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Phase V training, December 12th 2010-January 14th 2011

Strategy Paper(Revised): Ministry of Urban


Development, Government of India

D Lakshmi Parthasarathy, IAS (1980, AP)


Kewal Kumar Sharma, IAS (1983, AGMUT)
Lal Bahadur Shastri Academy o f
Administration , Mussorie
Contents
Strategy – Concept and Need .............................................................................................................. 5
Section 1: Ministry’s Vision, Mission, Objectives, and Functions ..................................................... 6
Section 2: Assessment of the situation ................................................................................................ 9
What external factors will impact us? ........................................................................................... 10
Historical Neglect of Urban Development ................................................................................ 10
The importance of cities ............................................................................................................. 11
Who are our stakeholders?............................................................................................................. 16
What are our strengths and weaknesses? ..................................................................................... 16
What do we need to learn? ............................................................................................................. 18
Section 3: Outline of the Strategy ...................................................................................................... 19
What are potential strategies? ....................................................................................................... 19
Strategy for Urban Finance ........................................................................................................ 19
Strategy for Infrastructure ......................................................................................................... 24
Strategy for Transport ................................................................................................................ 28
Strategy for Town and City Planning ......................................................................................... 30
Common Strategies for all Sectors in Urban Management...................................................... 32
How will we build our knowledge and capabilities? .................................................................... 34
What are the priorities?.................................................................................................................. 34
Section 4: Implementation Plan ........................................................................................................ 35
Strategic Initiatives ......................................................................................................................... 35
Stakeholder engagement: Who, When, and How? ....................................................................... 35
How can the stakeholders help? ................................................................................................ 36
Learning Agenda ............................................................................................................................. 37
Resources required ......................................................................................................................... 37
Tracking and measuring: Measurables and observables to assess progress, methods of review,
methods of corrective actions ........................................................................................................ 37
Overall Plan and milestones: Detailed activities, points of coordination, milestones, and
review points ................................................................................................................................... 38

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Section 5: Linkage between Strategic Plan and RFD ....................................................................... 41
Section 6: Cross departmental and Cross functional issues ............................................................ 44
Linkage with potential challenges likely to be addressed in the 12th Plan .................................. 44
Identification and management of cross departmental issues including resource allocation
and capacity building issues........................................................................................................... 45
Cross functional linkages within departments/offices................................................................. 45
Organizational Review and Role of Agencies and wider public service ...................................... 46
Section 7: Monitoring and Review arrangements ............................................................................ 47
Conclusion........................................................................................................................................... 48
References ........................................................................................................................................... 49

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What is the city but the people?
~William Shakespeare

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Strategy – Concept and Need

In a seminal article published in Harvard Business Review (1996), Professor Michael Porter
wrote on what defines strategy as an organizational endeavor.

He was emphatic to underline that strategy is over and above organizational and operative
effectiveness. Indeed, operational effectiveness was described by him as “necessary but not
sufficient” for the overall goal-setting exercise inherent in a corporation (public or private).

The heart of a strategic endeavor can be defined by (i) adopting a set of unique activities (ii) a
well-thought out position on what trade-offs to achieve (iii) sustainability in terms of natural
resources and (iv) interdependence of various components.

In fact, the honorable Minister for Home Affairs(formerly Minister for Finance),
P.Chidambaram, made it quite clear that he thought the highest component of a Finance
Minister’s job was not minutiae, but the ability to step backwards and frame a philosophy.

In (what we believe to be) the most complex country in the World to administer, that is a jewel
in advice. Not just for Finance Ministers, but for all public servants.

In order to outline a strategy for urban development in India and to lay out a strategic plan, an
effort has been made herein to create a strategy document which is more than a checklist of
virtuous intentions; a holistic, interconnected, and self-sustaining series of activities that will
enable (with political and administrative support) a reform programme to find its own feet is
what has been attempted.

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Section 1: Ministry’s Vision, Mission, Objectives, and Functions

The Ministry of Urban Development is responsible for formulating policies, supporting


programmes, monitoring programmes, and coordinating the activities of various central
ministries, State Governments, and other nodal authorities in so far as they relate to Urban
Development concerning all the Issues in the country.

In terms of the allocation of Business Rules, the Ministry of Urban Development is concerned
with the various properties belonging to the Union Government. The mandate of the Ministry
can be seen in the

The Ministry Of Urban Development has the responsibility of broad policy formulation and
monitoring the programmes in the areas of urban development, and urban water supply, urban
transport and sanitation. These are primarily State subjects, but the Government of India plays
a coordinating and monitoring role and supports various programmes in the urban development
sector through centrally sponsored schemes. In recent years, the urban sector in India has
undergone major changes following the country’s transition towards a market based economy,
and decentralization of powers to the local bodies through the constitution(74th) Amendment
Act, 1992.

Urbanization in India has become an important determinant of National Economic Growth and
poverty reduction.

The process of Urbanization in India is characterized by a significant increase in the number of


large cities. At current rates of growth, urban population of India is likely to reach a staggering
total of 575 million by 2030 AD. 35 cities in India already have a population of a million-plus as
per the Census 2001. It can be seen that India is the midst of transitioning from a predominantly
rural to a quasi-urban society. However, this transition doesn’t appear to have been
accompanied by a commensurate increase in the provision of basic urban services like water
supply, sewerage, solid waste management, urban transport, affordable housing for all sections
of the urban population.

While remaining fully engaged with its core mandate which requires the ministry of Urban
Development to steer the agenda in the domain of Central Organizations associated with the
Ministry of Urban Development such as the Town and Country Planning Organization(TCPO),
National Building Construction Corporation(NBCC), Central Public Works Department(CPWD),
Lands and Estates, and Government Properties, and other such organizations, the ministry of
Urban Development has been envisaging and implementing several schemes to promote an
orderly and sustainable process of urbanization in the country which would support economic
growth and inclusive development. The flagship programme of the Ministry in this regard in the
11th Five Year Plan is the Jawaharlal Nehru National Urban Renewal Mission.

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The MoUD (JNNURM) has a few other schemes for creation of infrastructure, slum
development, and for providing basic amenities in the urban sector as well. A few the main
schemes relate to

i. Supporting Urban Transport Planning

ii. Financing of buses for Urban Transport under JNNURM

iii. Mass Rapid Transit System(MRTS)

iv. Capacity Building Scheme for Urban Local Bodies, etc.

v. Rajiv Awas Yojana, etc.

The MoUD recognizes that the pace of urbanization is set to accelerate as the country embarks
on a more rapid economic growth trajectory. There are about three hundred million Indians
that currently live in the towns and cities that are under serviced, have inadequate housing, and
are experiencing severe traffic congestion. In another twenty five years, 300-400 million people
would be added to the Indian towns and cities. If not well managed, this inevitable increase will
place enormous stress on the system.

The Eleventh Five Year Plan has noted that the contribution of the Urban Sector to India’s GDP
was 62-63% and is expected to increase to 70-75% by 2030. It is now well envisioned that
Indian cities will be the engines of economic growth over the next two decades. The realization
of the ambitious goal of 9-10% in economic growth in GDP would fundamentally depend on
making cities more livable, inclusive, bankable, and competitive.

It is in this background that the JNNURM has been launched by the MoUD, GOI, so as to
upgrade the quality of life in the Indian cities, and to provide allocation of substantial central
financial assistance to the cities for development of infrastructure, housing, and capacity
augmentation.

The main components of the JNNURM merit reproduction briefly as below:

Provision of Urban Infrastructure projects relating to water supply, urban transport, sewerage,
solid waste management, roads,(urban infrastructure and governance- UIG component) etc in
65 mission cities

Linked to the UIG is the capacity building initiative that deals with creating rapid training
programmes, preparation of Detailed Project Reports (DPRs), and project implementation and

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capacity building initiatives. The funding under JNNURM is linked with implementation of a list
of mandatory and optional reforms by states and Urban Local Bodies (ULBs)

The other components of JNNURM are provision of basic services to the Urban Poor in the 65
mission cities, Urban Infrastructure and Development Scheme for Small and Medium Towns
(UIDSSMT), and Integrated Housing and Slum Development Programme (IHSDP).

The mandatory reforms require the State Governments to implement decentralization measures
as envisaged in the 74th Constitutional Amendment, which entail transfer of functions and
constitution of metropolitan planning committees and district planning committees, Adoption
of modern accrual based accounting systems in ULBs, reform in rent control, introduction of
eGovernance systems like GIS, MIS in ULBs, levy of user charges by ULBs, rationalization of
stamp duty, enactment of community participation law and public disclosure law, and
earmarking of budget for basic services to the urban poor.

The urban local body reforms require 85% collection through property tax, 90% collection
efficiency, and 100% cost recovery for O and M for water supply sector, and 100% cost recovery
for solid waste management

The optional reforms under JNNURM require repeal of Urban Land Ceiling and Regulation Act,
introduction of property title certification systems in ULBs, earmarking 20-25% of developed
land for LIG/EWS, computerized registration of land and property, and encouraging public
private partnerships.

The other functions of the MoUD relate to its administrative and oversight responsibilities over
various statutory and non statutory organizations that function under the administrative control
of this ministry. The mandate of the Ministry in accordance with the Rules of Business can be
seen in the annual reports of the Ministry.

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Section 2: Assessment of the situation

Speaking to a group of Indian Administrative Service Officers (of 1980, 1981, 1982, and 1983
batches) at the Harvard Kennedy School in December 2010, Prof. Alan Altschuler dealt with the
following key questions while dealing with globalization and urbanization in the Indian
Perspective.

1. Why are globalization and urbanization such powerful modern trends and how closely
are they intertwined?

2. Is the world increasingly “flat” (as Thomas Friedman says) or “spiky” (as Richard Florida
says)?

3. How much discretion do policy makers have within the framework of global forces?

The summary of answers provided by Prof. Altschuler is as follows:

1. Globalization is leading to companies contracting, outsourcing, across vast distances and


India is a great beneficiary.

2. Even though great migrations happen, there is still far less freedom for people to move
across borders. The migrants gravitate to places of opportunity, mainly from rural to
urban.

