Much hope to transform our unliveable cities to become liveable has surrounded Prime Minister Narendra Modi’s innovative announcement of smart cities. As people waited for cities to suddenly transform to one of their dreams, some Lutyens babus once again tried to dilute the promise of his words. The babus cashed in on confusion surrounding the idea of “smart”, a term that meant different things to different people. The babus have sought to convert the entire idea of smart cities as a means to hand out the functions of a municipal corporation to private parties using various sections of the Municipal Corporation Acts.
In the models proposed by the Lutyens babus, under the smart city banner, municipal corporations and the state governments would hold equity with private parties in a Special Purpose Vehicle (SPV) that would be handed out the entire process of governance of the city. The SPV would be completely autonomous in its functions. The SPV would, therefore, be accountable to its shareholders, not citizens. This process completely sidesteps the entire democratic and tendering process in every municipal function. It even sidesteps various Acts implemented by the municipal corporations, including the Municipal Corporation Act, Regional and Town Planning Act, Urban Preservation of Trees Act and other relevant Acts.
A reading of the Municipal Acts in various states indicates that they cannot possibly intend to replace the Municipal Corporation; at most, sections may allow local authorities to outsource some tasks. There is no provision in the Act to overrule democratic process through transferring responsibilities and requirements of various laws implemented by municipal corporations. In any case, it is unlikely that such a provision, if existing, would be constitutionally valid.
In context of the proposed SPVs designed to make a city “smart”, it is evident that this is not how the idealistic Prime Minister has viewed the restrictions and powers of the Municipal Acts. The interpretation of the babus to delegate the entire role of the corporation to an SPV, with private equity, using sections in the Municipal Acts seems to be a stretch of bureaucratic excess.
The net result, if this arrangement happens, will be to subject citizens to taxation and user charges with no alternatives or affordable options. Like the toll charges that continue to loot citizens forever even while life-time road tax is collected, the SPV will morph into a means to create a perpetual revenue stream to private parties. Just as tolls and privatisation of roads have not resulted in world-class infrastructure, such privatisation of cities will not result in world class infrastructure or services. In fact it will deprive large sections of the city who cannot afford the market rates from even basic access to basic infrastructure or services. Worse still, there will be no democratic process available to citizens to alter the cost, or level of service, or any alternatives to just opt out.
An SPV to be asked to undertake all the functions of the municipal body makes the municipal corporation useless and redundant. However, while the structure of the proposed SPVs is replicating the municipal body, the municipal body is not being scrapped or downsized. In fact, even the taxes of the municipal body are not being cancelled. The citizens would, therefore, pay more to support a parallel organisation that is not accountable to them, but to a limited number of shareholders.
It is not privatisation that would transform the city to make it liveable, it is ensuring that factors reinforcing its decay are checked and those renewing it are enhanced. Unfortunately, the government has no think tank that understands that it deals with dynamic systems. There is, as yet, few government projects that are not burdened with a static view of the world and which show ignorance of the reality that the world is real and not furniture in the living room. The Chennai floods are a small illustration of the dynamics resulting of our own actions with delays and complexities that made the cause and effect unbearable to hundreds of thousands.
Some have justified the proposal for an SPV by citing conflict of interest of elected representatives causing corruption and failure of urban liveability. Which private agency is above conflict of interest and works for public interest? How does an SPV solve the real cause of governance failure: the conflict of interest of those making decisions in municipal corporations? In Indian conditions, the SPVs will only end up entrenching the vested interests and creating a costly monster the country will never be able to put away.
Prime Minister Modi needs to constitute a think tank comprising of those who think long term and understand the systems and dynamics of social and environmental systems so as to create designs for future India, not leave such tasks to babus. He also needs to ensure that babus do not remain a ruling class that sees themselves as those above the citizenry. After all, the failure of the SPVs to make the cities liveable will not be blamed on the babus come 2019, it will be remembered as Prime Minister Modi’s responsibility. The PM and the people deserve better than babu-driven ideas that cut at the root of public accountability and which add a fresh layer of taxes to the already heavily burdened common man.
@AnupamSaraph is a Professor, Future Designer, former governance and IT advisor to former Goa Chief Minister Manohar Parrikar and the Global Agenda Councils of the World Economic Forum. His 100 year models for dynamics of urban centres in India received international awards in 2001. He is also the only person who has worked as the CIO of an Indian city to design its nervous system.