Cities must transform to gain from reform push, finds report
The Annual Survey of India’s City-Systems: Shaping India’s Urban Agenda noted that urbanisation in India is outpacing outlays in civic spending
To realise the benefits of enhanced central government investment in urban infrastructure and service delivery since 2015, cities across India must reform their institutional and financial capacities through ten “instruments of change”. That is the key recommendation of the ‘Annual Survey of India’s City-Systems: Shaping India’s Urban Agenda’ (ASICS) by Janaagraha Centre for Citizenship and Democracy released on Tuesday.
These instruments include constitutional amendments to empower cities, metropolitan governance, empowered mayor-in-council, participatory governance, digital public finance management, municipal reforms, spatial development plans, etc. (see box).
The ASICS report noted a 488% increase in the outlays to the Ministry of Housing and Urban Affairs (Mohua)-- from around ₹8,000 crore in 2009-10 to around ₹47,000 crores in 2021-22. There has been an increase in spending, particularly from 2015-2016 onwards, with the union government’s introduction of several urban missions and schemes, metro rail, and infrastructure projects. Additionally, there’s funding under the 15th Finance Commission to the states.
“Yet, we are playing catch-up because urbanisation in India is outpacing these efforts, resulting in persisting or rising challenges in the quality of life,” says the ASICS report, blaming the poor “urban governance or city-systems… that are invisible yet critical”.
As a remedy, it recommends “a twin track approach of projects and reforms” where the state governments take the leadership, with a rider cautioning against a “one-size-fits-all” approach to urbanisation.
Published after a gap of five years, the ASICS report by Janaagraha, a Bengaluru-based not-for-profit institution working on urban systems, has this time focused on the state as a unit instead of ranking cities as they did in the past.
“There are many cities in the same state, and many states have multiple municipal Acts. Bengaluru, for instance, has its own Act, but other Acts govern other cities in Karnataka,” said Srikanth Viswanathan, chief executive officer at Janaagraha, adding that the report has covered all 4,800 cities in 35 states/UTs in India.
Launching the report, Hardeep Puri, Union minister of housing and urban affairs, said, “It was truly a meticulous and praise-worthy effort.”
“I endorse the ten key recommendations made in the report. They can deepen the principles of decentralisation and devolution in urban governance and revitalise the spirit of the 74th Constitutional Amendment Act, 1992,” he said.
How much of India is urban
The ASICS report has also raised a critical existential question: how much of India is actually urban?
According to the 2011 Census, India is 31% urban. The satellite data of the Global Human Settlements Layer of the Group on Earth Observations at the European Commission pegged it at 63% — more than double the 2011 census estimate — in 2015.
The following year, a World Bank report found India’s definition of urban too stringent and estimated our urban population to be over 50%. Similarly, if India were to go by the definition followed by Ghana, it would be 47% urban, and by Mexico’s standards, it would be 65% urban.
Urbanisation could be estimated more accurately from data on mobility and labour markets, density and built-up forms, and night-time data, says the ASICS report, pointing out that states do not consider some of these in defining statutory towns.
For example, there are census towns near megacities with a population of up to 75,000 — larger than many statutory towns in the same state. “The way urban is defined has far-reaching consequences on planned urbanisation of census towns and peri-urban areas that display the characteristics of urban areas yet are governed as rural,” the report says.
Although dated, the 2011 census still provides enough data to inform urban policy, said Viswanathan, adding that spatial contiguity — census towns and small towns close to large cities – would help these areas take advantage of each other’s strengths.
This approach offers an opportunity, points out the ASICS report, to “leverage platform/gig economies, drive job creation and economic growth and technology and innovation through agglomeration economies, reduce carbon footprint, and establish sustainable farm-to-fork supply chains for cities, all at once.”
Uniform strategy won’t work
But a diverse country such as India, the ASICS report points out, cannot have a uniform urban strategy. “Often, these cities have no differentiated approach to funding and governance. They are largely governed by similar legislations and funded by similar schemes and missions,” it says.