3. The Governments would be able to resist globalization only at very high cost as per
nearly all economists.

4. The World Economy is of competitive capitalism. The countries can usefully provide a
good business environment(rule of law, limited regulation and taxation, excellent
infrastructure and education)

5. Competition and prosperity are concentrated mainly in several dozen urban regions
across the globe

6. People get “smarter” as they densely interact. The cities are the seedbeds of innovation
and increase productivity(Edward Glaeser)

7. China, since 1980 has embraced urbanization, India less clearly.

8. Nationwide (2008), India has invested 3.6% of GDP in infrastructure while China has
invested 10.6%.

9. Cities thrive largely by attracting capital. Talented people seek a high quality of life.

10. The United Nations Population Fund 2007 Report brings out the following:

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i. “History gives [no] support to the notion that migration can be stopped or even
significantly slowed”

ii. Poverty is more visible in cities but less severe

iii. Birth rates decline in cities, modern skills increase

The conclusion is that Governments should welcome and plan rapid urban growth rather than
strive to discourage it.

The recent McKinsey Global Institute publication recommendations , in the same way, also
propose drastic local government reform and vastly increased investment in both urban
infrastructure and affordable housing, and that they need to be taken up vigorously for
implementation and moving forward.

This discussion brings out the need for facing the challenge of urbanization upfront and to make
investments in cities that are needed to make them the best places to live and thus contribute to
the Economic output.

What external factors will impact us?

Historical Neglect of Urban Development


Sometime after the middle of the last century, there was a worldwide movement that decried the
role of cities and the urban transformation that was slated to end the era of the individual. There
were trenchant critics even before (like the poet WH Auden and his anguish – The Unknown
Citizen). Humanity was seen as being lumped into large vats of consumption for the
requirements of gigantic governments and corporations.

Jane Jacobs, one of the most influential thinkers of her era, predicted the demise of the city as a
communal unit in her The Death and Life of Great American Cities (1961). Ivan Illich, while not
specifically commenting on cities, made a passionate argument against the industrial society in
general.

Closer home, the most influential Indian of the twentieth century, the Mahatma, was the
strongest supporter of de-urbanization and de-industrialization – each of which he saw as
militating against the existence of village as a self-sustaining unit of human existence.

In fact, but for the past 10 years, the role of urban development has been treated with suspicion
by Ideologues and fear by Politicians.

We see this as an unfortunate series of events. Compared to many East Asian countries, India
has clearly failed to capitalize on the Urban Environment as an engine of economic and social
progress.

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The Chairman of the Unique Identification Authority of India (UIDAI), Nandan Nilekani,
expressed some hope in this regard when he pointed out that delimitation exercises have been
successful in allowing more cities to claim a larger number of constituencies. This, he foresees,
will make cities more critical in a political discourse.

That cities have often been cut out of political processes is singularly unfortunate – India’s
greatest Economic prosperity in the four hundred years from the 3rd century BC, was built up
almost exclusively on the strength of her urban achievements. The commerce of Pataliputra, the
ports of Muziris, and the glamour of Vaishali were all urban.

The most famous example of Indian civilization tragically going down is of course the Harappa
valley(stretching to Gujarat), which, even today, brings out the inherent ability of Indians to
organize a complex, networked, and sustainable mode of mutual interaction in an urban setting.

The importance of cities


A more recent argument (which has also met with a quiet demise) regarding the irrelevance of
urban agglomeration relates to the advances made in technology, and therefore, the consequent
irrelevance of the cities.

The argument goes thus: “Since technology and networked governance seemed to be creeping
inexorably into our daily lives, the necessity of cities as communal powerhouses of diverse
ability is bound to come down. When offices vanish from Commercial complexes into the
comfort of a bedroom, when cell phones and computing power will enable us to connect to the
entire globe without sacrificing on geographical privacy, the notion of cities will start giving
way to an extended suburbia. This new situation will enable people to live where they want,
but without sacrificing on the quality of work they do.”

The experience of the last ten years, with the massive influx of daily-to-use-technology, has all
but demolished this thesis.

The city seems to be here to stay.

Why has this happened? Some reasons are offered as follows:

Economies of Scale and Transportation


The cities are the most efficient entities of achieving economies of scale and transportation. This
is perhaps the most crucial reason cities will continue to grow as the powerhouses of human
endeavor. In fact, there is considerable evidence to suggest that there is significant knowledge
spillover – in that it benefits both the receiver and the sender – helping them become better

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professionals. Economists Adam Jaffe, Manuel Tratjenberg, and Rebecca Henderson have
conducted studies and published literature which points very strongly at the sustained ability of
cities to reinvent themselves through their human capital, and adjust to the dynamics of social
evolution.

The importance of personal contact


Face-to-face contacts are very important among human relations. Finance, among the most
spatially concentrated of industries, is a perfect example. As Mario Polèse explains, Trust must
be constantly renewed; millions of dollars will be committed based on a brief encounter.

Smaller recruitment problems, not to mention training facilitation are also a positive spinoff.

In addition, this sort of proximity is also crucial in industries where it is important to locate new
firms in the proximity of similar firms. In fact, there have been three theories for this: Jane
Jacobs’, Marshall’s, and Michael Porter’s. While they differ in the specifics, they are quite clear
that there is palpable gain from operating in environments where ideas feed off each other and
grow into entities that were sometimes unconnected with what they set out to accomplish.

Ambitious people benefit from being in a city, just as companies. Some people move to cities not
just because they just need to make a living (although metropolises do provide higher salaries)
but also because they want to be at the centre of action.

These are the same people who are willing to spend small fortunes on homes in areas like
Manhattan (New York), Beverly Hills (Los Angeles), Nariman Point (Mumbai), and Banjara
Hills (Hyderabad).

Environment and the benevolence of a city


Dense cities are not just giant hubs of production and consumption. They are environmentally
benevolent entities. Per capita, the environmental impact in a city is far lesser than one would
expect in a less dense habitation. The densest habitation on Earth is Manhattan, New York.
Many services such as roads, transport (almost overwhelmingly public), water, and sanitary
services attain huge economies of scale, because of which, per capita emissions tend to be much
lower.

Living in their tiny apartments, with little room for clutter, using public transport, walking to
most places, New Yorkers in general, and Manhattanites in particular, are the best examples of
environmental activists – those who put their money where their mouth is.

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And each person in Manhattan has not been offered one penny of subsidy by the Federal
Government. They come for a rich personal experience, but they also end up making the
environment richer.

It is a spiky world
The evocative term – “a spiky world” (briefly alluded to by Professor Altschuler earlier, in the
introduction) was studied by Richard Florida. He makes the point that rapid industrialization,
far from emasculating the power of cities, has actually strengthened their influence. Raw
materials can be shipped from far more remote corners of the globe, and processing can be
quickened much easier than, probably, in a rural town.

The world isn’t flat (though Thomas Friedman would have one believe otherwise). If it were, the
cities would be flattened into homogeneous height and weight across the globe.

The world is spiky. And the cities are those spikes, representing humungous economic output
coming from the cities making for a major portion of the GDP of any country.

As far as India is concerned, the population and GDP contribution projections are as follows:

Total Population
Urban Population
1600 1470

1200
1040
856
800
590

400 290
220

0
1991 2001 2030

India's population Growth 1

13
100

31
46 42
75 54

50

69
54 58
25 46

0
rural
1990 2000 2008 2030
urban

India's GDP Contribution 1

Again, taking the example of the US, many small cities in the Bay Area (Mountain View, etc)
have the highest standards of living in the World. They largely specialize in niches of technology.
New York is still the centre for financial activity. The Boston area is the hub of medical
innovation. At one point, Detroit was the car-manufacturer for a large part of the World.

These roles were not thrust upon these cities. They grew naturally into a network of cities which,
in its interconnections, made up a large part of the American Economy.

In his last active years, the late Prof CK Prahlad was most interested in a vision of urban India.
Instead of visualizing India at 60(when asked in 2007 on commemoration of 60 years of
independence), he provocatively decided to visualize the future, not at 60 years, but at 75 years
of independence.

He visualized India as a country with seventy five different urban centres, all thriving and
thrusting forward the domestic, as well the international economy.

We agree with the good Professor’s direction. But one would like to even go further to support
the proper development of other hundreds of upcoming small and medium towns.

The processes of urban development in India are thus, to be analyzed in the backdrop of the
importance that cities have for promoting development and economic growth as discussed in the
preceding paragraphs. In view of the fact that JNNURM is the nation’s flagship programme
currently under implementation to deal with the urbanization processes, a detailed comment is
being made regarding the progress made under the programme so far. It has to be said that the
JNNURM has been effective in renewing focus on the urban sector across the country and has
helped create a facilitative environment for critical reforms in the urban sector in many states.
The programme has allowed investments to flow for basic services in cities, including for the
urban poor. The JNNURM has been successful in raising the aspirations of the ULBs and enable
them to execute projects at a much higher scale than was being done prior to the coming of this
programme.

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The JNNURM has made the States aware of the range of issues to be addressed in the urban
sector and provided a comprehensive framework for improving urban governance. It has
expanded the concept of city development beyond roads, flyovers, and traffic management to
concerns that deal with sanitation, water, and public transportation.

The midterm review of the 11th Five Year Plan undertaken by the Planning Commission indicates
that, in the four years since the JNNURM has been launched, some states and cities have
progressed further than others towards tangible results. The review notes that the need to
manage the process of urbanization and improve the condition of towns and cities is now on the
agenda of all states. The Planning Commission review, however, indicates that as we move
further, there is need for further and consistent implementation of reforms and need for
enhanced capacity at centre, state, and ULBs to ensure effective implementation of the
programme activities on the ground. On these fronts, State Governments and Urban Local
bodies need more support and better guidance to build the financial, social, and governance
capacity needed to sustain the new momentum on creating inclusive and livable cities.

Basing on the Planning Commission’s midterm review of the 11th Five Year Plan, and our own
assessment of the situation, the following areas are of concern that are required to be addressed
in the strategy to be followed in the future:

 There is substantial need to raise the capacity and investment resources. Much of the
investment has been directed towards the provision of critical basic services such as
projects relating to water supply, sewerage, and solid waste management. The urban
transportation, on the other hand, has received only 10% of the overall allocations.
Projects relating to enhanced urban transport interventions such as BRT corridors, etc
can involve land acquisition, etc and hence, more would be required to be done in this
area for higher impact.

 The take up of programme funds has been slow in the early part of the mission period.
This, however, can be understood since states and cities did not have plans and project
priorities in place.

 Many states are still lagging behind in programme utilization due to lack of enabling
capacity and funds. Few states have claimed less than 30% of the funds allocated to them
including Goa, Delhi, Chandigarh, etc.

