Globally, most urban planning techniques and practices at the municipal level and below approach issues of urban environment from the perspective of certain dominant paradigms. Such paradigms are based on two primary theoretical frameworks of ecological modernization and neoliberal planning. The paper showcases how the urban environmental reality in the context of Southern (developing) countries and at a local scale necessitates revisiting the theoretical frameworks. Ecological modernization, which relies on technocentricism and instrumental rationality, calls for innovation to solve environmental problems. Neoliberalism argues for a decentralized power structure and enhanced role of the actual stakeholders in development, particularly the market. It holds that economic growth takes care of livelihood issues, and hence also the environment. Planning strategies that evolve out of these paradigms are theoretically congruent with the aims of sustainable urban development. This paper discusses evidence from Kolkata, India, and contrastingly shows that cities can continue to have pockets of declining environmental conditions and deplorable living conditions while having ‘liberally-enabled economic growth’, ‘instrumental environmental management’, and a ‘decentralized planning milieu’. Evidence from Kolkata highlights reasons for the mismatch between the urban transformation pattern and planning practices. This paper identifies reasons behind this paradox and argues that such planning approaches having their origin in industrialized economies can be critical impediments to achieving sustainability in the South. This paper suggests applying a composite rationale in planning, the PRETAB planning process model, that addresses the main concerns raised.