Reforming India’s Urban Governance

India needs to create opportunities for cities and towns to grow and become vibrant centres of investment and productivity. This requires amendment of 74th Constitution Amendment Act and certain administrative measures such as the provision of a minimum level of municipal staff, improved finances and incentives for active participation of citizens

As urban India’s population surges, there is concern that any one of the many challenges – affordable housing supply, congested roads, limited water, and sanitation services – will amplify and undermine India’s economic growth. To meet the challenges of this inevitable urbanisation, India needs well-performing cities. While cities in India are filled with vibrant activity and energy, they are also chaotic, complicated, and too often congested.
Recent global policy discourses orchestrated under the aegis of the United Nations, such as the Agenda for Sustainable Development (2030), the Paris Agreement, the Quito Protocol and the New Urban Agenda all stress upon the need for concerted focus at the city and the community scale – not only to achieve long term developmental objectives but also to make direct tangible benefits to the quality of lives of the people. With poverty reduction as the overarching vision, the Sustainable Development Agenda has identified 17 Sustainable Development Goals (SDGs) by building upon the earlier set of Millennium Development Goals (MDGs).
Despite successes achieved by many local governments in improving infrastructure services, India’s real challenge is replicating and sustaining these innovations on a large scale. Recognising the fact that Urban Development is a State subject states are looking at ways of sustaining and building upon the current reform agenda and scale-up pilots that have started showing results at the city level, so that tangible results become widely institutionalised, and fully embedded into the local system. The emerging challenge in institutionalising and scaling up these efforts, assuring that governance structures are credible and effective, recognising capacity challenges for coordination and collaboration, bringing efficiency in service delivery and financing requires a continuous effort over the long term to encourage and sustain change.
Urban expansion is inevitable. The vision draft National Urban Policy Framework 2018 is to see cities as complex and changing agglomerations of people who are constantly interacting with each other, with socio-economic institutions and with the built environment. The soft and hard infrastructure of the city provides the backdrop for such interaction and are not ends in themselves. The exact optimisation of a specific city, therefore, depends crucially on local context and local governance issues.
In order to address urban challenges, GoI has taken various initiatives and flagship missions. The focus of all the missions was to make the city work and ensure that both today’s and tomorrow’s needs are met. However, all these missions have been centrally driven. The problem with the traditional, centralised development model and experimentation is that cities are becoming dependent on central funding without developing institutional mechanisms at the local level to address urban challenges. One of the major lessons learned based on missions is that transformation requires renewed efforts and to revisit business models of engagements with cities. This calls for a significant shift that is necessary to ensure that the underlying governance principles of participation, decentralisation, autonomy, and accountability of representative urban local governments are kept in view.
The 74th Constitution Amendment Act (CAA) which came into force in June 1993 was a step envisaged to empower the Urban Local Bodies (ULBs) and strengthen urban decentralisation. While the constitutional amendment laid down a roadmap for decentralisation and greater devolution of power at the state and local levels, the implementation is slow and yet to take roots, implementation of CAA has raised many issues in order to deliver the 21st-century solutions. These are discussed in the next sections and it is followed by certain recommendations.

The Mayor should be the Chief Executive of the municipal body while the Commissioner should perform the allocated duties. Elections to ULBs should not be, generally, delayed beyond six months. Incentives should be provided for increasing citizens’ participation at area sabha, ward committee, and zonal committee levels in ULBs