 The unwillingness to adopt reform explains low absorption for some of the States.
However, in many other states, lack of sufficient capacity at State and ULB level to
develop plans, identify project priorities, raising matching funds and executing projects
is the constraint.

 Government bodies in States and cities do not have professionals to manage urban
projects. It will be worthwhile to create and develop a cadre of specialists in this area.
The departments and ministries at the Centre/State Level will also be required to
strengthen their organizations and capabilities.

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 The mission needs to do more to make the States and Cities obtain financial
sustainability by tapping other sources of funds such as user charges, monetization of
urban land, and property taxes.

 JNNURM, though a large programme, is only the beginning of a process of urban


management. It still does not cover all the cities and towns of the country. The
requirement of resources for infrastructure in Indian towns is going to be staggering in
the face of competing demands in the country for education, healthcare, rural
infrastructure, and other areas. The needs of urban development must be met, however,
because they are vitally important for the goals of economic development and inclusive
growth in the country, especially as said earlier that over half of the country’s population
will be living in towns and cities within the next 25 years.

 Innovative solutions to attract private money, etc, will have to be found out.

Who are our stakeholders?


There are five broad categories of stakeholders

a. National level stakeholders: Union Ministries of Finance, Planning Commission, and


Central Ministries dealing with physical and social infrastructure, having a bearing on
urban development such as Ministry of Power, Ministry of Non Conventional Energy
Resources, Ministry of Housing and Urban Poverty Alleviation, Ministry of
Environment and Forests, and the Centres of Excellence established by MoUD.

b. State Level Stakeholders: State Governments in General, and departments like Town
Planning, Housing, Urban Development, Public Health Engineering, Health,
Education, Transport, and Municipal Administration

c. Community and Group level Stakeholders: Local Self Government bodies, NGOs,
community based organizations, and citizens who are users of the infrastructure.

d. Parastatal Agencies: State Urban Development Authorities, Solid Waste Management


Utilities, Water Supply Boards, Slum and Housing Boards, and others.

e. Others: The citizens are the other main stakeholders, as they want good governance,
adequate infrastructure, and good quality city life.

What are our strengths and weaknesses?


With reference to the Ministry of Urban Development, while the strengths and weaknesses are
critical parameters in the vocabulary of our discourse, we need to understand that their context
is just as important. Keeping this in mind, we conduct a SWOT analysis – a delineation of our
strengths, weaknesses, opportunities, and threats

Before proceeding on a SWOT analysis, we first pause to delineate what we mean by each of the
terms Strength, Weakness, Opportunity and Threat.

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Strength: Internal Advantage. For example, faster computing power is an advantage for a chess
player in a match, all other factors being equal.

Weakness: Internal Disadvantage. For example, in the context of a mid-sized human being,
size is clearly a disadvantage in a sumo wrestling competition.

Opportunity: A property of the Environment that is favorable. For example, the current World
Economic Situation is deemed by many to be an opportunity for the Developing Countries.

Threat: A property of the Environment that is unfavorable. For example, the preponderance of
wild animals in the Amazon is a threat to an exploring party.

With these definitions in mind, we seek to conduct such a SWOT Analysis on the Urban
Governance space in India:

Strengths Weaknesses
1. The MoUD’s capacity to play a lead role 1. Crumbling, expired infrastructure
in Urban Development. 2. Poor planning decisions
2. Existence of policies like Urban 3. Dangerous state of agricultural
Transport Policy 2006, Urban production – forcing migration
Sanitation Policy – 2009. 4. Poorly aligned scheme of governance
3. India’s rising Economic status incentives
4. A strong pool of professionals, many of
them who have relocated from abroad
5. Support of technical organizations, as
also of multilateral and bilateral
organizations.
6. A concerned urban workforce, willing
to pitch in to improve the state of their
cities.

Opportunities Threats
1. Greater acceptance in the World 1. The sheer number of urban citizens,
2. A chance to leapfrog over old systems and much more to come
and come up with an indigenous and 2. Rising urban consumerism may
technologically advanced solution threaten to swamp transportation
3. A chance to build Greenfield cities (more cars), health care(less healthy
suited and customized to the need of food, more substance abuse), and
the rising Indian Urban Professional schooling (threat of greater inequality).
4. A great interest by External Players to 3. The alignment of Urban Governance as
be a part of India’s Urban Governance a State subject makes it more difficult
Story. to craft a uniform policy
4. Requirements of funds is huge
5. Huge backlog in the provision of Urban
Services

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What do we need to learn?
While a top-down approach to standardizing services and taking stock of disappointments is
well appreciated, it is necessary to take all immediate stakeholders (particularly the citizens) in
framing a bottom-up model as well. Local governance is the most immediate link a citizen sees
between his/her vote and outputs. This link must be firmly established.

Unless the principle of Subsidiarity is applied, and authority at each level matches the
responsibility, we will be hard pressed to generate credibility in the local government system.

Our democratic institution need very precise study and nurturing, patience, and carefully
calibrated design. Benefits should be maximized in a way that ensures a self-correction feedback
loop.

Transfer of power is bound to be politically painful. It is unlikely that many State Governments
will easily surrender what they see as their hard earned federal powers. Any reform must take
into account this inbuilt resistance. The states can be nudged towards discovering a new and
vital role, where they perceive themselves as in a symbiotic relationship with the local
governments. Some constitutional experts have argued that the Union Government has
discovered just such a role vis-à-vis State Governments in the last two decades.

Third, local government empowerment must take into account accountability and continuity.
There cannot be a single uprooting of all institutional arrangements in the hope of replacing
them with a new dispensation.

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Section 3: Outline of the Strategy
What are potential strategies?
A dramatic step up for the construction of urban infrastructure is needed in India; otherwise we
will not be able to bridge the gap between the demand for services and their provision. Various
measures are required to ensure that cities offer a certain quality of life and become an attractive
proposition for companies to make investments on the back of strong economic growth that
India is experiencing. The performance of the quality-of-life indicators such as the water supply
quantity per-capita-per-day, share of public transportation, parks and open spaces per-capita,
sewage treated as a percentage of sewage generated, solid waste collected as a percentage of total
waste generated, all need to go up. The percentage of slum population to the total population in
cities needs to be drastically brought down. The quality of urban services needs to improve
sharply in the coming decades.

As the creation of urban infrastructure requires a large amount of finance, the strategy for the
finance sector is being discussed first.

Strategy for Urban Finance


Urban Finance has long been a neglected orphan child in Indian Governance.

When Sardar Vallabhbhai Patel became the Mayor of Ahmedabad under the Government of
India Act, 1919, he had this to say about power without financial liquidity

“(It is) ...like dressing up a dead body”.

If that indeed was the case, then Indian cities have been host to many funeral parlors over the
last century. Notwithstanding the unprecedented thrust given by JNNURM, the record on urban
finance has been largely dismal.

The McKinsey Global Institute, which has published a report – India’s urban awakening:
Building inclusive cities, sustaining economic growth, April 2010, estimates that Indian cities
need capital expenditure of $1.2 trillion over the next twenty years, which is equivalent to $134
per capita per annum. The bulk of this demand will be soaked up in large Tier 1 and Tier 2 cities
which will require per capita investment exceeding $200.

This spending includes expenditure on water, sewage, solid waste, storm-water drains, urban
roads, mass transit, affordable housing, and establishment.

Even after 74th amendment to the constitution of India, it is regrettable to count the helplessness
of municipal authorities in raising finance.

The first hurdle is the High establishment expenditure in most Indian cities’ Local Bodies– often
going until 80% of the total cost. Very little is left for capital expenditure. In developed

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countries, governments have created transparent, formula-based mechanisms (rather than ad-
hoc mechanisms) to fund their cities. In South Africa, UK, China, and other countries – more
than 50% (sometimes close to 70%) of funding is provided directly by the Central Government

Countries like China have, in fact, allowed Cities to claim 25% of value added tax. It is no
wonder that the mayor of Shanghai is seen as the third most powerful man in China (after Hu
Jintao and Wen Jiabao). Many big projects have also been converted into Special Purpose
vehicles (SPVs) to offset risk management perceptions.

Some major Indian issues


With the abolition of Octroi by most States, Property Tax is the most important source of
revenue for local governments. Government of India formulated and circulated the Guidelines
for Property Tax Reforms, in 1998. As a result, a large number of municipal bodies have
switched over from the traditional Annual Rental Value (ARV) based assessment to the ‘Unit
area’ or the ‘Capital value’ methods

Fiscal Decentralization: The last two awards by the Central Finance Commissions (Twelfth and
Thirteenth) are explicitly focussed, with strong empathy, on the status of fund transfer to local
bodies. The Twelfth Finance Commission (TFC) has recommended grants amounting to Rs.25,
000 crores payable during the period 2005-10(Rs.20, 000 crores for Panchayats and Rs.5000
crores for Municipalities) to States for Rural and Urban Local Bodies. The Thirteenth Finance
Commission has gone further and has recommended (a total net) allocation of Rs 87,000 crores
to the local bodies. It has also recommended that a portion of the royalties’ income should be
shared by the local bodies. The Thirteenth Finance Commission has also made suggestions
on the State Finance Commissions (SFCs).

Firstly, it recommends an amendment in Article 280 (3)(bb) and (c) of the Constitution so that
the words “on the basis of the recommendations of the Finance Commission of the State” are
changed to “after taking into account the recommendations of the Finance Commission of the
State”. In addition, it suggests that SFCs adopt a common template as the basis for their reports.
It also recommends that the recommendations of the SFC be implemented promptly by the
states, and Action Taken Report (ATR) be tabled promptly before the legislatures.

We are of the considered view that these recommendations lay the ground for a strong re-
assessment of the awards of the State Finance Commissions. These are constitutional bodies
whose potential for realizing financial decentralization of Urban Local Bodies is very high
importance.

We endorse the directions of the Twelfth and Thirteenth Finance Commission with regard to
Fiscal Decentralization and appropriate award making by SFCs. We urge that the Central
Government and the Ministry of Urban Development in particular, strongly intervene to ensure
implementation of these proposals at the earliest. This would ensure that a sizable component of
the municipal finance is assuredly received by ULBs on a regular and timely basis.

20
Service Tax: While there has been no movement in the direction of allocating a fixed portion of
service tax to Local Bodies, there has been definite movement (since the 88thamendment) to see
service tax as a definite shareable tax. The share of States in the shareable Central taxes has also
been increased to 32%, which is higher than the 30.5% in the period 2005-2010. Urban Local
Bodies must also benefit from this admirably federal trend.

