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Time bomb is ticking
away for India’s cities

By Subir Roy, Business Standard

6 February, 2008: India is facing a massive urban crisis, whose solution is nowhere in sight. This is partly because what kind of a time bomb the crisis represents - how quickly things are likely to reach unbearable proportions - is not fully appreciated by most. The crisis has many facets but it is only the clogged roads that are seen to be for what they are: impossible to live with. Issues like having enough water and power and getting rid of waste are considered serious but not seen as coming to a head soon.

More shortsighted is the attitude to health. Growing respiratory problems and rising healthcare expenditure, enabled by growing incomes, seem to have established a strange dynamic equilibrium, with little thought as to where this will ultimately lead. There is of course the least concern over aesthetics. For the most part we live in filthy, ugly towns and cities which are losing whatever little heritage and ancient trees they have had, and most of the population seems eager only to rush to the shopping malls and own a two-wheeler or maybe a car.
The industrial revolution initially led to rising incomes accompanied by horrible living conditions for most. Even as recently as in the sixties, many western cities were plagued by massive traffic jams and smog. But today they are far more habitable and pleasant places. One day the quality of life in urban India too will improve. But regretfully we seem not to have learnt from the mistakes of others and charted a different course.
The most important policy response to the urban crisis is the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), under which the Centre, states and urban bodies are on course to invest thousands of crores (1 crore = 10 million) in correctly identified urban renewal projects, sometimes in the public-private partnership mode. There is also an attempt to make central funding conditional on carrying out certain policy and structural reforms, these being divided between “mandatory” and “optional”. But money has begun to flow even as reform has been slow to take off. Most of the funds sanctioned so far have gone to the western region, but Maharashtra, its flagship, has had to be threatened and cajoled into carrying out the most elementary reform, getting rid of the urban land ceiling law.
The main problem with the JNNURM, given the task on hand, is that it lays insufficient stress on institutional reform. If such reform is inadequate then individual projects will undoubtedly ease things a little but the structure that creates burgeoning crises in the first place will remain to torment us. The obverse is that with rapid economic growth and urbanisation going hand in hand, cities which have the right governance structure in place will not only be able to order themselves liveably but pay for their keep!
The most obvious issue in this regard is levying and collecting property taxes the right way so as to enlarge coverage and collection efficiency. The JNNURM mandates a switchover from the rateable value-based system to the capital value-based system of assessment and fixing rates. But just wait and see how long it takes for most important towns and cities to first have this type of system in place and then the right kind of staff who can run the system efficiently and are not poorly paid and corrupt!
The lack of realisation of the primacy of having the right institutional structure in place and the skills to run it is evident in a news release from the ADB announcing a $350 million funding to improve Uttarakhand’s urban infrastructure. It identifies the right areas of action like drinking water, waste management and roads and then, “in addition”, capacity building for management. That should really be the first point on the agenda.
The quality of staff and skills in urban local bodies is appalling. Senior and key management levels are manned by state government officials on secondment. No wonder, even cities which have the size and the need do not have a proper management cadre centred in the town hall. The JNNURM mandates that district and municipal planning committees will have to be set up, as required by the 74th amendment to the Constitution. But who will man these committees at municipal level? Or will the plans that eventually emanate be top down exercises guided by the relevant deputy commissioners?
It is doubtful if all the reforms asked for by the JNNURM will be in place in its remaining five-year life. In individual instances, a state has not even made a commitment; the status is indicated as “under negotiation”. But even if the reform agenda of the JNNURM is in place in time, that will not be enough to give us an adequate quality of urban life. There are vital areas of institutional reform, which the JNNURM does not even touch. What is more, for a properly empowered system to arrive at the right policies, there has to be a correct understanding of key issues. Right now no more than a small minority of those who think and argue about these things have the necessary approach. A subsequent column will outline the key actions and thought processes without which we will continue to wallow in our urban mess.

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