7. Urbanization and Governance

Governance forms an integral part of Urbanization. Governance is the weakest and most crucial link which needs to be repaired to bring about the urban transformation so urgently needed in India. Financing the large sums required to meet the investment needs of urban infrastructure is crucially dependent on the reform of institutions and the capacity of those who run the institutions for service delivery and revenue generation. It is seen that large expenditures on Indian cities and towns have to be combined with better governance structures, strong political and administrative will to collect taxes and user charges, and improved capacity to deliver. Cities must be empowered, financially strengthened, and efficiently governed to respond to the needs of their citizens and to contribute to the growth momentum.

The municipal entities need to be strengthened as local governments with ‛own’ sources of revenue, predictable formula-based transfers from state governments, and other transfers from the Government of India and state governments to help them discharge the larger responsibilities assigned to them by the 74th Constitutional Amendment. Improved tax revenues combined with rational user charges will enable cities to leverage their own resources to incur debt and also access new forms of financing through public private partnership (PPP). Only then can they augment the urban infrastructure base, provide improved quality of services on a sustainable basis to their residents, and contribute to the growth momentum of the Indian economy.

Administrative reforms commission in its 6th report mentioned measures to strengthen the urban governance. Some of its important recommendations are-

♤ Urban local bodies should be given responsibility for water supply and distribution in their territorial jurisdiction whether based on their own source or collaborative arrangements with other service providers.

♤ Sanitation, as a matter of hygiene and public health, must be given priority and emphasis in all urban areas. In all towns, advance action for laying down adequate infrastructure should be taken to avoid insufficiency of services.

♤ Community participation and co-production of services should be encouraged by municipal bodies. This should be supplemented by awareness generation.

♤ In all towns and cities with a population above one lakh, the possibility of taking up PPP projects for collection and disposal of garbage may be explored.

♤ Municipal bodies should be encouraged to take responsibility of power distribution in their area.

♤ Urban Transport Authorities, to be called Unified Metropolitan Transport Authorities in the Metropolitan Corporations, should be set up in cities with population over one million within one year, for coordinated planning and implementation of urban transport solutions with an overriding priority to public transport.

As per NITI Ayog, well-run ULBs should have the power to raise financial resources including through municipal bonds. Introduction of Standardised, time-bound, audited balance sheets across ULBs would help improve financial management as well as spur further reforms in this area. Indian cities also need to overhaul their municipal staffing and introduce appropriate skills to achieve administrative efficiency

Similarly, to speed up the process of cleaning up municipal solid waste, NITI Ayog suggests the creation of an authority at the Centre to spread the use of Waste to Energy plants. Such an authority may be called Waste to Energy Corporation of India (WECI) and placed under the Ministry of Urban Development. WECI may set up world class Waste to Energy plants through PPP across the country. It can play a key role in fast-tracking coverage of waste to energy plants across 100 smart cities by 2019. Its mandate may include key functions of preparing standard tender documents, prequalify vendors and allot to ULBs and cluster of ULBs, and ensure priority clearance for qualified vendors, among others.

Strict enforcement of traffic rules through fines in case of violations can induce behavioural change and could greatly reduce both the travel time and pollution. Additionally, incentives may be created to encourage vehicle-sharing systems such as Ola and Uber. This will reduce the number of vehicles on the road reducing both congestion and pollution. Also, there is a need for a national metro rail policy that will ensure that metro projects are not considered in isolation, but as part of a comprehensive plan of overall public transportation. Further, the policy should provide clear guidelines on various aspects of metro projects, such as planning, financing, PPP, etc.