Urban India needs reform.
Your report, "Urgent need for reforms in Urban India" by Shirish Sankhe, Ireena Vittal and Ajit Mohan (India Abroad, (May 7) is a breath of fresh air as far as urban India is concerned. The reasons for the urban decay have been well spelled out by the authors in their study, " India's urban awakening .." in these words : " Indian cities are paying the price for years of chronic under investment"; "India has not sufficiently recognized the complexity of city management "; " Surprisingly, there is little bottom-up pressure of citizens to improve governance." No Indian can disagree with this diagnosis.
A look at the BMC ( Mumbai Municipal Corporation), the richest municipal corporation with a revenue of about Rs.21,000 crore, illustrates the decay in the Indian cities. Every civic need and every civic amenity is inadequate – water, sewage treatment, roads, transport, education, open spaces, affordable housing etc. Almost 50/60 percent of the people live in slums. The same situation is repeated in other cities as well with some variation. Exodus from the villages in search of work and progress is the main reason which is compounded by inadequate civic facilities due to mis-management of funds and also lack of vision and lack of financial support from the state and central governments.
The authors of the study have given a number of suggestions to improve the governance through structural changes – empowered leadership ( elected Mayor), administrative system (city charters and MOUs), service delivery mechanism ( corporatization of civic functions), access to managerial talent ( a new civic cadre) and transparency as well as accountability ( proper accounting system, disclosure and state level urban regulator). .
Their recommendations to raise finance are well-tested in other well-administered cities all over the world – unlocking sources of revenue untapped like prime land in CBD or creating CBD like MMRDA – Mumbai Metropolitan Region Development Authority ( monetizing land assets can mobilize up to $27 billion a year in India); property tax ( now collects 0.04/0.08 of property value, one of the lowest in the world) ; municipal bond market ( raised only $800 million in the last 15 years due to poor internal financial management); proper user charges ( now collect only 60% of operational expenditure and zero percent of capital expenditure on water); financial support from the state and the central governments ( now, it is too little and too late – JUNNURM funds), devolution of powers/ functions ( not all 18 functions been transferred mentioned in the 74th Amendment urban local bodies in 1992).
This is a visionary report which has come at the right time when the Indian GDP is on an upward trend. One hopes that the politicians and, central and state governments discuss this study and come up with a consensus on the major recommendations to improve civic life in our urban area. The citizens of all urban India have to ask the politicians to 'fix the institutions that fix the roads' instead of asking them just to 'fix the roads', as the report rightly points out. McKinsey & Company's Mumbai office has done a great service to India with this report. The ball is on the court of politicians and people.
May 7,2010.
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