A Grand Bargain (GB) has been proposed by the Thirteenth Finance Commission to allow States
to converge on a range of contentious issues, and move along with the Centre in proposing a
Common Goods and Service Tax (GST). This Grand Bargain has been fixed at 50,000 crores. We
believe Urban Local Bodies are logical stakeholders in this debate. Their opinion should and can
be taken on board, and it would be fair to expect a portion of the Grand Bargain to accrue to
them.

Municipal bonds: Except for a handful of cities in India, there has not been much resorting to
the municipal bond as an instrument of Urban Finance. Tax exempt municipal bonds can be
utilized as an additional source of urban finances. In addition, the public debt can force
corporations to tighten spending and provide for a new set of accountability norms that, in the
right environment, can be a powerful motivator.

We propose that Urban Local Bodies be actively encourage to issue municipal bonds. However,
we recommend that this is not made applicable to small municipalities as a revenue raising
instrument. They still need to build capacities to deal with such type of instruments. We propose
that Municipal Bodies be allowed for municipalities with populations greater than 10 lakhs for
initial few years from now onwards.

Widening the Tax Base: It is estimated that only about 60%-70% of the properties in urban
areas are actually assessed. The percentage is even lower for many other big cities. There are
several reasons for low coverage. The boundaries of municipal bodies are not expanded to keep
pace with the urban sprawl; as a result, a large number of properties fall outside the legal
jurisdiction of the municipal bodies. A large number of properties belonging to the Union and
State Governments are not taxed because of the provisions of Article 285, and Article 289. Local
Governments provide services to the occupants of such properties and there are costs attached
in providing these services like solid waste management, maintenance of approach roads and
general civic amenities.

Rationalizing the Appeals Process: Assessment of the tax chargeable on a property is the first
step in property tax administration. Earlier, the assessing officer had a substantial amount of
discretion and consequently there were large number of complaints against such officers and, in
a number of cases, the assessees would file an Appeal

Improving Collection Efficiency: It has been experienced that the collection efficiency of
municipal taxes is in the range of 40 to 46% (NIUA, 1993). A more recent study shows wider

21
variation. Poor data base management, improper upkeep of records, collusion between tax
payers and recovery officers and lack of understanding of the tax regime are the main reasons
for low recovery rates.

Making Property Tax Buoyant: One of the major drawbacks of property tax based on Annual
Rental Value (ARV) was that it was non-buoyant. The tax fixed for a property would remain
unchanged till such time an overall revision in the property tax was undertaken in the municipal
areas.

Octroi was the main source of revenue for the municipal bodies in the past. It has been
abolished in most States because of the obsolete method of levy and collection.

User Charges: The most important sources of non-tax revenues should in fact, be the user
charges, the payments a citizen has to make for the public services he/she uses. These would
include water charges, sanitation and sewerage charges, waste collection charges, charges for
street

Lighting, fees for parking, fees for use of congested roads by motorists, fees for use of local
services etc. These have not yet been fully utilized, in our experience.

There is reluctance on the part of the elected local governments to charge fair rates for fear of
becoming unpopular. As a result, the resources available for maintaining and running these
services get limited

And consequently the quality of service declines. This leads to a vicious circle where the
consumers also resist any increase in the service charges.

Borrowings: Urban infrastructure traditionally has been planned and implemented by State
Governments, municipal governments or Parastatals, through use of their own revenue
surpluses or grants from the Union/State Government. Municipal bodies and Parastatals have
also been raising loans from financial institutions to fund their capital expenditure. Most of
these loans are guaranteed by the State Governments. A major disadvantage of this type of
funding (with government guarantee) is that it dilutes the responsibility of the borrowers and
they are not very serious about recovery through levy of appropriate charges on the beneficiaries
of such projects. Thus, it brings a sense of financial indiscipline to some extent.

Leveraging land as a resource: Municipal bodies often have a wide range of assets on their
balance sheets ranging from infrastructure net works to public buildings, from housing to
municipal shopping centers as well as land. In view of the proposal that development authorities
should be merged with concerned ULBs and their technical/planning manpower subsumed with
the DPCs and MPCs; the substantial land holdings of the development authorities should also

22
eventually come under municipal 0wnership. With spiraling prices of land in cities, it is
extremely necessary that these assets are managed properly. For example, Mumbai city plans to
spend around 100,000 crores by leveraging land sales in the Bandra Kurla Area and through
PPPs.

In these contexts, we propose the following goals for adoption.

Proposals for augmenting availability of urban finances


1. State Governments should ensure that methods of assessment of property tax are made
appropriately objective, and exemptions treated with very severely

2. Tax details can be placed in the public domain

3. Union and State governments can open up their properties for local government taxation

4. Extensive mapping of all Government property can be carried out using the latest GPRS
tools

5. Octroi can be abolished, taking appropriate number of stakeholders on board

6. Professional and other taxes can be actively utilized to boost urban finances

7. There should be performance-related grant release to many municipalities

8. Congestion charges can be levied to allow for demand redressal(in contrast to the
singularly focused approach on supply redressal – by focusing on flyovers, metro rails,
buses, etc)

9. The limits of borrowing may be fixed, and local governments encouraged to raise
finances within this ambit; in this context, an explicit environment promoting municipal
bonds may be considered

10. Monetization of lands has to be actively considered

11. We endorse the directions of the Twelfth and Thirteenth Finance Commission with
regard to Fiscal Decentralization and appropriate award making by SFCs. We urge that
the Central Government and the Ministry of Urban Development in particular, strongly
intervene to ensure implementation of these proposals at the earliest. This would ensure
that a sizable component of the municipal finance is assuredly received by ULBs on a
regular and timely basis

12. Urban Local Bodies are logical stakeholders in the debate on the Grand Bargain
regarding the Goods and Service Tax (GST). Their opinion should and can be taken on
board, and it would be fair to expect a portion of the Grand Bargain to accrue to them.
(A set of common proposals for change management across different sectors are provided at the end of
this section)

23
Strategy for Infrastructure
India’s urban infrastructure has been the subject of a long and tenuous debate in recent years.
Political leaders at extremely high levels of influence (like P.Chidambaram and Sheila Dixit)
have expressed fears about the capacity of city-based infrastructures to accommodate the
burgeoning population levels fuelled by large scale migration. Before coming to the proposals,
the main issues surrounding the provisioning of urban infrastructure are analyzed and then the
recommendations provided at the end as discussed below.

Current major issues relating to Infrastructure


Regulatory services: The Second Administrative Reforms Commission has a fine chapter which
deals with the preponderance of regulatory services and their state of glacial progress forward.

In this regard, the ARC has proposed the following pillars regarding Regulation in Urban
Bodies:

1. Simplification

2. Transparency

3. Objectivity

4. Convergence

5. Speedy Disposal

We are very happy to note that Government of India has launched the National Mission Mode
Project for e-Governance in Municipalities (NMMP), with an outlay of Rs.787 crores which, over
five years, will cover 423 Class I cities.

Infrastructure services: Urban infrastructure generally covers what may be described as


‘amenities’, such as (a) drinking water, (b) sanitation and sewerage, (c) solid waste management
and (d) urban transport management.

Infrastructural framework:
Provision of basic amenities in cities is characterized by a multiplicity of agencies. Since
Municipal Administration is a State subject under the Constitution, State governments control
the regulatory and financial policies of ULBs. Functions in the Twelfth Schedule which have not
yet devolved to local governments, are under the State Government through departments and
quasi government organizations.

In this context, allocation of responsibility and accountability between the urban local bodies
and the State Government departments/Parastatals has to be clearly demarcated. To an extent,
the larger State Government agency may have a final responsibility and ownership, at least of
those services and utilities which have a presence beyond the ULB jurisdiction.

In other words, all ‘downstream activities’ of a particular utility, within the jurisdiction of a ULB
should ideally become the activity of the ULB.

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Water supply:
According to the 2001 Census, out of 53.69 million urban households only 36.86 million had tap
water sources. A very large percentage of the urban poor have no access to safe water. The
Government programme of accelerated urban water supply scheme, as on 31.3.2006, has
supported 612 schemes for Rs 695 crores. This is absolutely inadequate when compared to the
assessment made by the Central Public Health Engineering (CPHEEO) of Rs 1, 72,905 crores for
100 per cent coverage of the urban population under safe water supply and sanitation services
by 2021.

Three broad institutional frameworks are discernible in ULBs in India with regard to water
supply and sewerage services. First are the ULBs where the entire system is with a department
or a Parastatals of the State Government; second, where the ULBs themselves handle the entire
activity and, third, as in some large cities, where exclusive water supply and sewerage boards
have been set up for the city

Management of water supply should be the primary function of a municipal body. An allied but
equally important issue is that of recovery of costs/tariff. There is understandable reluctance on
the part of local governments to pass on the actual costs to consumers – this, however, often
results in grossly uneconomical tariff structures.

Water supply schemes have to be environmentally sustainable. With a burgeoning urban


population, the traditional water sources are inadequate to meet the requirements. As a result,
new sources have to be developed, but this raises the cost of water. Local bodies need to prepare
infrastructure development plans which should be integrated with the City Development Plans.

Sewerage Management:
The reasons for the poor sanitation levels in our cities are many. These include a lack of
awareness and appreciation of the need for proper sanitation and hygiene as also the inadequate
public investment due to the dismal state of municipal finances. The problem of sewerage
management has two aspects. First, as large parts of cities are not covered by underground
sewerage disposal systems, the wastes find their way into storm water drains, natural water
courses and ultimately into major rivers. The problem gets aggravated in case of rivers near
major cities. Second, the sewage carried by the underground system has to be ultimately let off
in the natural drains, but after proper treatment.

Sewerage systems along with treatment facilities are capital intensive. While granting approvals
to new lay-outs, it should be ensured that adequate provisions for internal sewerage systems are
made and enforced. Normally little or no charge is levied by the local bodies for sewerage
facility.

This approach requires an immediate change.

Solid Waste Management:


Urban sanitation is closely linked to solid waste management. The waste generated in urban
India in 2000 was estimated to be over 33 million tonnes and is expected to nearly double by
2010 and double again by 2020. Waste collection and disposal is a statutory function of all
municipal bodies. Indeed more than half of the staff employed by municipal bodies is engaged in

25
this task. This big complement of staff performs tasks like street cleaning, collection of garbage,
transportation and dumping of garbage. Besides, a substantial number of workers in the
informal sector (rag pickers) are also engaged in recycling of certain components of garbage.

