At the current rate of urbanisation, India would have taken two and a half centuries to urbanise to the current US levels, as against two centuries for the US and a single century for China.
In an interaction with Construction World–Swarajyamag Infranirbhar webinar on 3 March 2021, the Principal Economic Advisor (PEA) to the Government of India, Sanjeev Sanyal, laid great stress on city infrastructure and advised much larger investment in it. At the same time, he de-emphasised city master plans. He believed that inflexible master plans are a mistaken form of urban design. Rigid master plans had significant shortcomings and had resulted in “urban dysfunction.” He added that continuously evolving urban systems are key to efficient, effective urban development. One of the oldest cities on the face of the earth — Varanasi, he opined, has thrived by doing continuous adaptation. On the international stage, Singapore — cited as a great city — has continuously adapted. He further stated that “India is currently going through a phase of “rapid urbanisation.” He believed that “in the next 10 years, we will be an urban major country. Hence, I am in favour of heavily investing in urban infrastructure. We do not have to invest heavily on master planning and predestination of cities.”
Speaking on urban governance, he thought that this was an area where we paid least attention. “For instance, the municipal commissioners tend to be the junior-most people in the civil service with the least amount of experience. So, a 32-year-old person will be put in charge of a city, which he has never visited before, and will be given 10 months to revisit it. This is impossible for a person to do. The joint secretaries should be the ones running the cities.” He also felt that “We have the worst of all worlds where nobody is in-charge of the city. It may well be a better idea to have an elected official run the place and in charge for five years.” On being asked a question about nine cities having raised municipal bonds, he answered, “Most of the world does it routinely. Basically, we need somebody being in-charge of the system.”
Given the central significance of the Principal Economic Advisor (PEA) in decision-making at the central government level and his deep involvement in preparing the National Urban Policy Framework, his thoughts obviously carry weight. This article is an attempt to analyse his key statements and test their efficacy in the background of available facts.
The PEA reiterated a widely held perception, though erroneous, that India is going through a rapid phase of urbanisation. This is primarily a result of hitherto rising populations in struggling mega cities and the pressure brought to bear on their infrastructure. The truth is that India’s urbanisation has been painfully slow. Soon after independence, the 1951 Census put India’s urban population at 17.29 percent. This rose to 31.16 percent in 2011, giving an average decadal growth rate of 2.3 percent. Even if some space is allowed to the World Bank-backed theory of ‘hidden urbanisation,’ inferring that all of urbanisation is not captured in data on account of what administratively gets labelled as ‘urban,’ it still remains a fact that India’s urbanisation has been stalling. The United Nations Development Programme’s (UNDP) Human Development Report 2011, found only about 25 countries out of 178 that had urbanisation levels lower than India. Not much has changed since then. At the current rate of urbanisation, India would have taken two and a half centuries to urbanise to the current US levels, as against two centuries for the US and a single century for China. This should nationally be a cause of worry, since this has had adverse implications for India’s economic progress.
In the past, economists have argued for speeding up India’s urbanisation for high economic growth. The lack of affordable rental housing, the anti-city Indian mindset, inefficiently-held large tracts of urban land by public agencies, and the disastrous consequences of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFTLARR) on the ability of urban local bodies (ULBs) to acquire urban land, have all been pointed out as the culprits preventing urbanisation and growth. These matters should have been the subject of some discussion.
In regard to master plans, most cities around the world have a system of periodic plan preparation. Indeed, creations as complex as cities do need a great deal of forethought. Varanasi, mentioned as the constantly adapting city by the PEA, operates under the same planning statute that is operational for other cities in Uttar Pradesh. Its current master plan is valid till 2031 aiming to make Varanasi an economically vibrant, culturally rich, and liveable city. Singapore also follows a process of preparation of a Master Plan (MP) which is the statutory land use plan. It controls Singapore’s development over two to three decades and is reviewed every five years. The five-year plans convert the broad long-term strategies into detailed plans to guide the development of land and property. The MP shows the permissible land use and density for developments in Singapore. None of these plans are written in stone and allow for changes to be made. In India, material changes require a process to be followed that mandate transparency and a call for objections and suggestions. These processes could be speeded up or changes could be made much easier. Essentially this would mean a more rapid conversion in land use. However, given the past multiple experiences of land use conversion that have been mired in political outrages, one needs to tread that path with great care. Instead, authorities need to pick up the report of the National Commission on Urbanisation, 1988 and see what has happened to its recommendations. In many ways, urban dysfunction is a result of its non-implementation.
Discussing urban governance, the PEA had observed that junior officers are in charge of cities whereas they should be handled by joint secretaries. The statement appears misinformed. Just as there is a hierarchy of cities in size and complexity, there is a hierarchy of officers of different seniority that get posted to urban local bodies (ULB). Mumbai’s municipal commissioner is generally of the rank of a secretary to the government of India and other larger cities have officers of joint secretary rank manning such cities. India has about 350 joint secretaries that are called upon to handle significant positions in central and state governments, parastatals, and large ULBs. Their availability, therefore, for all large cities (about a 100 in number) does not appear to be a physical possibility. His suggestion that an elected leader could be the chief executive of cities with a five-year term is very sensible and has repeatedly been recommended by committees. This, however, has not been politically acceptable, as this would put great power in the hands of mayors in the most significant economic centres. However, it would be ideal if a move in that direction is taken up by the PEA.
The PEA skirted the question on municipal bonds and blamed governance deficits as the cause why this source of revenue had not been explored by many other cities. This appears a naïve analysis. The fact is that not many cities in the country fit the bill since they have antiquated accounting systems and are financially emaciated. Most cities follow the single-entry cash-based accounting system that does not allow the kind of transparency that market organisations are looking for. They need to switch over to the double-entry accrual-based accounting system. Furthermore, for raising municipal bonds cities need to get credit-rated by a professional rating agency. Very few Indian cities have the finances to get a reasonably good credit rating that would enthuse lenders to put their money in the hands of ULBs. The point that needed to be highlighted was that Indian ULBs are globally among the least-funded entities. And it was this situation that required to be set right. Bereft of a reasonable revenue stream, an emphasis on other issues does not serve to be a worthwhile antidote.
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Dr. Ramanath Jha is Distinguished Fellow at Observer Research Foundation, Mumbai. He works on urbanisation — urban sustainability, urban governance and urban planning. Dr. Jha belongs ...
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