Brazil and Urban Governance Reforms: Lessons for India
Brazil is the world’s fifth-largest country by geography, the seventh-largest by population, and the most urbanised nation among the ten most populous countries on the planet. It also has one of the world’s most decentralised and democratised urban architectures. India, on the other hand, is the world’s seventh-largest country by geography, the largest by population, and the third least urbanised nation among the ten most populous countries on the planet. However, despite the Indian Constitution establishing a decentralised polity, recognising urban local bodies (ULBs) as the third tier of governance, and envisaging them as empowered self-governing institutions, meaningful ULB empowerment has yet to materialise. It would thus be interesting to compare the approaches of Brazil and India—two founding members of BRICS, an intergovernmental organisation—to urbanisation.
Historically, both countries had a colonial past. Brazil became a Portuguese colony in 1500 and suffered economic exploitation and pronounced social inequalities. In 1822, the Empire of Brazil was established, and the country was declared an independent kingdom. In 1989, the monarchy fell and was replaced by a republic through a military coup. The country subsequently experienced cycles of democracy and authoritarianism. In 1985, Brazil returned to democracy and adopted a new constitution in 1988. Today, Brazil is a major player among the world’s democracies: it is assertive, vibrant and dynamic.
Brazil’s Urbanisation and Decentralised Governance
Brazil’s approach to third-tier governance offers lessons for India. Brazil had a head start in urbanisation of several decades compared to India. Around 1940, it had already reached an urbanisation rate of 32 percent, the level India reached in 2011 (31.16 percent). By 2025, Brazil’s urbanisation had climbed to 88 percent, nearly 90 percent, with a total population of about 214 million.
This process was aided by rapid industrial growth in the mid-20th century, which generated large numbers of urban jobs and attracted millions from rural areas. In the 1980s, extensive agricultural mechanisation forced millions out of agriculture, triggering a second wave of urbanisation. Displaced by mechanisation, these people found refuge in Brazil’s large cities, leading to explosive urban growth and the rise of informal settlements known as ‘favelas’. Globalisation in the late 20th century was a further driver. Many transnational corporations made substantial investments in Brazil’s urban economy and attracted workers to these industries. Independent Brazil did not remain wedded to the colonial structure designed for cities by the Portuguese. Its post-colonial urbanisation marked a massive shift from the coast to the interior. The process encouraged decentralised urbanisation and saw enormous construction of road infrastructure and communication systems throughout the country.
Constitutionalising Municipal Autonomy in Brazil
The Brazilian Constitution stands out for the extensive treatment it affords to its municipalities. These provisions are embedded in the Constitution of the Federative Republic of Brazil, 1988 and the City Statute, 2001. The Constitution provides for municipal autonomy and the democratic management of cities. Its Article 18 granted ULBs political, administrative and financial autonomy. It places municipalities on an equal constitutional footing with the states and the Union. States were prevented from interfering with municipal decisions within their constitutionally guaranteed domains, and each municipality was allowed to establish its own local governance structure.
The Brazilian Constitution stands out for the extensive treatment it affords to its municipalities. These provisions are embedded in the Constitution of the Federative Republic of Brazil, 1988 and the City Statute, 2001.
In the financial domain, the Constitution mandates taxes that ULBs can collect, as well as mandatory federal and state transfers. The funding received by Brazilian ULBs suggests that they are reasonably well funded. In policymaking, ULBs have limited discretion in sectors such as health, education and the environment, where funds are tied to the implementation of federal guidelines. However, in some core municipal functions, such as urban planning, sanitation and local transport, ULBs are free to design their own policies.
Brazil’s urban governance structure has addressed the question of municipal leadership. The popularly elected mayor is the municipality’s chief executive and holds the executive powers of local government in a robust ‘mayor-in-council’ system. Serving a four-year term, the mayor oversees the budget, public services, transport, and overall urban development and planning. The officeholder also prepares the municipal budget for city council approval and executes it once approved. Although the mayor has no direct legislative power, they can veto laws.
In line with the Constitution, the City Statute expanded the framework for urban policy. It guaranteed citizen participation, public meetings and popular initiatives in the formulation of planning laws. Above all, the introduction of participatory budgeting (PB) stands out as an innovation that attracted global attention. PB is an arrangement that ensures popular participation in budgetary decision-making and resource allocation. The concept originated in Porto Alegre in 1989, gradually spread to other Brazilian municipalities, and subsequently reached many other countries. Furthermore, the City Statute emphasised the importance of establishing a new relationship between the state and the private and community-based sectors, especially regarding public-private partnerships (PPPs) and public-private property consortia, supported by transparent fiscal and social control mechanisms.
India’s Unfinished Decentralisation
Indian ULBs stand in contrast to their Brazilian counterparts across all the aspects discussed above. Before the Constitution (Seventy-fourth) Amendment Act (CAA), 1992, the Indian Constitution provided no framework for urban local governance, finances or planning. They were statutory creatures created and regulated by state legislatures under the State List of the Seventh Schedule. The Constitution thus left urban local bodies largely outside the framework of constitutional governance. Before 1992, therefore, ULBs were not constitutionally mandated institutions. Since the Constitution did not provide for them, their status was entirely dependent on the states. The states, in turn, retained control over ULBs, including through state-appointed chief executives, rather than granting them greater autonomy and financial strength. Furthermore, their elections were controlled by the state governments, and the popularly elected body could be dissolved at the state governments’ will.
The CAA addressed some of these shortcomings. It provided a five-year term for ULBs and brought in the State Election Commission to conduct independent local elections. Supersession of popularly elected local bodies was rendered very difficult. However, the 74th Amendment lacked the revolutionary features of the Brazilian urban architecture. The state-appointed municipal commissioners remained the chief executives; municipal functions and finances remained subject to state discretion, and city plans required the state’s final approval. These arrangements have remained unchanged to date.
Brazil’s experience provides a useful template for moving from constitutional recognition to substantive reforms that strengthen India’s cities and urban governance.
Conclusion
Brazil’s major urban reforms of 1988 and 2001 offer important lessons for India. Brazil is a much younger democracy and has nevertheless succeeded in establishing empowered ULBs and mayors, with greater municipal autonomy in planning, finance and administration. This should prompt Indian decision-makers to consider what led Brazilians to make far-reaching decisions about city governance and what prevents Indians from taking a similar leap, despite a similar intention expressed in the CAA more than three decades ago. Brazil’s experience provides a useful template for moving from constitutional recognition to substantive reforms that strengthen India’s cities and urban governance.
Ramanath Jha is a Distinguished Fellow at Observer Research Foundation.
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