‘Bengaluru Metropolitan Planning Committee met just 3 times since 2016’: CAG audit slams Karnataka’s slow progress on local governance

The compendium synthesizes findings from a first-of-its-kind series of performance audits conducted by the CAG, evaluating the implementation of the 74th CAA, which provides constitutional status to ULBs, across 18 states. Janaagraha, a Bengaluru-based non-profit organisation, has contributed to the development of this compendium.

The audit covered 393 Urban Local Self-Governments (ULSGs) across 18 states. The audits were carried out during 2019–2024, with Karnataka being the first state to complete its audit.

The report assumes significance in Karnataka especially with the government not holding the BBMP elections for nearly four years to appoint a Mayor for Bengaluru, when the city is grappling with severe infrastructure woes. The audit reveals that the Metropolitan Planning Committee for Bengaluru has met just three times since 2016.

Legislative changes fall short in practice

Karnataka’s legislative changes aim to transfer 17 of the 18 functions outlined in the 74th Amendment to ULBs. However, the CAG report found that critical functions, including urban planning and land use, remain under the control of state-managed parastatals such as the Urban Development Authorities (UDAs) and Town Planning Authorities (TPAs).

While ULBs are tasked with functions like maintaining public markets and overseeing street lighting, they hold minimal control over larger planning functions essential for sustainable urban growth. The functions ULBs do manage independently are typically limited to areas like maintaining cremation grounds and cattle pounds. This lack of control over critical urban development tasks has hindered the ability of ULBs to respond directly to local needs and has limited their role in driving inclusive city growth, the report highlighted.

Financial constraints undermine ULB effectiveness

The report highlighted significant fiscal challenges facing Karnataka’s ULBs, which remain largely dependent on state allocations. Although the State Finance Commission (SFC) recommended higher financial support, Karnataka fell short by Rs 15,564 crore in state transfers between 2014 and 2019. The Urban local Bodies are left to operate with limited autonomy over revenue generation, as the state controls key local taxes, including property and advertisement taxes, and grants only partial access to revenues from taxes like property tax and fees. Consequently, local governments struggle to develop independent funding sources, leaving them dependent on state-controlled fiscal transfers, which account for about 63% of their revenue.

Citing an “unrealistic” budgeting process and limited local input in financial decisions, the audit warns that Karnataka’s ULBs face constrained capacity to meet local infrastructure and service needs. The report urges the state to empower ULBs to generate revenue through local taxes and to design a fairer revenue-sharing model to build financial stability.

Overriding state control and administrative challenges

Karnataka’s state government retains significant control over the operations of ULBs, undermining their intended autonomy. The report criticizes the requirement for ULBs to seek approval from district administrations before proceeding with projects funded through their own resources. These administrative bottlenecks, combined with rigid staffing and recruitment policies set by the state, limit ULBs’ ability to operate independently.

Staff shortages, particularly in technical roles, have impacted the delivery of key services, from waste management to public health. The CAG also noted that ULB leadership suffers from high turnover, with mayors serving only one-year terms and council presidents limited to two and a half years. This short tenure disrupts continuity in policy implementation, as leaders often change before they can see their plans executed. Moreover, the absence of ward committees in most areas limits community participation in governance, with citizens having limited influence over local decisions.

Non-functional planning committees

To further decentralise planning, the 74th Amendment mandates District Planning Committees (DPCs) and Metropolitan Planning Committees (MPCs) to coordinate development across urban and rural areas. In Karnataka, however, these committees have largely remained non-functional.

The audit reveals that the Metropolitan Planning Committee for Bengaluru has met just three times since 2016, while DPCs in several districts have failed to meet consistently, preventing the development of cohesive district plans. The report calls on the state to ensure that these bodies meet regularly, emphasizing that their inactivity has stalled comprehensive regional development plans that consider water, infrastructure, and resource management.

Key recommendations

To address the deficiencies in Karnataka’s approach to decentralizing urban governance, the CAG audit makes several urgent recommendations. The report suggests granting ULBs greater autonomy in collecting local taxes and setting up a more balanced revenue-sharing framework. The state should ensure the regular functioning of DPCs and MPCs to coordinate district and metropolitan planning effectively. The report suggests that ward committees should be formed across all ULBs to increase citizen participation in local governance, a crucial factor in aligning development priorities with community needs.

The audit suggests extending the tenure of mayors and council presidents to improve stability in local leadership, thus fostering continuity in governance. The report notes that the state should reduce bureaucratic controls over ULB project approvals and delegate more authority in staffing and resource management to ensure timely and effective local governance.