Viswanathan cited the example of Jharkhand: “There are five districts here, which are more urbanised than the national average of urbanisation. But Jharkhand itself is below the national average. So, you cannot say Jharkhand is a less urbanised state. You will miss the bus if you don’t focus on these (nuances).”
Urban flooding, potholed roads, traffic snarls, poor waste management, pollution, and all such recurring urban challenges directly related to the citizen’s quality of life, have their “root cause within city systems,” the ASICS report says. By ‘city systems’, it means urban planning and design framework, urban capacities and resources, empowered and accountable mayors and councils, and transparency, accountability, and citizen participation in neighbourhood-level governance.
Its analysis of 35 states and UTs found that only 5% of amendments to municipal legislation up to December 31, 2022, related to ‘city systems’. East Indian states -- Bihar, Chhattisgarh, Jharkhand, Odisha, and West Bengal -- have relatively better urban legislation, followed by southern states of Andaman and Nicobar Islands, Andhra Pradesh, Karnataka, Kerala, Puducherry, Tamil Nadu, and Telangana. They also had more empowered mayors, with Bihar, Jharkhand, and Odisha having directly elected mayors with five-year tenure.
Maharashtra, Kerala, and Andhra Pradesh have mandated regional and sector-specific planning for sanitation, resilience, mobility, sustainability, heritage conservation and social development. However, the laws of UTs lack transparency, accountability participation and empowerment of mayors and councils.
Robust planning is fundamental but 39% of the capital cities in India do not have active spatial plans, according to the ASICS report. Also, the existing plans lacked coordination with regional and municipal institutions. There’s a need to look away from land-use planning and prepare, implement, and enforce spatial development plans by integrating the 4 Es of economy, equity, environment, and engagement.
Devolve planning process
Calling for devolution of the planning function, the report says that development authorities and not the city governments were leading the process, the only exception being Mumbai, where the mayor and other civic functionaries serve in the planning committee. Good planning needed capacity. Therefore, cities need to hire more trained urban planners, it recommends.
Thirty years since the enactment of the 74th Constitutional Amendment Act (on devolution of powers) to local bodies, an “honest assessment would reveal a glass less than half-full,” the ASICS report says, adding that only 42% of the 74th CAA has been implemented by states.
It also calls for an upgrade in the law itself as it did not factor in “new urban realities and aspirations of 21st century India such as an empowered mayor as a single point of executive authority, a metropolitan governance framework for larger cities… devolution of functions such as climate, public health, and digital infrastructure to cities” etc.
The ASICS report notes that mayors and councillors played an essential role in solving “delivery issues at the first mile.” But In India, it says, mayors and councillors didn’t have adequate powers because of “the restricted devolution of functions and powers over funds and functionaries, short tenures in office and a policy of rotational reservations,” reducing our city governments to just another civic service delivery agency.
The lack of adequate revenue sources severely constrains the ability of our cities to invest in infrastructure and service delivery in a manner that is responsive to the needs of its citizens. Fiscal decentralisation remains a nascent reform. Only one state, Assam, has devolved the power to levy all essential taxes only to municipal corporations. Buoyant revenue sources such as stamp duties and registration charges on properties and motor vehicle registration charges are generally not devolved to cities or are nominally assigned.
Only about 20% of municipal expenditure is covered by property tax, the report says, recommending that the city governments optimise their revenues by evaluating each stage of the revenue streams and thereafter measures to gain assurance on revenue efficiency.
“The ten instruments of change can be set in motion almost immediately and transform the quality of governance in Indian cities. But most of the responsibility for bringing these changes lies with the state governments. The Union government can bring constitutional amendments and perhaps leadership in ideas, innovation or funding. But it’s the state’s responsibility because the municipal, town, and country planning laws are state legislations,” said Viswanathan.