Smart Cities, AMRUT and PMAY Drive Tenfold Rise in Urban Funding
Bhubaneswar, October 25: The government has raised budget allocations for urban areas tenfold since 2014, according to NITI Aayog member Rajiv Gauba, who spoke on Sunday. He said a range of large initiatives has been launched to speed up the development of Indian cities. These include the Smart Cities Mission, AMRUT, the Pradhan Mantri Awas Yojana, the Swachh Bharat Mission and the Urban Livelihoods Mission.
Gauba also highlighted heavy investment in public transport, saying metro rail and bus systems have together received nearly Rs 3.7 lakh crore.
Delivering remarks at the closing session of the Second National Urban Conclave, the former Cabinet Secretary spoke about the growth hub initiative of NITI Aayog. He mentioned the Rs 1 lakh crore Urban Challenge Fund announced in the 2025-26 Budget, which seeks to build cities into centres of growth. He further said this year's Budget has announced Rs 5,000 crore for each of seven urban economic regions over a five-year period.
He emphasised that empowering city governments in a real sense is essential for better service delivery and active citizen involvement.
Drawing on the report Moving Towards Effective Urban Governance, jointly prepared by NITI Aayog and the Ministry of Housing and Urban Affairs, Gauba urged the introduction of directly elected mayors with five-year tenures. He also recommended a mayor-in-council arrangement and timely civic body elections.
According to him, states should hand over all 18 functions in line with the 74th Constitutional Amendment. These cover master planning, water supply, fire services and traffic management.
Gauba stated that cities cannot be governed effectively from state capitals, and that local governments need adequate powers and institutional strength to respond to local needs.
He also said urban local body revenues remain inadequate and that property tax and user charge collection must improve. While central Finance Commission grants have more than doubled and their share has increased from 36 to 45 per cent, the funds states provide to cities are still low.