However, in spite of deployment of such a large workforce for solid waste management, the
results are not satisfactory. In a typical city, the ‘public dust-bin’ approach is very common for
garbage disposal

The management of waste has three basic components: (a) collection (b) segregation for
different types of disposal and (c) disposal. The first lends itself to community participation and
also privatization and must be made a part of the activities of Area Sabhas and local
NGOs/CBOs who may charge for this. A large number of community based systems of garbage
collection have been tried in different cities. These need to be scaled up.

The second component requires segregation into categories for different types of disposal.
Unfortunately, our pattern of disposal is mainly one of indiscriminate dumping. It is essential to
initiate a civic programme especially in the larger cities to segregate household waste according
to its degradability. This would ease the burden on civic authorities. The third component is that
of efficient disposal, which can also be carried out either by the local bodies themselves or with
private sector participation

Commercial Exploitation of Waste: An important aspect of this civic service is the scope of
commercial exploitation of garbage. This can come out of energy generation, compost heaping
or other innovative uses. The conversion of waste into energy for local consumption could
provide for a part of the finances of the city.

Satellite and New towns


The opening of the Delhi-Mumbai Industrial Corridor augurs well for planned urban and
infrastructural development in India. In particular, we hope to see the emergence of new and
satellite towns as part of this initiative.

The government agencies should however provide support for bulk services and connectivity. If
these towns have state of art urban services, they can be very sophisticated habitats and can
serve as magnets for promoting growth in and around these areas. The urban planning must
provide for residential and commercial exploitation of the land. While we are quite sure that
cities will be eventual powerhouses of GDP turnover, we agree that satellite towns are an
excellent opportunity to lessen the pressure on critical infrastructure in megapolises. The
experiment in India with satellite towns, whenever applied, has largely been a success. Ranchi,
Durgapur, BHEL townships, and many more urban environments can provide the blueprint
towards a sustained initiative towards satellite towns.

Education:
India has one of the largest education systems in the world. Still, a very significant number of
children either remain out of school or drop out without completing even primary education.
Between 1950–51 and 2004–05, the number of primary schools more than trebled from 209,671
to 767,520 respectively, of which 90.2 per cent were managed by government or local bodies

26
Irrespective of whether schools for the common people are run by the government or the local
bodies, the biggest challenge is to impart quality education. According to studies, a large
percentage of urban poor school going children can barely read.

Stakeholders’ empowerment is equally important to ensure quality education in public funded


schools and to secure development entitlements for those who are vulnerable, poor and
voiceless. The real challenge is to craft delivery systems that can address diversity of needs and
give a voice to the poorest of the poor.

Public Health
India’s achievements in the health sector in the post-Independence era have been in some
respects creditworthy. Longevity has doubled from 32 years in 1947 to 66 years in 2004; Infant
Mortality Rate (IMR) has fallen to 58. However, there is much yet to be done.

A study by the NGO, Pratham, into the status of education among urban poor children of
Northern and Western India, found that the percentage of children in urban government
schools who can barely read the alphabet is about 40% except in Mumbai-Pune.

According to the India Infrastructure Report, 2006, data on urban health infrastructure is not
collected by the Ministry of Health and Family Welfare. In urban areas, public hospitals,
dispensaries and clinics are generally more focused on curative aspects of medicine, rather than
primary health care and dissemination of information.

A fundamental shortcoming in the present arrangements for public health management in


urban areas is lack of primary health care. The urban poor are even worse off than their rural
counterparts because of the grossly inadequate primary health care arrangements. Municipal
dispensaries, restricted as they are in numbers, do not extend facilities to urban poor which the
PHCs do in the rural areas.

Public health is dependent on primary health care systems, nutrition, safe drinking water, and
sanitation and health education. Therefore, convergence of these services is as important as up
gradation of primary health care. These are areas of serious concern like levels of malnutrition
and rates of infant and maternal deaths are worse than the neighboring countries. Investment in
the health sector is much less than what is needed. This needs to be addressed.

Proposals for augmentation of the provisioning of various types of urban


infrastructure.
1. The principle of Subsidiarity should be followed in allowing the local government to
exercise its responsibility to the maximum extent

2. Parastatals units should to become accountable to the ULB.

3. Water supply should be phased into the responsibilities of Urban Local Bodies

4. Sewage facilities to be treated in a time –bound manner, preferably by strengthening


Urban Local Bodies.

27
5. A separate user charge to be introduced in all municipalities, even as a minimum levy,
for sanitation and sewerage, as distinct from water charges

6. Municipal bye-laws/rules should provide for segregation of waste into definite categories
based on its manner of final disposal.

7. Municipal building bye-laws should incorporate power conservation measures

8. There has to be a shift in emphasis in the crucial service delivery sectors of education and
health from centralized control to decentralized action

9. It is necessary that all schools are made directly accountable to local bodies.

10. The municipalities, especially the larger ones, should seek the help of NGOs, the
corporate sector and individual volunteers for assistance in running schools

11. Institution specific standards should be prescribed for schools and hospitals and third
party assessments carried out to monitor performance in service delivery

12. For all services provided by local governments there is need to develop a set of
performance indicators.

13. Public Private Sector Participation projects should be thought of wherever efficiency
gains can be foreseen in the provisioning of urban services and the private player is ready
to assume certain risks on the investment being made by him.

14. We recommend policy measure for setting up of many small towns in the country under
a centrally designed scheme. These towns cold have a population of even up to 2 lakhs.
Private sector should be roped in as well

(A set of common proposals for change management across different sectors are provided at the end of this
section)

Strategy for Transport


Urban transport is a key component of urban infrastructure. It is also a visible manifestation of
the efficiency of urban governance in a city. As the urban share of the GDP in India grows, GDP
growth will be closely linked to how efficiently transport systems in urban areas are able to move
goods and people. Travel demand depends on a number of factors - population growth and
economic development being the major determinants. The usual response is to augment buses if
possible. However, the expansion of road space has not taken place at the same pace, primarily
because it is not easy to construct new roads or widen the existing roads in built up spaces.

Also, the growth in the number of vehicles has been skewed – with personalized vehicles
increasing at a much faster rate than public transport vehicles. This has led to traffic congestion
in all major cities in India, and the trend is likely to be seen in all the emerging towns.

28
Transport Structure in the Indian cities
Some cities like Mumbai and Bengaluru have exclusive organizations for providing city bus
services. In some cities, these services are directly run by the State’s road transport corporation.
Only a few cities in Maharashtra and Gujarat have bus services run by the municipalities
themselves. The State owned transport corporations have generally been running on deficits and
have been unable to fund expansion in capacities to the desired level. The resource crunch has
also prevented them from improving their quality of services. A large number of factors have
been responsible for the rather unsatisfactory performance of the State owned public transport
corporations – ad hoc fare policy, indiscipline amongst staff, managerial and operational
inefficiencies, unscientific route planning, unsound personnel policies and political interference
are some of them. No well structured effort to involve the private sector in the provisioning of
bus services is visible and small scale private operators continue to provide the bulk of the
services in an undisciplined and unsafe environment in many cities.

The infrastructural problems of this sector are compounded by the fact that responsibility for
this sector in India, both at the State and Union levels is so diffused that no one can be held
responsible for the failings. At the Union Government level, till 1996, there was no recognition
of urban transport as a separate subject; it was not mentioned in the Government’s Allocation of
Business Rules and therefore went by default as a peripheral function for the ministries
responsible for rail and road transport. Confusion and neglect as regards this sector are further
confounded at the State and local levels. While the State Transport Department is responsible
for urban transport planning in some States, in others it is entrusted to the Urban Development
Department or department dealing with local Self governments or municipal administration.
And at the operational level, while the Transport department is responsible for vehicle licensing
and tax collection, traffic control is with the police and road construction and maintenance with
the State PWD or with the Municipality.

Management of Transportation Demand: In the past, the approach to solving the problem of
congestion was to widen roads, build new roads, and construct flyovers etc – basically focussed
on supply side management. Important as these measures are, unless they are complemented by
demand management measures, congestion on roads would continue to grow. The use of
personal vehicles needs to be discouraged by a judicious mix of fiscal and non fiscal measures.
Singapore imposes an additional levy both on ownership of vehicles as well as use of vehicles.

Spatial planning is a major tool to contain travel demand. Interspersing small work areas and
residential zones throughout the city rather than having work areas in one big zone far removed
from the residential areas, planning high capacity transport corridors and permitting increased
FSI along them and providing enough space for transport infrastructure can facilitate reducing
travel demand.

Developing a Multi Modal Integrated Transport System for Cities: A public transport system,
viewed in its totality, comprises all modes of transport other than personalized vehicles. The
main public transport modes are metro rail, elevated light rail, high capacity buses on dedicated
corridors, mono rail, ordinary buses, mini- buses and other Para transit modes such as taxies
and auto rickshaws. No city can rely on a single mode of transport. Each mode has its
advantages and limitations, and an ideal system would be a mix of multiple modes

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Public – Private Partnership in Public Transport: Involving the private sector in public
transport helps in bringing in capital as well as managerial efficiencies. Various models of
public-private partnership are possible. These are ‘tendering of routes’, wet lease of buses and
outsourcing of specific services.

Summary of proposed goals


1. Unified Metropolitan Transport Authorities need to be set up to deal with Transport-
related issues

2. They should be given statutory powers of regulation. While this is a big change, such a
shift can be calibrated by taking all stakeholders on board and allowing them to
formulate a measured response balancing all their concerns.

3. Demand for transportation in cities should be managed by adopting demand control


measures like i. Imposition of congestion levies; ii. Pedestrianisation of certain zones;
and iii. Reserving access to certain areas only through public transport

4. Revitalization of public transport services in cities should be taken up as priority projects


under JNNURM and by tapping other sources of revenue

5. Public transport systems should be multi-modal, based on economic viability. BRT


systems need substantial augmentation and implementation in all the large cities of
India as there is no other alternative to organized and comfortable public transport if the
congestion is to be reduced as presently being experienced in the growing towns. On the
same footing, MRT has to be stepped up in the biggest towns of the country.

It has been well documented that the Delhi Metro has significantly reduced congestion,
as well as emissions in the city. Across domains, experts have agreed on its efficacy as an
efficient Mass Transit system. Other MRTs would do well to replicate this efficiency and
success.