Issues
In most states, Mayors do not have executive powers as they are vested with the Commissioners. There are some exceptions such as Kerala where Mayor has some executive powers. In contrast to this, the New York City has a strong ‘mayor-council’ system and fully empowers the Mayor with executive powers.
The 74th CAA provides a framework to enable participation of citizens in urban governance. It contains an enabling mechanism to form wards committees for citizens’ participation. Concept of Area Sabha was introduced to promote a sense of belongingness, inclusion and participation in working of ULBs. However, it has remained on paper in most states. In contrast, South Africa has clear policies for local governments to build partnership with community organisations and encourage citizen participation. Indian cities have many agencies providing urban services such as municipal corporation, water supply and sewerage board, and urban development authority, and these agencies, generally, do not work in an integrated manner.
Citizens, often, do not know whom to approach for civic problems. However, in Metropolitan London, the boroughs (municipalities) are responsible for civic administration. The Mayor drives key citywide strategic functions. Similarly, in the city of Seoul, multi-disciplinary urban renewal is driven by a strong leader in the heart of the city by leveraging stakeholder conflict, effective civic personal collaboration, and public engagement.
As per 74th CAA, state governments have set up State Finance Commissions (SFCs). Most SFCs have formulated the fiscal packages without access to a clear directive on the functional jurisdiction of municipalities. With the amendment of Article 280 in 1992, the Central Finance Commission (CFC) have to address the issue of municipal finances. CFC grants are not sufficient for managing urban areas.
Most ULBs in India do not have the capacity to promote cities as ‘engines of growth’. The local agencies have weak institutional capacity to plan spatial, social and economic development, have unstable revenue streams, and low capacity to plan, mobilise resources, and implement urban infrastructure projects.
The ULBs are not in charge of planning for ‘economic development and social justice’ and implementation of city/town development plans due to the failure of state governments to amend State Acts. Further, Metropolitan Planning Committees (MPCs) and District Planning Committees (DPCs) have not been assigned a clear role in preparation of regional and urban plans. The 74th CAA has mandated the State Governments to constitute MPCs and DPCs, which are responsible for the preparation of the Metropolitan Plan and District Development Plan.
In the Constitution of India, there is no “municipal finance list” to match the municipal functions. Further, the 74th CAA is not specific about the types of taxes ULBs should have but on the other hand, the powers for determining the revenue base of ULBs rests with the state governments. ULBs revenue bases are limited and inflexible.

Suggestions
To improve urban governance and delivery of services there should be constitutional amendments as well as administrative actions. These are:

Constitutional Amendments
The 12th Schedule of the Constitution should be amended and classify the functions into the core, assigned by the government and other functions. Sub-section (a) (ii) in Article 243-W should be amended so that ULBs should be accountable for provisions of core services in 12th Schedule. The term ‘may’ in the sub-section should be replaced by ‘shall’ for core functions. The services may be provided by the ULBs directly or indirectly through parastatals or outside agencies. Article 243-Q should be amended so that industrial areas are not exempted from the formation of ULBs. Article 280 deals with CFCs. The sub-section 3(c) in this article should be amended so that CFCs provide grant-in-aid to ULBs linked to net proceeds of taxes (and not ad-hoc grants). There should be ‘municipal finance list’ in the Constitution to match the municipal finances to its functions.

Management Actions
To strengthen ULBs, a minimum level of staffing should be provided for them. The Mayor should be the Chief Executive of the municipal body while the Commissioner should perform the functions delegated to him/her. Elections to ULBs should not be, generally, delayed beyond six months. Incentives should be provided for increasing citizens’ participation at area sabha, ward committee, and zonal committee levels in ULBs.
To provide financial support to ULBs, SFCs should be constituted every fifth year. The SFCs should submit their reports in time to be considered by CFC. Common formats must be adopted, and annual accounts and other data must be compiled and updated for use by the SFCs. SFCs should identify taxes, user charges and fees to be levied by ULBs.
As far as planning is concerned, MPC/DPCs need to coordinate with various agencies with regard to the implementation of various programmes. The programmes need to be prioritised as per the Plans. Management of water supply and sewerage system should be the primary function of ULBs. They should be given responsibility for water supply and distribution in their territorial jurisdictions whether based on their own source or on collaborative arrangements with parastatal and other service providers. Parastatal agencies should be accountable to ULBs.
Moreover, the Model Municipal Law developed by the Government of India (GoI) in 2003 should be reviewed and revised.

Conclusion
Creating opportunities for cities and towns to grow and become vibrant centres of investment and productivity is, therefore, quite crucial in transforming the nation. The 74th CAA has led to regular elections of ULBs, reservation of seats and constitution of SFC. However, urban governance in India needs further strengthening through amendment of 74th CAA and certain administrative measures such as the provision of a minimum level of municipal staff, improved finances and incentives for active participation of citizens.