional Amendment, alongside ensuring timely municipal elections and direct election of mayors for 5-year terms. Which of the statements given above is/are correct?

  • [A] 1 only
  • [B] 2 only
  • [C] Both 1 and 2
  • [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
✓ Correct Option: [C] Both 1 and 2

Both statements are correct based on the provided text. The 2025-26 budget announced a 1 lakh crore rupees Urban Challenge Fund to develop cities as growth hubs, and experts/policy reports emphasize that states should devolve all 18 functions to urban local bodies under the 74th Amendment while ensuring timely elections and 5-year directly elected mayoral terms.

Tark High-Yield Question Bank ⚡ Practice Full Test in Testing Arena ↗

🏛️ Historical Twin PYQ Anchor (2021)

UPSC Prelims 2021

Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.

Forensic Anchor: Cabinet Allocation of Business Rules & NCAP Framework
Examiner Trap Takeaway: UPSC swapped Central Pollution Control Board role with State Pollution Control Boards for state-level monitoring.

📚 Static Syllabus & Constitutional Linkages

74th Constitutional Amendment Act, 1992: Indian Polity by M. Laxmikanth - Local Government chapter detailing the constitutional status, structure, and 18 functional items of urban local bodies.
Urbanization and Municipal Finance: Indian Economy by Ramesh Singh or Indian Social Development textbooks focusing on urban governance challenges, revenue sources of urban local bodies, and recommendations of State and Central Finance Commissions.