Even a cursory glance at the Indian urbanscape is enough to convince any visitor that city populations are at the early stages of the ?boiling frog? syndrome. In most cities, decades of neglect have worsened conditions to such a numbing level that people may be unable to jump out for dear life if the need arises. In that context, it is heartening that issues of urban regeneration are again coming to occupy centrestage in discussions on governance and resource management. This is evident from a couple of research studies brought out by the Reserve Bank of India and World Bank this week. The state of urban decay is well known. The studies focus mainly on the financial restraints that keep India?s urban bodies from keeping/making urban spaces liveable. The current scenario is rather bleak, given that the funds at their disposal are even lower than 1% of GDP, and their expenditures account for just about 2% of total state and central government spending. Of these meagre resources, about one-third goes towards administrative expenses, with a pitiful one-tenth going towards capital spending. This is grossly inadequate. But being the realists that these banks are, both reports lay stress on incremental changes, outlining ways to raise revenues and streamline expenditures. The World Bank suggests reforms that would use information flows as a tool to improve community participation and accountability, and to tweak the working of urban local bodies. Yet, none of this would work without tackling weaknesses in the legal framework and incentive inadequacies to secure compliance with rules.
Many of the initiatives detailed in the reports are worth pursuing. Urban local bodies clearly need the kind of capability enhancement that would let them raise and deploy funds as any corporation would. But a priority order is still required for the changes to be pushed through. For local bodies to access modern debt markets, for example, they not only need to bring their internal accounts up to scratch, they need the backing of insolvency statutes that do not exist at the moment. Then, there are also political complications to deal with. State governments are accustomed to usurping the functions and powers of the local bodies, and local leaderships have been unable to stand up to this bullying. In sum, making Indian cities liveable is a monumental challenge. But one that must be met.