Strategy for Town and City Planning


India’s urban planning has been recognized to have been in a poor shape. There are indeed
plans which have been ratified at the appropriate (often, highest) political authority. But it has
become something of a cliché to see them as largely irrelevant to the shaping of a city. The
McKinsey Global Institute suggests a “cascaded” planning structure in which large cities have
40-year and 20-year plans at the metropolitan level that are binding on municipal development
plans.

Some major issues in City and Town Planning


The key concern when it comes to the urbanization process in India is the fact that in the fastest
growing cities in the country, urbanization has taken the form of ugly urban sprawls, comprising
slums and unauthorized colonies, which provide entry level housing to migrants from the rural
areas who come to the cities in search of jobs and cannot afford to live in the planned layouts
and authorized colonies

30
The manner in which space is organized and used in a city is a physical expression of its
economy, environment and equity. The better the planning of urban space, the greater is the
ease of administration and governance

The Town and Country Planning Act(s)


The system of creating Comprehensive Development Plans (Master Plans) post Independence in
India is derived from the Town and Country Planning Act, 1947, of the UK. That legislation was
followed by administrative instructions in 1955 on the creation of green belts, and updated by an
Act of 1990. The model Town and Country Planning law of 1960, repaired by the Town and
Country Planning Organization (TCPO) under the Ministry of Urban Development, led to
various State level Acts, which formed the basis for a certain momentum in urban planning
during the early 1960’s.

‘Town Planning’ in the real sense is planning for the future development of a city including
optimum utilization of the available resources to provide the required civic amenities to the
citizens. Thus town planning is a holistic concept. But in most cities, even today, town planning
ends with preparation of zoning regulations. There is need to establish town planning as an
important tool for future development of the cities.

The spatial planning should take care of the natural geographical and geological parameters. For
example, spatial planning should take into account the natural drainage system of region, as any
obstruction with it may lead to a major catastrophe in the event of a flood. Mere drawing up of
good spatial plans is not sufficient. The enforcement of these plans – in whatever form they exist
– leaves much to be desired. The zoning regulations are many a time not sacrosanct – with
authorities giving permission to change the land use or relax the regulations. More often than
not, such ‘conversions’ are not based on merit. Violations of the zoning regulations are common
in our cities

Proposals for strengthening Planning mechanisms


1. The City Development Plan (CDP) and zoning regulations once approved should remain
in force for a fixed number of years

2. Infrastructure plans should be made an integral part of the City Development Plan
(CDP)

3. The existing system of enforcement of building regulations needs to be revised. It should


be professionalized by licensing architects and structural engineers for assessment of
structures and for certification of safe buildings

4. BRT systems should be factored in while outlining the network of roads in the city plans
of big cities.

5. We need to create more expertise in urban planning within our cities so that they move
from sporadic and ad hoc growth to a planned and facilitated usage of land and space.

31
Common Strategies for all Sectors in Urban Management

 Good “change management” would require dissemination of best practices. There has been
insufficient attention so far in this regard. A city needs a vision to guide its planners and
stakeholders in the journey to change. The vision must emerge from deliberations amongst
the stakeholders, though it may be proposed by experts.

 To transform local capacities, specialist teams facilitated funded under JNNURM should be
built by the centre to work with the States and Cities in all the sectors of urban development
that necessarily include capacity building in dealing with various aspects of water supply,
distribution, solid waste management, sanitation, preparation of urban plans, and urban
finances.

 Midterm review of the Eleventh Five Year Plan reveals that JNNURM allocated 5% of funds
towards capacity building, which have largely remained underutilized. If expert teams are
created, states will be able to benefit from easy access to technical and sectoral experts who
can work with State and Local bodies on the ground to revamp structures, open up
possibilities for projects, and create environment for reform. We support the
recommendation that such teams be formed with help from many of the existing urban
institutes, as well the private sector expertise.

 We strongly recommend a vigorous follow up of the initiative taken by the Ministry of Urban
Development for launching “Centres of Excellence” in association with various institutions
across the country so as to create regional knowledge centres that the local bodies can tap.
This proposal needs to be implemented on top priority and necessary investment support
should be provided for the same. We recommend a joint collaboration between the Urban
Development Ministry, and the Housing and Poverty Alleviation Ministry to make the
Centres of Excellence very effective and highly useful Institutions.

 Given the low off take of the capacity funds that were available under the JNNURM, we
support the recommendation of the Planning Commission that States be considered to use
the money/ allocation to design enabling policies, as well as to create effective master plans
to bring the development vision and the statutory plans together. States could be allowed to
tap the external expertise to support the development of these policies. The option of
allowing the states to decide the utilization of funds below a certain amount, including for
hiring advisors and sectoral experts through an in-principle fast track approval principle
should also be seriously considered.

 On a medium term basis, we would support the proposal that MoUD scale up current peer
learning and sharing systems across the States. This effort should allow for identification
and adoption of the very practices that have guided urbanization around the world, not only
in India, and customized to our local needs and challenges. Such a system can be

32
professionally managed with expertise drawn from the two ministries dealing with Urban
Affairs, and the private sector with more investment and resource support.

 Similarly, we need to support the proposal for setting up three/four large scale urban
management institutes that can assist States and ULBs with expertise in urban topics
including in areas of financing, planning, and urban management. One or two of these
institutes should seek active involvement and investment on the private sector to ensure that
the best talent available in the country is attracted to steer the effort of building local
capabilities in every city and ULB.

 In order to increase the access to affordable houses, the efforts need to be scaled up through
the Rajeev Awas Yojana. The allocations under Rajeev Awas Yojana would require to be
increased for augmentation of the housing stock.

 It is time to identify the agenda for the next wave of reforms. The discussions undertaken by
the planning commission with various state governments and experts in the field suggest
the need to focus on the following measures:

i. More aggressive transfer of decision making from States to ULBs

ii. Right division of responsibilities between ULBs and metropolitan authorities in


large urban areas.

iii. Clear articulation of land monetization policy

iv. Enactment of Model Municipal Laws in every State to translate various guidelines
into specific rules that clearly transfer power and decision making.

v. Creation of an integrated urban mission with State Funding

vi. Creation of Urban Monetary Authority to benchmark the quality of services in


ULBs in each State.

vii. Continuation of the property tax and user charge related reforms including setting
up of property tax and boards which are critical to financial sustainability of ULBs.

viii. Ensuring greater leverage of funds through private participation and debt with the
help of active capacity and knowledge support from the Central Government.

ix. Creating a State Municipal Cadre to significantly improve local managerial


capabilities

x. An ombudsman-like system to look into the complaints of maladministration.

33
How will we build our knowledge and capabilities?
Our intention is to build knowledge and capability through a conscious deployment of human
capital. This, according to many current experts, is the crux of the difficulty in pushing urban
reform forward.

Some initiatives that can be pushed forward in this regard are:

1. Allowing for lateral entry at the higher levels of Local government

2. Making sure that a systematic training module is inculcated into each employee of a
Local Government. As the current rules for the Department of Personnel and Training,
vis-à-vis IAS officers suggests, a phased programme of training across career is very
welcome.

3. Funds for capacity building can be used more effectively. JNNURM earmarked 5% of the
programme funds for this option. Records indicate, however, that only 120 crores have
been spent out of 1575 crores earmarked for this programme – for the Ministry of Urban
Development. As far as the Ministry for Urban Housing and Poverty Alleviation is
concerned, the relevant figure is 95 crores out of 1160 crores (allotted). This is a trend
that requires changing. Many States have in fact indicated that they faced a difficulty in
accessing these capacity funds. They depend on external agencies to get these funds.

An easier process of claiming such funds is urgently required.

What are the priorities?

The priorities are spelt out in the implementation plan. Our basic line of approach has been to
approach those reforms that are politically much more feasible than the others.

We, while endorsing the Planning Commission midterm review observations, have the following
priorities spelt out:

1. It is increasingly felt that community participation articulates the aspirations of the


citizens. Therefore, there is need to have a bottom up approach with the active
participation of citizens.

2. Town planning, which includes detailed master plans, has to be more flexible; taking into
account both the international experiences as well the local conditions. For example,
micro town planning exercises as done in Gujarat. In order to leverage more land, we
may have to think of policies which go for higher FSI, etc.

3. The centre should prescribe a macro-framework and let the State Government customize
solutions according to the ground realities of their own states.

34
Section 4: Implementation Plan
Strategic Initiatives
1. Identification of the next wave of reforms on the basis of progress made in the first
period of the JNNURM

2. Setting up of three-four large scale urban management institutes in the country to aid
states and ULBs with good expertise in urban topics, including in the areas such as
financing, planning, urban management, and social development. The association of the
private sector experts for attracting the best talent available in the country to be part of
the Institutes

3. The Ministry of Urban Development to launch a massive programme of peer learning


and sharing systems which should identify and adopt the very best practices that have
guided urbanization around the world and customize the same to meet the local Indian
needs and challenges.

4. Provision for allowing the State Governments to hire advisors and sectoral experts
through a process to be approved by the Ministry of Urban Development. They should
also tapping of the external expertise to support the various urban development
initiatives.

5. Building of specialist teams facilitated and funded by the Centre to work with the States
and ULBs.

6. Outlining a clear framework for public-private sector participation. Creation of regional


knowledge centres/ centres of excellence by the Ministry of Urban development in
collaboration with Ministry of housing and urban poverty alleviation.

7. Reconsider if it is a better option to combine the Ministries of Urban Development,


Housing and Urban Poverty Alleviation for Managing Urban Affairs in the country.

8. Redesigning the project approval process under JNNURM into a two stage process to
reflect true and actual final costs. The DPRs should be approved in principle at the first
stage, and ULBs should be asked to provide estimates before the final approval.

Stakeholder engagement: Who, When, and How?


There are five broad categories of stakeholders

a. National level stakeholders: Union Ministries of Finance, Planning


Commission, and Central Ministries dealing with physical and social
infrastructure, having a bearing on urban development such as Ministry of
Power, Ministry of Non Conventional Energy Resources, Ministry of Housing
and Urban Poverty Alleviation, Ministry of Environment and Forests, and the
Centres of Excellence established by MoUD.

