Smart city pitfalls

Can't rely only on states to power urban renewal

The National Democratic Alliance (NDA) government has replaced the flagship urban renewal programme of the previous government with two projects of its own — in the process also replacing the name of India’s first prime minister, the Congressman Jawaharlal Nehru, with that of the Bharatiya Janata Party (BJP)’s Atal Bihari Vajpayee. It is to be hoped that at the end of the day there will be more than a change in nomenclature and the “smart cities” and Amrut (Atal Mission for Rejuvenation and Urban Transformation) programmes will be genuine improvements over the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The latter ran for 10 years and spent Rs 43,000 crore (the Centre paying 85 per cent of it). Thanks to this project, several smaller towns managed to update their transport infrastructure in particular. But the next step is to have a more holistic view of the improvements possible in urban life. Certainly, the stakes are higher: the NDA’s two missions are billed to run for five years (half the time of JNNURM) and spend five times the amount, Rs 2 lakh crore (the Centre footing half the bill).

The most visible footprint of JNNURM is flyovers, buses bearing the mission’s logo and some – albeit inadequate – housing for the poor. It got off the ground quickly, got the corporate sector and civil society organisations involved and most importantly stressed the need to bring about reform in urban local governance. At the end of the day, however, reform did not go far enough. But funds got disbursed anyway — there is an inexorable compulsion to continue releasing funds for projects that have already received some funding.

How will “smart cities” be different? After all, there is minimal clarity on what they involve. Towns will have to win the status by competing; their states will prepare proposals for them that will be evaluated by the Centre. Each smart city will get Rs 100 crore a year for five years. Their action plans will be run by special purpose vehicles whose funding will have to be arranged by the state governments. The Amrut mission seeks to relate “implementation” to progress of reform. The main change is that the Centre will not appraise projects, as was the case with JNNURM; the states will have to submit annual plans for broad concurrence.

Overall, both the new missions rely more on the good sense of the state governments to make a success of urban renewal with a lower proportion of the funding coming from the Centre than was the case with JNNURM. This is in keeping with the federal mindset of the NDA government and the different financing patterns of the post-14th Finance Commission policy landscape. Unfortunately, there is a problem with this design. Most state governments have till now been unwilling to take urban local government reform forward. State politicians do not wish to lose power over the income- and rent-generating engines that are cities. But without administrative reform, local bodies will struggle to make good use of the funds. Consider the mayors of many large cities like Mumbai, Bengaluru and Delhi — they are little known, not directly elected and hold office for one to two and a half years, with most of the executive powers resting with municipal commissioners. For urban reform and renewal to take off, civic bodies have to be led by politicians of some standing and reasonable tenure.