The Economic Time, Updated: Feb 26, 2016
A recent debate on smart cities lauded the government’s recently unveiled mission. But it also highlighted several unresolved issues in city governance. The elephant in the room was the development-prohibitive structure of city bureaucracies that act as inefficient state and central government proxies.
The Smart Cities mission is a forward-thinking effort by the government, sparking an enthusiasm from the private sector in developing our cities for tomorrow. Foreign and domestic investors are lining up, attempting to demystify the mission and figure out how Indian cities actually work. Discussions with these stakeholders allude to very specific questions: Who’s in charge of the city? Is it the chief minister? Is it the mayor?
This lack of clarity can be very discouraging to investors. When they realise that city municipal authorities as urban local bodies (ULBs) hold some power, they are dismayed at their disjointed functioning, lack of technical capacity, poor financial accountability and zero say in fiscal adjustments. When assigning a rating to ULBs, these things matter a great deal. They compound to form the fundamental reason why over 95% of ULBs in India are not creditworthy.
Delhi aptly illustrates the complexity of Indian city administration today. It is a city, a union territory, a state and host to the central government. As a state, its citizens elect ministers to the state’s assembly who appoint a chief minister. However, separate elections are held for the Municipal Corporation of Delhi (MCD), which is trifurcated into three urban local bodies — North Delhi, South Delhi and East Delhi Municipal Corporations, each with their own mayors and deputy mayors.
New Delhi, a zone at the heart of Delhi, has its own municipal authority, the New Delhi Municipal Corporation, with its own elections and mayor. None of the mayors has the authority to take development-related decisions, each managing a meager mayor’s fund of approximately Rs 5,000 allocated per citizen.
The municipal commissioner, a bureaucrat, is the power centre in the ULBs. But then again, he or she does not have the liberty to make fiscal adjustments, as that becomes a state matter. The commissioner is also limited in power to mobilise other city departments, like the Delhi Jal Board.
The municipal commissioner can leverage and mobilise the police to enforce municipal laws. But even that power is curtailed since Delhi Police is answerable to the state home ministry and ultimately to the Union home ministry.
The Delhi Development Authority (DDA), which is the city’s zoning and development authority, isn’t governed by any institutional framework at the city level. Instead, it reports directly to the Union Ministry of Urban Development (MoUD).
Now take Washington DC. It has an empowered mayor, the singular point where the buck stops.
The 74th Amendment to the Indian Constitution, carried out in 1992, outlined a devolution of power to urban local bodies in our cities. It has been over 20 years since and we have yet to see true powers to completely control funds, function and functionaries be devolved to the cities. From a purely administrative perspective, the development of a city continues to require buy-in from the state and the Centre.
So, the Smart Cities mission does a great job in circumnavigating the core institutional issues plaguing Indian cities. Special Purpose Vehicles (SPVs) have been suggested as the ideal way to move the mission forward. They have traditionally proven to work well in bringing the private and public sectors in on one mission. However, there is a well-founded worry about such institutional structures leading to disconnected and pocketed developments in cities, reminiscent of Gurgaon’s unconnecting ‘gated communities’ model of the city.
Will SPVs lead to an equitable, climate-resilient and city-scale development for all citizens? Empowered city leadership and institutions will be critical for any smart city development in India. Should the current administrative set-up prevail even as SPVs are established to compensate for the lack of a powerful city administration, disconnected developments may continue to mar India’s urban landscape.
Perhaps it is time to revisit and activate the spirit of the 74th Amendment to the Constitution and fully devolve power to ‘city states’ that have an elected mayor, CEO or empowered minister — essentially a leader fully accountable and has the power to take urban development decisions.
The MoUD, on the back of the 74th Amendment, developed a Model Municipal Law (MML) as a guide to state governments on devolving key decision-making powers to their cities. There is a strong mention of empowering the mayoral seat in the MML.
While some cities have made strides in MML implementation, India’s core megacities continue to operate in a framework prevailing from the days of British rule. Given the urgency of developing equitable, resilient and responsive smart cities, making the implementation of the MML mandatory at the state-level can strengthen the backbone of the Smart Cities vision. This, in turn, can lead to the development of truly democratic and people-driven smart cities.
– By Rana Kapoor ,MD & CEO, YES BANK and Chairman of YES Institute