35
b. State Level Stakeholders: State Governments in General, and departments
like Town Planning, Housing, Urban Development, Public Health
Engineering, Health, Education, Transport, and Municipal Administration

c. Community and Group level Stakeholders: Local Self Government bodies,


NGOs, community based organizations, and citizens who are users of the
infrastructure.

d. Parastatal Agencies: State Urban Development Authorities, Solid Waste


Management Utilities, Water Supply Boards, Slum and Housing Boards, and
others.

e. Others: The citizens are the other main stakeholders, as they want good
governance, adequate infrastructure, and good quality city life.

How can the stakeholders help?


The various central government departments can help the Urban Development Sector by
synergizing their programmes and policies with those of urban development in the areas of
mutual interest.

The dynamics of relationship of the Urban Development sector with the State Level
Stakeholders is similar to the dynamics with central Government Ministries. However, the
impact of these relationships at the State level is more acute since urban development is a State
subject. The state level stakeholders expect that MoUD would support the State Level
Programmes and projects. As the MoUD depends on the States for the success of its major
initiatives, the State Governments need to help the process by aligning the policies with those of
the MoUD. This should include aligning the benchmarking by the State with the benchmarking
standards adopted by the MoUD.

Lack of support from the State can nullify the efforts of the MoUD in taking forward its agenda
of Urban Development. The community and group level stakeholders can help the MoUD to
enhance the impact by proper implementation of reforms and Projects. The ULBs can help by
aligning the bylaws with the models circulated by MoUD. The NGOs can help support MoUD
initiatives that require community work and engagement of civil society. They can provide an
interface with the public and provide feedback with the public from the ministry. The Civil
Society Organizations are very important since they can create opposition at a level which can
make it difficult for MoUD to take it forward.

The Parastatal agencies dealing with water, solid waste, etc can assist by adopting the model
bylaws and enforcing model regulations circulated by the ministry.

The citizens as stakeholders can contribute towards promoting the objectives of the Ministry by
active participation in local governance and in schemes of the Ministry, and contribute towards
the goal of having livable and vibrant cities. They are important as they can block the Ministry
by remaining aloof and uninvolved in its schemes.

36
Learning Agenda
The learning agenda for the Ministry of Urban Development will the critical knowledge
capability that is needed to produce the results. The following can be considered in this regard:

i. Acquiring and implementing innovative urban technologies for water, sanitation, and
sewerage, including those related to recycle and reuse of resources.

ii. The acquisition of expertise for involvement of the private sector in the distribution of
water supply and full recovery of O and M expenditure can also be on the learning
agenda.

iii. How to achieve effective synchronization of various city level plans such as city
sanitation plans, city dwellment plans, environment management plans, master
plans, and urban transport plans.

iv. Development of PPP models for different urban infrastructure projects

v. Development of models for generating financial resources using urban land as a base

vi. Developing and implementing a regional approach for sharing of common services and
utilities.

vii. Implementation of transit-oriented development

viii. Implementation of urban renewal in old urban areas

ix. Creating sustainable towns

Resources required
The resources have to come from allocations by the Central and State Governments,
augmentation of municipal finances as per the mandate enshrined for the local bodies in the
constitution, Private Sector participation, land monetization, and recovery of user charges,
foreign assistance (if possible).

Tracking and measuring: Measurables and observables to assess progress,


methods of review, methods of corrective actions
The project appraisal review and monitoring processes should outline clear and compressed
timelines for the mission at the central government level for approvals and dispersals.

Following activities could be measured for determining success.

i. Sanction of projects- success indicator would be timely sanction of project

ii. Completion of projects – success indicator would be number of projects completed

iii. Implementation of policy – success indicator would be ratio of activities implemented


against the actual target

iv. Capacity building – success indicator would be the total number of persons trained

37
v. Implementation of reforms – success indicator would be ratio of total reforms achieved
against those targeted.

vi. Activities launched by MoUD – such as benchmarking, preparation of sanitation plans,


and rating of cities, for creating an enabling environment for efficient and inclusive
urban governance and improvement of service levels and coverage.

Overall Plan and milestones: Detailed activities, points of coordination,


milestones, and review points
We would like to explain our timelines as follows:

i. Short Term – less than 1 year

ii. Medium Term – between 1 and 3 years

iii. Long Term – more than 3 years

Deliverable Milestone Points of Review point


coordination
Delineation of clear Medium Term Central Government Annual yields from
methods for for Model Law, State Property tax and tax
assessment of Government for base.
property tax – for actual law and
example, using implementation
Annual Rental Value
Method
Opening up of Union Long term Constitutional Law Commission and
and State Amendments – the Central
Government Articles 285 and 289 Government
properties for
Municipal taxation
Mapping of all Short term State Governments, Biannual reviews at
Government Urban Local Bodies, the highest level
properties using Central Government
GPRS tools
Octroi
Professional tax
Performance related Medium term Central Government Annual Performance
grants to municipal of the Municipality
bodies under JNNURM
Imposition of Short/Medium Term Central/State Annual Budget –
congestion charges in Governments State Legislature
megacities
Municipal borrowings Short/Medium Term State Government, Annual Municipal
– fixing of limits Local Bodies, and Budget of the Urban
- Municipal bonds Centres of Local Bodies

38
- Credit rating excellence(as outlined
in this Strategy paper)
Monetization of land Short/Medium Term Dissemination of best Review at highest
- enhanced FARs practices by levels- necessary
- cross subsidization Central/State approvals by
of land costs Governments with the Central/State
- Public Private help of Institutes of Governments
Participation: Using Excellence, Centres of
land as a State Urban Management
Resource

Appropriate Medium Term State Finance Timely receipt of


devolutions of Commission, State State Finance
finances to ULBs by Government Commission Reports
the State Finance with
Commissions recommendations
based on appropriate
experiences.
Change management Short/Medium/Long Urban Local Body, Performance related
in Urban Local Bodies Terms State Governments, incentives under
through with the help of JNNURM
dissemination of best experts and centres of
practices – Delivering excellence, etc.
a vision to guide
planners and
stakeholders
Building of specialist Medium Term Central/ State Periodic appraisal on
teams under Governments the availability of
JNNURM to work specialists
with the States and
ULBs
Launching of centres Medium Term Ministry of Urban Review at the highest
of excellence by Development/Central level
MoUD Government
Setting up of a peer Short/Medium Term MoUD – nodal Periodic appraisals
learning and sharing State Governments in
system across the conjunction
States
Enactment of model Short/Medium Term Central and State Central Government
municipal laws Governments, Reviews under
concerned legislatures JNNURM
Creation of Medium/Long Term State Governments State
professional Government/ULBs
municipal cadres
Water supply quantity Long Term State Government Civil Society
– in litres per capita and ULBs Associations , Local
per day – to be Bodies, and State
increased to 150 Governments
Share of public Long Term State Government Civil Society
transportation - % of and ULBs Associations , Local
total trips to be Bodies, Centres of

39
increased to 50% Excellence, Institutes
of Urban
Management, and
State Governments
Sewage Treated as a Long Term State Governments, Civil Society
percentage of sewage Parastatals, and Associations , Local
generated increased Urban Local Bodies Bodies, Centres of
to 100% Excellence, Institutes
of Urban
Management, and
State Governments
Collection of solid Long Term State Governments, Civil Society
waste as a percentage Parastatals, Private Associations , Local
of total waste Parties, and Urban Bodies, Centres of
generated to be Local Bodies Excellence, Institutes
increased to 100% of Urban
Management, and
State Governments
Slum population as a Medium/Long Term State Governments, Central Government,
percentage of total ULBs, State Governments,
population in cities – ULBs
drastic reduction
from current level of
over 24%
Reforms in water Medium Term State Regular review on
distribution sector – Governments/Central provision of models,
PPP project(full Governments/ULBs best practices, experts
recovery of O&M by Central and
expenses) Governments
Initiation of a full Medium Term State ULB, State Govt.
length scheme to Governments/Central
clean up and preserve Governments/ULBs
Urban Water Bodies
Deliberate Long Term ULB/ State Govt Annual report-
Afforestation of fallow Ministry of Forests/
land and wastelands Ministry of Urban
Development(State
Government)
Multi-mode public Medium Term ULB/State Central Government,
transport systems Govt/Central Govt for State Governments,
funding support ULBs
Mass Rapid Transit Long Term ULB/State Ministry of Urban
System in all Govt/Central Govt for Development
megacities funding support
Formulation of City Short/Medium Term ULBs/State Appraisal and review
Development Plans Governments/Central of new projects
with well defined Government for
Infrastructure expert support
Planning
Note: More such deliverables can be identified in a detailing exercise

40
Section 5: Linkage between Strategic Plan and RFD

An appraisal of the Results Framework Document of the Ministry of Urban Development for
2010-11 has been undertaken. It appropriately lists out the priorities among the key objectives
and outlines success indicators as also the targets.

However, we would like to propose amendments in the objectives relating to the creation of
basic urban infrastructure relating to water supply , solid waste, management, and other items
as far as they relate to the period 2011-12, and beyond and thereafter.

The main rationale for recommending modifications is related to the drastically low service
levels presently obtaining in many of the Indian cities. The goal of urban development has to be
to provide minimum service levels in these areas as universally accepted and discussed in this
document.

For example, across all of India’s cities, the current water supply available per capita is 105
litres per day(as against a basic service standard of 150), the slum population is 24% of the total
population(as against a desirable nil level), and the sewage treated is 30% of total generation.

All of these are below current global standards (in some cases, they are not even half of global
standards).

However, the situation has changed dramatically in the last few years, and it has become
incumbent to note the following pressures of the future (2030)

 At current rates of augmentation, Sewage treatment capacity is likely to be around 42


billion litres a day, as opposed to 151 billion litres a day required in India, 2030.

 At current rates of growth, water supply will be around 95 billion litres a day, as opposed
to 189 billion litres a day required in India, 2030.

The augmentation of services in these areas would mean a speeding up of the processes,
compressing of the time frames, and active pursuit of bringing in higher investments into
various components of urban infrastructure in the cities.

The objectives relating to facilitating urban sector reforms under JNNURM and capacity
building at various levels are in the right direction. The initiatives of the Ministry to set up
Centres of Excellence, Institutes of Urban Management, sharing of best practices, require to be
detailed out in the RFD for the year 2011-12 onwards.

The RFD of the Ministry would thus require amendments in respect of the activities that require
speed to be imparted to them wherever necessary.

