Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
For creating “Vibrant Cities”: Decentralise and Empower City Governments
Municipal Governance: Background
In 1992, India took some early steps to recognize metropolitan regions as agglomerations requiring coordinated economic and spatial planning.
Towards this end it also passed the 74th Constitutional Amendment Act, 1992
74th constitutional amendment added Part IX-A to the Constitution of India. It is entitled as ‘The Municipalities’.
The constitutional amendment inserted provisions from Articles 243-P to 243-ZG.
In addition, it also added Twelfth Schedule to the Constitution. It contains 18 functional items of municipalities listed under Article 243-W.
It gave constitutional status to the municipalities and brought them under the purview of judicial review.
In other words, the state governments are under a constitutional obligation to add this new system of municipalities in accordance with the provisions of the Act.
The Act aims at revitalizing and strengthening the urban governments so that they may function as effective units of local government.
But progress thereafter has been limited.
How to bolster metropolitan governance?
Sustained efforts on three fronts are needed to bolster metropolitan governance:
Establish a powerful and effective Metropolitan Planning Committee (MPC)
Add three important functions—housing, transport and police – to the 12th schedule
India should consider moving to the system of a ‘directly elected mayor’
First, make MPC effective and powerful:
Article 243ZE mandates the establishment of the Metropolitan Planning Committee (MPC) to prepare a draft development plan focusing on shared resources, investments, infrastructure and environmental conservation for the region as a whole for approval by the state government.
But the MPC has failed to take off for two reasons.
One, state governments are reluctant to concede power.
Two, the design of the MPC as a supra-municipal authority has limitations. Being a body politic, the MPC does not have executive powers, staff and budgets. These shortcomings render it toothless.
Some states have recommended reforms in Municipal Authority., where it wants to establish a Metropolitan Development Authority, which will be chaired by the chief minister and will have overriding powers on all matters ranging from economics to planning.
It wants this body to be managed by an IAS officer who will be the de facto commissioner in charge of day-to-day affairs and suggests for participation from different quarters – such as MLAs, the chief secretary and other concerned secretaries.
However well intentioned, such reforms will increasingly consolidate the powers of the state government and, will in turn, stunt decentralization
The larger peril is that this could have a contagion effect across states, because there are absolutely no reasons to substantiate why successive chief ministers would want to cede control of such “a mother of all agglomerations”.
Second, add three functions to the 12th Schedule:
Despite Article 243W in the 12th Schedule, city governments lack the span of control required to administer cities effectively.
In other words, the 12th Schedule is incomplete in mandating the transfer of functions to local bodies. It remains completely silent on three important functions—housing, transport and police.
Consequently, state governments continue to hold these functions. This control provides state governments with unrestrained power over capital-intensive sectors, indirectly enabling them to control cities.
Therefore, it is important to add these functions to the 12th schedule, so the Municipal bodies can perform their functions independently without any subjugation by the state governments.
Third, move to a directly elected mayoral system of urban governance:
Some state governments are recommending restructuring the Municipality, by splitting the city into different municipalities, each to be governed by a elected mayor.
However, it would have been better off recommending a metropolitan mayor and government for the city as whole rather than different mayors who, when elected, could represent different political parties.
Result would be chaos. Because politically fragmented, contiguous areas sharing civic amenities could be held hostage to political differences and potentially result in a stalemate and deteriorate the quality of life across the metropolitan region.
Unfortunately, India is one of the few parliamentary democracies in the world yet to make the shift to the system of a directly elected mayor. Over time, India must consider moving to the system of a directly elected mayor similar to London.
The way ahead:
A more democratic approach would be to create a metropolitan-level authority that ensures horizontal coordination by providing the MPCs with a full-time secretariat that has teeth, that is, staff, budgets and executive powers.
This body (MPC) could act as anadditional layer of government between the municipal bodies and the state government, and eventually the municipal commissioners could report to the metropolitan commissioner in addition to their elected governments to facilitate coordinated governance.
Further, the MPC could draw participation from members of Parliament. Such composition would provide sufficient balance of power at the city level and ensure the central government has some stake in metropolitan cities as defined in the Constitution.
In essence, India’s democratic set-up could suitably ensure independence of its metropolitan cities.
India is on course to have 69 metropolitan cities by 2025, and many of these cities are likely to equal the size of some countries today. For example, by 2030, the Mumbai Metropolitan Region will be more populous than Australia and, with its GDP at about $230 billion in 2030, its economy will be bigger than that of Thailand or Hong Kong today.
To embark on this journey,parliamentarians across party lines need to work on a constitutional amendment that lays out the road map for urban governance reform.
Supplementing this process with a vibrant and inclusive process of dialogue across stakeholders is vital to build consensus. India’s experiences show that the passage of path-breaking reforms, for example, the goods and services tax, requires a decade or more, for dialogue and passage. This makes acting with urgency a necessity.
