February 25, 2014

Why Urban Administrators are Poor Service Providers

In this Business Standard article, IDFC Chairman Rajiv Lall explains:

“Our administrative machinery was designed to serve only two tiers of government: the Centre and state. The third tier has never had any meaningful administrative support, leaving our municipalities with chronic capacity constraints. Barring a few exceptions there is very little project planning or management capacity today at the municipal level to supervise or undertake infrastructure development or operations management at any meaningful scale.

Such capacity, as exists to deliver urban services, resides in entities like development authorities and utilities sponsored and overseen by state or central government organisations such as the Indian Railways (which is involved in providing mass transportation of suburban commuters in several cities). This has contributed to systematic failures in co-ordination across a complex web of agencies with overlapping jurisdictions.”

Following the new government’s focus on Smart Cities, such concerns about administrative structure and capacity are increasingly salient.

Under this initiative, much attention has rightly been given to urban forms and frameworks for developing cities, but constitutional and admnistrative structures could impede their smooth implementation.

The government’s Smart Cities Concept Note  cites that “While the urban population is currently around 31% of the total population, it contributes over 60% of India’s GDP. It is projected that urban India will contribute nearly 75% of the national GDP in the next 15 years.”

Despite being the drivers of growth, city administration is fragmented and weak. The 2011 NIPFP “Municipal Finance Matters” report, inter alia, shows that most of our municipalities do not raise sufficient revenues for their cities’ development, and there is wide variation in financial strength of municipalities:



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