The Recognition being given to cities as engines of growth is encouraging. Cities, however, can be effective engines only to the extent they are functional and can deal with the challenges of a rapidly-changing world. This includes being able to deliver basic services, offer productive employment to their residents and provide a safe, liveable environment. This is both a governance and finance issue, each as challenging as the other.
While there is discussion, and some movement, on addressing the finance problem, the amount of debate that governance needs is inadequate. Well-governed cities have the ability of being responsible for themselves to work efficiently and, in doing so, they become sustainable and capable of attracting finance. City structures created by the 74th Constitutional Amendment leave much to be desired, even though urban agglomerations have grown exponentially and the population flocking to cities has risen with cities themselves spilling out of their boundaries in a big way. It is obvious that governance structures and mechanisms need to be scrutinised, re-evaluated and modified as needed. This is especially true of our large metropolitan city-regions.
For all ‘larger urban areas’, which are specified by state governments according to size of population, revenue generated, percentage of employment from non-agricultural activities etc., the defined municipal structure is that of a municipal corporation. The Constitution does define and treat the ‘metropolitan area’ as different, as ‘an area having a population of ten lakhs (one million) or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas…’.
As per the Ministry of Urban Development (MoUD) website, there are 53 such cities/areas in the country. Of these, there are three - Greater Mumbai, Kolkata and Delhi - that have a population between 14-18.5 million and another six cities with a population of close to 5 million and above. The governance structure for all these remains the municipal corporation. The experience, thus far, of the constitutional amendment has been that state governments have not really devolved powers effectively to urban local bodies (ULBs) towards either decision making or raising finances. Municipal governance in urban India is characterised by a weak political centre and a proliferation of agencies and ULBs remain financially vulnerable and weak. While all cities need to be empowered on both counts as they stand, through the different programs of the government, it is perhaps time to start treating cities with a population of 8-10 million (and above) differently and create special governance structures for them. These metropolitan cities and the integrated areas around them are simply too large and too important for the country to be ambling along the same path as other smaller units.
All that is possible within the existing framework has probably already been tried, with much done and much lost. If nothing is changed, infrastructure levels in 20 years would fall woefully short, risking all the expected investment in these cities according to a McKinsey Global Institute Report of 2015.
Globally, big cities or integrated metropolitan city-regions, as they are sometimes called, are dealt with in a separate manner, recognising sound metropolitan governance as being a critical part of the solution to improve growth and well-being, not only for those centres but for the economy and country as a whole.
A 2015 study by the OECD, titled, ‘Governing the City’ has found evidence to indicate that metros with poor governance arrangements have sub-optimal socioeconomic results… and that with better and integrated governance higher growth and well-being are achieved. The other noteworthy points are the role national governments play in providing incentives to deepen collaboration and in laying down the regulatory and financial frameworks clearly and the criticality of financial autonomy for urban bodies both in having responsive sources of their own and in having regular, predictable and transparent transfers …’
The governance structure of the largest metropolitan cites of India stands in stark contrast to similar-sized cities globally, most of whom have elected executives. Through an independent governance structure would come the freedom to plan for the city, to recruit highly-skilled and well-paid technocrats that are needed for running large cities and to raise finances together with higher tiers of government while remaining accountable to the electorate.
There is no one way of doing this. Three examples that are helpful from an Indian perspective are the Chinese model for four cities with a population above 24 million, London and Johannesburg. Shanghai, Beijing, Tianjin and Chongqing are called ‘directly-controlled municipalities or province-municipalities’; they have the same rank as provinces; and form part of the first tier of the administrative divisions of China.
London has a two-tier system of local and regional government after the establishment of the Greater London Authority (GLA). There is no state government in between, the Mayor is directly elected and has four city-wide functions. GLA has no taxing powers but transfers are predictable and transparent, allowing the Mayor to set the budget and appoint staff. Local boroughs still exist but the strong leadership and political representation that Londoners have after the Mayor and GLA have added to the strength of the city.
Johannesburg is most similar to the Indian situation, in that it is within the state of Gauteng that has opted for the executive mayor-in-council system, similar to Kolkata. The mayor is assisted by a mayoral committee and the administration is headed by a City Manager supported by an executive management team responsible for staffing and coordinating implementation of all programmes approved by the council. The force behind this is the Constitution that has two lists, one for national and regional governments and one that sets the functions for the provincial governments. There is a Part B of both Schedules that lists out the functions for which local governments have the ‘executive responsibility… and the right to administer’. The principle of subsidiarity is also enshrined in the Constitution by virtue of the fact that in addition to the above, even for functions in Part A of both Schedules, both the national and regional governments ‘must assign to a municipality, by agreement or subject to conditions, matters that necessarily relate to local administration if the matter would be most effectively administered locally and the municipality has the capacity to administer it’.
Innovation and investment helps turn urban centers into economic powerhouses and their residents need better political representation, services, infrastructure and more accountable governance to aid this process. Governing the larger Indian metropolis with its massive population and economic prowess is far more complex than what can be handled with the mechanisms at hand. The time to think of the integrated metropolitan city-region as a separate entity is here.