India needs a 10 Point Urban Reform Programme that has the ability to transform urban India, and visibly enhance the quality of life for its citizens.
Reform the 74th Constitutional Amendment to empower city governments, bolster the metropolitan system of government, and move to a system of a directly elected mayor.
Fix governance at the Centre and in the states to reduce fragmentation and facilitate alignment of functions.
Make the office of the mayor politically relevant to create a culture of meritocracy and performance.
Build world-class institutions to catalyse capacity at scale.
Establish a National Urban Finance Corporation of India to fund urban infrastructure projects.
Set up the regulatory architecture required to facilitate efficient and effective urban services delivery.
Reform the civil service, and establish executive agencies to hollow out inefficiencies.
Revitalize the role of the State Finance Commissions to bolster municipal finances.
Introduce state-specific laws on land use and transport to override legislative vacuum.
Deepen citizen engagement in cities to drive change across localities.
Connecting the dots:
Critically analyze the working of ‘City Governments’ in India. What immediate actions should India take to embark its journey of transforming the growing metropolitan cities into more sustainable and vibrant cities?
There is an urgent need to reform the 74th Constitutional Amendment to empower city governments, bolster the metropolitan system of government, and move to a system of a directly elected mayor. Do you agree? Elaborate on your opinion.
General studies 2:
Government policies and interventions for development in various sectors and issues arising out of their design and implementation
General studies 3:
Infrastructure: Energy; Conservation, environmental pollution and degradation
Mobilising Inputs for Renewable Energies
With the new set of environmental challenges and their perceived dangers, there is an urgent need for India to develop a range of innovative environmental technologies to help increase its energy security, reduce the adverse impacts on the local environment, lower its carbon intensity, contribute to more balanced regional development, and realize its aspirations for leadership in high-technology industries.
But for them to achieve their market potential—proper policy frameworks and financial instruments are necessary that give financiers the necessary assurance and incentives to shift investment away from carbon-emitting conventional technologies to large-scale investment in clean energy systems
And to achieve these goals, India needs an order-of-magnitude increase in renewable energy growth enhancing the creation of an enabling environment for renewable energy development, while at the same time, not compromising on the environmental integrity that should be maintained.
Critical elements to mobilize inputs for developing countries:
Building innovative financial instruments—
Global trade in wind turbines, water filters and other environmental goods amounts to nearly $1 trillion annually but are increasingly stifled by the high tariffs which put limitations on many countries in terms of accessing these technologies.
Huge capital investment is required— around $95-100 billion equivalent of investments (at Rs 65/USD) to meet the 100 GW target of 2022 (current outstanding bank credit to the entire Indian power sector (conventional and RE) is $85 billion equivalent)
Removing unnecessary taxes is the need of the hour for which forty-four countries under the World Trade Organization are working towards an Environmental Goods Agreement (EGA) that would eliminate tariffs on environmentally friendly goods —
Affordable green technology solutions
Protect the environment
Studies on EGA—
EGA could boost global exports of environmental technologies by up to $119 billion annually
European Union projects a potential reduction of nearly 10 million tonnes of carbon dioxide by 2030
Creating strong financial institutions—
Collective actions of Developed countries and International financial institutions to—
Leverage private capital
Build policy incentives for directing private finance to developing countries
Create an investment-conducive environment
Develop capacity building mechanism and knowledge sharing programs,
Establish development and education strategies
Provide incentive-based governance mechanisms to attract investors
Developing green energy projects—
Government should realize that the transition to a green pathway is becoming financially viable and there is a need to provide frameworks for green growth that can lower policy uncertainties—by fostering a favourable policy environment for investors.
Solving Technical challenges—
In integrating intermittent power generation via solar and wind, with conventional grids
Grid-balancing needs to get smarter
Requirement of smart solutions for net metering i.e., adjusting power bills to reflect RE generated and be put on the grid by the consumer
Bridging the Skill Gap—
High-quality and accessible certification programmes—reducing the need for and costs of on-site training
Under Skill India, renewable energy training clusters could be located near ongoing solar energy projects. At least one prominent solar training institute could be established in each region projected to be a hub for major solar activity (e.g., Gujarat, Rajasthan, and Karnataka).
Introduction of mobile training courses, where trainers move from one location to another, would add value
The most challenging skills to find—basic construction and commissioning skills, including electricians and PV installation technicians for which training programmes focused on fundamental construction, commissioning and operations skills should be expanded across the country.
The International Solar Alliance can establish certified training programmes and help to build common curricula in close consultation with the private sector, and make the workforce qualified for deployment within India and outside
Connecting the Dots
Write a short note on ‘mezzanine finance’ and its future in India.
Are investment conditions for renewable energy in India appealing enough? Suggest the way ahead.