41
Below are given the RFD breakups of the MoUD, and MoUHPA

Contruction of
projects by residences for
NBCC Govt Officers
2% RfD functioning Printing
Tsunami 3% 2% 1%
rehabilitation
2% Service Level
Benchmarking
Maintenance of
Govt Buildings 3% JnNURM
4% 42%
Issuance of
Advisories
3%
Infrastructure
in NCR Region
3%Estate
Management
4%
Introduction of
Bills Capacity
5% Housing in Building CWG
Delhi Infrastructure
6%
6% 14%

42
Compliance to Financial
Model Rental Bill
Accountability
Adoption of Street Framework 1%
Vendors' Policy, 2009, Tackling scavenging
2%
by States 1%
3% Advocacy and
Creating land bank for Sharing Database building
housing information 15%
2% of dry
Eradication 2%
latrines
4%
Improving transparency Rajiv Awas Yoja
4% 13%
Cost-effective building
technologies
4%

RfD functioning
5%

Promoting finance for


housing
5% Capacity Building
Improving 12%
responsivenessImplementation of JnNURM
Increasing emplyment 6% National Habitat Policy, 10%
opportunities 2007
5% 6%

43
Section 6: Cross departmental and Cross functional issues

This strategy paper outlines its key stakeholders at the central, state, and ULB level for a
successful implementation of the various urban development programmes, chiefly the JNNURM
and other schemes relating to the provisioning of urban transport services. In summary, the
various ministries of the Central and State Governments such as the Ministry of Power, Ministry
of Non Conventional Energy Resources, Ministry of Housing and Urban Poverty Alleviation,
Ministry of Environment and Forests, and the Centres of Excellence established by MoUD, have
to ensure that their schemes converge with those of the MoUD to augment the provision of
Urban Services in the cities.

Linkage with potential challenges likely to be addressed in the 12th Plan


The introductory write-up of the draft Twelfth Five Year Plan has the following to encapsulate
about Urban Development:

“Managing Urbanization

Most of our metros and cities are under severe stress with inadequate social and physical
infrastructure, coupled with worsening pollution. Migration pressures are likely to increase.
How do we make our cities more livable? What can we do today to ensure that smaller cities and
towns are not similarly overwhelmed tomorrow?”

The Strategy proposed in this document wants to convey one single most important
fundamental point - that cities are the primary thrust of ensuring fast economic growth in the
Nation. In an ideal sense, the provision of various desired service levels has to go side by side
with the growth of the city. There should be no deficits, as are being currently experienced in our
cities. We have come to the conclusion that additional city space to be generated for housing the
anticipated increase in the urban population in the next two decades as also the new satellite
and other counter magnet towns that may be promoted must have the basic provision of urban
services from the very beginning. This is necessary to attract capital from abroad, to find its
home in Indian cities, resulting in higher economic outputs, thus mitigating the challenge of
poverty in the Country – taking into account both urban and rural geographies.

In the absence of a proactive approach, the small and medium towns which will become the big
towns of tomorrow can suffer same problems as currently observed in the large towns. The
reform processes being undertaken in the metros and other towns included under JNNURM
must vitally succeed as they have the potential of becoming examples and role models for the
other cities. The success stories of current and next one or two years can become best practices
for emulation/replication in other cities not covered under the JNNURM, where urgent policy
and programme implementation are needed to improve the quality of city life.

44
A continuous and active engagement with ensuring a proper urban development in the country
will help in tackling with the challenge articulated for the twelfth five year plan as summarized
above.

Identification and management of cross departmental issues including


resource allocation and capacity building issues
A very strong interaction would be required of the programmes undertaken by Ministry of
Housing and Poverty Alleviation. The lack of affordable housing by EWS and other low income
groups affects the cityscape in an adverse way apart from the lack of basic facilities that need to
be provided to all sections of the population. The Rajiv Awas Yojana, to be implemented in the
near future, would require land to be made available for affordable housing under different
possibilities that the cities and the towns must explore when dealing with other aspects of urban
development, namely, preparation of CDPs, etc. The proposals on monetization of land would
require careful formulation so that, on the one hand, Government Agencies get a fair deal for the
land being used as a resource, and on the other hand, a sizeable portion of the land indeed
becomes available for undertaking affordable housing under the Rajiv Awas Yojana, or any other
initiative of the State Government/ ULB.

The traffic congestion on city roads and vehicular pollution continue to be major challenges in
many of the cities. The Departments of Transport and Environment of the State Government, as
also the State and Central Pollution Control Boards need to converge their efforts for bringing
the emission levels to acceptable standards.

The traffic police in our country invariably is part of the overall Policing and not with the cities
as is the case in some of the advanced countries. Disciplining of traffic, introduction of
intelligent traffic management systems, traffic calming measures need to be devised by the
concerned departments in close interaction with the Agencies/Authorities dealing with Urban
Development issues.

Cross functional linkages within departments/offices


The ministry of urban development oversees the work of various Central Government
Organizations and has the necessary capacity to continue to play a leading role in the field of
urban development. The Ministry is already acting as a catalyst and providing guidance and
advice on various matters pertaining to its mandate. It has formulated a number of National
Level Policies and set benchmarks for areas of Urban Development. The work undertaken so far
by the ministry includes formulation of Urban Transport Policy, 2006, Urban Sanitation Policy,
2009, Benchmarks for Urban Basic Services – Water supply, sewerage, solid waste
management, and storm water drainage. In addition, it has set benchmarks for eGovernance,
services, and Urban Transport.

The CPHEEO manuals on Water Supply, Sewerage, Storm Water Drainage, and solid waste
management, are standard guidance on the subject followed all over the country. UDEPFI
guidelines published by the Ministry through CPHEEO enjoy similar status for Urban Planning.

45
In the area of public works, the CPWD manuals, guidelines, contract documents, and schedule
of rates form standard reference materials.

In addition, the ministry has formulated Barrier Free Build Environment Guidelines and
standards; model municipal act; model town and regional planning act.

Technical Organizations: The Ministry has the support of a number of technical


organizations, under it, as well, as from outside. These are CPHEEO, TCPO, NIUA, and CPWD.
It has four regional centres for urban and environmental studies at Lucknow, Delhi, Hyderabad,
and Mumbai. The ministry has also set up eleven centres of excellence in reputed academic and
research organizations such as the IITs and IIMs.

Multilateral and bilateral organizations: The Ministry works with multinational


organizations such as USAID, World Bank, GTZ (Germany), Japan, France, for promoting
cooperation in the urban sector.

Organizational Review and Role of Agencies and wider public service


The Ministry of Urban Development and Ministry of Housing and Urban Poverty Alleviation
earlier worked as one ministry. The JNNURM which is the flagship programme on urban
development is being implemented by the Ministry of Urban Development. No new
organizational structures have been created for the coordination of the programme either in the
Central Government or the State Governments.

The recommendations from the midterm appraisal of the Eleventh Five Year Plan undertaken by
the Planning Commission on Urban Development propose consideration of new approaches to
unifying the JNNURM at the Centre. An option indicated is to combine the abovementioned
ministries of the Central Government. The subjects being handled by the two ministries are
definitely interrelated and a unified approach is therefore necessary. This could be considered,
or appropriate and extensive interaction between the two ministries may be undertaken to
produce best synergies. The suggestion to create unified urban mission at State Level merits
serious consideration in this background for proper oversight and project management of the
activities funded under the JNNURM.

All the Government stakeholders should extensively interact with civil society organizations and
other pressure groups interested in proper and balanced growth of the cities. This should
include pressure groups, Non Governmental Organizations, and committed and driven
individuals.

46
Section 7: Monitoring and Review arrangements
We endorse the creation of an Urban Monitoring Authority to benchmark the quality of services
in ULB in each state and to provide transparency on ULB performance and citizen satisfaction.
The suggestion to create an integrated urban mission with state funding in every state is also
recommended for implementation.

A system of local body Ombudsmen to look into the complaints of maladministration is also
endorsed by us.

47
Conclusion

The launching of the JNNURM in the country has provided recognition to the fact that managed
urbanization is vital for India’s economic growth. It is going to be a long journey to augment city
infrastructure to acceptable standards.

As discussed in this strategy document, ways and means for change management need to be
found and implemented. The next generation of reforms as outlined in this document has to be
taken forward. Extensive learning and innovation for the ULBs and other stakeholders has to be
undertaken through the proposals made in this strategy document, namely, Centres of
Excellence, Institutes of Urban Management, and Sharing of Best Practices, empanelment and
provision of consultants and experts, including from the private sector, public-private sector
participation, etc.

To make change happen, central Government has to continue to play a catalytic role despite the
fact that urban affairs are in the realm of State Governments. Without a Central Government
programme, change is unlikely to happen if matters are left to State Governments.

Good cities will remain of great interest for private institutions to make investments. The big
companies that can make investments will demand urban transformation as a prerequisite for
investments in infrastructure. In turn, the economic growth at high rates will occur in the Indian
cities of tomorrow, improving overall quality of life and reducing poverty across all sections of
society.

48
References

 Eleventh Five Year Plan – Chapter 11 on Urban Housing

 McKinsey Global Institute Report – India’s Urban Awakening: Building inclusive cities,
Sustaining Economic Growth

 Internal document, MoUD

 Midterm review of Eleventh Five Year Plan

 Outcome budget, MoUD

 Annual Report, MoUD

 Prof. Altschuler – class lecture

 Instructions provided by Dr Prajapati Trivedi

 World Bank Urban Transport Strategy Review - Mass Rapid Transit in Developing
Countries Final Report July 2000

 UN World Urbanization Prospects: The 2003 Revision

 http://www.un.org/esa/population/publications/wup2003/WUP2003Report.pdf

 Website of Bruhat Bengaluru Mahanagara Palike; http://www.bmponline.org

 World Bank : India Water Supply and Sanitation Bridging the Gap Between
Infrastructure and Service., Background Paper, January 2006

 Report of the National Commission on Macroeconomics and Health (Ministry of Health


and Family Welfare, Government of India

 India Infrastructure Report, 2006

 Tim Harford: The Logic of Life, Random House, February 2009

 Nandan Nilekani: Imagining India, Allen Lane, 2o09

 JNNURM: Financial Analysis and Trends based on Capital Investment Plans, Detailed
project reports and Release of Funds; compiled by Technical Cell, JNNURM Mission
Directorate and Pricewaterhouse Coopers

 http://www.citymayors.com/features/urban_areas1.html

49
 Second Administrative Reforms Commission – Report on Local Governance

 Twelfth Finance Commission Report

 Thirteenth Finance Commission Report

 Planning Commission - Report of the Committee on Urban Development for the 10th 5
year Plan (2002-2007)

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