The pace and growth of urbanization in India poses enormous challenges to urban governance. This article examines the institutional features and devolution mechanisms of the federal framework within which cities have to deliver better quality of life for their residents and generate an investment climate that is capable of sustaining the rapid growth. It argues that though planned urbanization is needed for the industry and services sectors and also for rural rejuvenation, the lack of empowerment of cities is constraining their ability to translate the urban development agenda into action. The article emphasizes the importance of bridging the urban infrastructure deficit and argues that institutional reforms are crucial for reaching out to the private sector for sharing the financing burden and ensuring that it results in improved service delivery. The experience of a pioneering national mission for urban renewal and the design of new national missions are reviewed to highlight the importance of strengthening reforms and capacity for planning and management at the local level. Though the Government of India will have to provide strategic leadership, some funding, and assistance in building capacity for urban planning and management, state governments will be the principal players in creating an environment in which city governments can discharge the responsibilities assigned to them by the constitution.