• Odisha announced a ₹560 crore special infrastructure package for its 28 newly constituted Notified Area Councils (NACs).

• Core Announcement: Odisha announced a ₹560 crore special infrastructure package for its 28 newly constituted Notified Area Councils (NACs) — allocating ₹20 crore each for roads, drainage, civic facilities, and markets — on State Local Self-Government Day (August 31).
• Mukhyamantri Sahari Bikash Yojana: 593 urban projects worth ₹323 crore launched across 62 Urban Local Bodies (ULBs).
• Institutional Capacity Building: Memoranda of Understanding (MoUs) were signed by the Odisha Urban Academy with Sri Sri University, the Indian School of Business (ISB), and the National Institute of Urban Affairs (NIUA).

Constitutional Provision for NACs

• Under Article 243Q(1)(a) of the Constitution (74th Constitutional Amendment Act, 1992), a Nagar Panchayat (referred to as a Notified Area Council in many states) is constituted for a transitional area — an area transitioning from a rural to an urban character.
• Factors determining classification (Article 243Q(2)): population size, density, percentage of employment in non-agricultural activities, and revenue generation potential.

Managing the “Rurban” Transition & Tier-3 Urbanization

• Peri-urban zones often face rapid demographic shifts without commensurate civic infrastructure, resulting in unorganized sprawl.
• Dedicated capital outlays for newly declared NACs ensure planned development (stormwater drainage, arterial roads, and solid waste systems) before unplanned densification sets in.

Addressing the “3Fs” Deficit (Funds, Functions, Functionaries)

• Funds: Indian ULBs suffer from chronic fiscal dependency on inter-governmental transfers. While capital grants jumpstart basic works, long-term fiscal sustainability requires reforming own-source revenue (property tax base expansion, user charges).
• Functionaries & Capacity: Urban planning in small towns is hindered by weak administrative capacity. Partnerships with institutes like NIUA and ISB aim to modernize ULB municipal cadre training, project implementation, and e-governance delivery.

Cities as Growth Engines vs. Administrative Entities

• Moving beyond viewing municipal bodies simply as residential service providers to developing them as centers of commerce, market connectivity, and regional employment buffers that mitigate distress out-migration to megacities.