New Delhi: Past experience has shown that city authorities are capable of delivering better services to inhabitants by investing more in infrastructure and with greater involvement from the private sector, especially since city governments are nearest to the people and most directly accountable, says a new book, Financing Cities.
For instance, Delhi’s record since its conversion into a National Capital Territory with its own assembly has demonstrated that there has been sharper focus on issues of infrastructure and governance than earlier, thus resulting in substantial improvement in its infrastructure.
The metro rail project, privatization of power and lowering of pollution by requiring buses to use CNG are some examples cited by the book, edited by George E. Peterson, senior fellow at the Urban Institute, Washington DC, and Patricia Clarke Annez, urban advisor to the World Bank.
In Mumbai, the book says, the electricity and bus services managed by the municipal corporation are far better than the local trains run by the monolithic Indian Railways.
A substantial opportunity to mobilize finances for much-needed infrastructure can be opened up once the Union and the state governments find means of endowing municipalities with more substantial revenue and the administrative autonomy to manage them, the book says.
The book is based on a conference on Mobilizing Urban Infrastructure Finance in a Responsible Fiscal Frame; Lessons from Brazil, China, India, Poland and South Africa.
According to the book, India, still predominantly rural, has a larger urban population than the entire US population. With urban India growing at double the rate of rural India, the demand for urban services and infrastructure is expected to increase quite sharply in the years to come. Of the total 1.027 billion population as of 1 March 2001, 285 million—150 million males and 135 million females—were living in urban areas.
The area covered by the municipal corporation of Greater Mumbai is the most populous in India, with 11.9 million people accounting for 16.3% of the total population of the million-plus cities in the country.
Mumbai is followed by Delhi’s municipal corporation with a population of 9.8 million and Kolkata with 4.6 million.
The Mumbai floods reminded the editors that even as they framed fundamental economic reforms, the biggest gap in India’s infrastructure was urban infrastructure.
The whole world envies the congregation of brilliant, entrepreneurial people in Bangalore, but the city is dying a slow death owing to a congested and dysfunctional infrastructural system, says Vijay Kelkar, former finance secretary, in the foreword to the book.
In India, no management team, no institution can be held responsible for urban infrastructure and none can be held accountable when the system fails, Kelkar says. If institutional arrangements are clear, with transparent rules for accountability, and authorities are fiscally responsible, capital markets will provide adequate resources for overcoming the infrastructure deficit of the urban economy.
In India, the urbanization rate is 30% while in China it is 40%. Over the next 25 years, Indian and Chinese cities alone will absorb a population increase greater than twice the entire current population of the US, the book says.
Successful policies must meet the demands for infrastructure and services to which this will give rise, it adds.