THERE was a time, not so long ago, sometime in the 1970s and ’80s when – partially out of a sense of pride, and partly with a sense of despair – it was de rigueur to say that India lived in its villages. Now suddenly, over the last couple of decades, it has become proper to declare that India is rapidly urbanizing. However, it must be admitted that this is most often accompanied by a shudder of horror at the state of our towns and cities. So what exactly is the ‘problem’ and where does this dichotomous perspective emerge from?

Partly, it is the millions of people involved. According to the Census of 2011, the urban population now accounts for 31.6% of the population, or 377.11 million. Just to put matters in perspective, that is more than the entire population of any other country of the world, with the exception of China (and these two Asian giants between them have more than one-third of the world’s people)! The urban population in India jumped by about one-third in the last decade (2001-2011) and while the number of million-plus cities expanded from 35 to 53, the number of towns has also dramatically leapt from 5161 to 7937.

This increase in urban population was not only welcomed but also promoted by planners in the 1990s, for the simple reason that agriculture and allied sectors accounted for less than 20% of GDP while employing about 60% of the workforce. So naturally, for those concerned with ‘growth’ (and only with growth – the new fetish of this century), it was imperative that people move from uneconomic rural occupations to highly productive urban ones. So what really scares the planners, thus accounting for the ‘shudder’, may not be the millions of people, but the millions of rupees involved and where the money will come from.

The latest in a series of committees, the High Powered Expert Committee under the chairpersonship of Isher Judge Ahluwalia, has estimated that urban infrastructure will require an investment of about Rs 39 lakh crore on eight services at 2009-10 prices for the fresh urban population during the next 20 years, not for the backlog. This, mind you, does not include the cost of primary education, primary health, and electricity distribution, or of land. A little over half of this amount will be dedicated to the construction of urban roads and for urban transport – a clear indicator of the manner in which planners envision our cities will ‘grow’ and their dependence on high energy inputs.

An additional twenty lakh crore rupees will be required for the operation and maintenance of assets – both old and new. Several economists, of course, consider these figures to be underestimates. But before one gets into the nitty-gritty of that argument, it might be worthwhile to look at the HPEC’s recommendations for a sense of how these enormous financial investments will reach the urban areas. The focus, it seems, will be on ‘building capacity at all levels of government’ that is to be linked to a specific programme of ‘development and reform’ and by ‘leveraging private sources’ for funding via the PPP (public-private partnership) route. In other words, one will have to go deeper into concepts of ‘governance’, ‘reforms’, and ‘partnerships’.

 

For instance, good governance in an earlier era, whose vestiges lasted well into the 1990s, was related to the ability of India’s millions to participate in the grand experiment of democracy, to make their voices heard so that their needs could be met. Now it has been linked to the efficiency of urban local bodies to balance their books and make profits, at the least break even. Reforms meant those measures that were designed to take land from the rich and make it available to the poor, before it began to imply that land would be ‘freed’ for the market. And partnerships were with the people, not with corporations. But these are the dichotomies that weave in and out of modern public discourse.

Take, for example, the vision of the Planning Commission. In its midterm appraisal (MTA) of the 11th plan, the commission said that its aim to achieve an average growth rate of 9% per annum, with 8.5% in the first year and 10% in the last year, was belied as the over 9% growth achieved in the first year was interrupted in 2008-09 because of the global financial crisis. The commission, however, maintains that the nation was able to achieve a ‘better performance’ mainly because India’s financial system was not exposed to ‘toxic’ assets in the international market; the growth in demand was predominantly from the domestic market; and the level of private savings remained high while there were improvements in public savings.

 

Presumably, such an assessment would lead planners to promote those factors which contributed to the growth in the economy even during a global crisis, such as protection from international forces, and encouraging domestic consumption and savings. Yet, the Planning Commission based its expectation of an economic revival on promoting investments, mainly in the entrepreneurial private sector, with high investment in infrastructure through PPPs, and long-term capital flows through Foreign Direct Investment and ‘investor friendly’ economic policies. This, the commission felt, would reduce urban poverty by 10% points (although it changed by only 6% points in the ten years between 1994 and 2004).

In other words, the commission remained intent on pursuing more ‘reforms’, opening up the financial system to the international markets (FDI) and private firms (PPP), and depending upon private investment – even though the MTA admitted that there had been an investment deficit, the ‘real impact of completed reforms on the ground is unclear’, and the progress in empowering Urban Local Bodies for governance ‘fell far below expectations.’ Nevertheless, similar policies were advocated not only for urban development, but also shelter, transport, sanitation, and livelihoods.

The subsequent approach paper to the 12th plan suggested the same set of policies as ‘challenges’ to be met through proper planning. These included enhancing the capacity for growth, making growth inclusive, improving the quality of public services, responding to migration, and depending on markets for efficiency. The commission refused to acknowledge that perhaps ‘growth’ itself was responsible for excluding the poor from the reach of markets (which are engaged in profit, not welfare), that there was little or no ability pay for goods, and that growth does not ‘trickle down’. And though many voices pleaded with the commission to bring employment to the centre-stage of urban planning, the planners persisted with their dichotomous view.

 

This dichotomy was doubly on display when, in 2011, the Ministry of Urban Development commissioned Grant Thornton, described as heading ‘one of the world’s leading organizations of independently owned and managed accounting and consulting firms ... providing assurance, tax and specialist advisory services’ – which should give a clue as to how the ministry perceives ‘urban development’ – to conduct a midterm review of its flagship programme, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The mission began in 2005 with a proposal to invest 1.5 lakh crore rupees in 63 cities over seven years and the ministry has already announced that the basic concept will be applied across all towns and cities.

What were these basic concepts? They were to facilitate the planned development of urban infrastructure in a manner that would ensure that asset creation would be sustained through asset management. In other words, those infrastructural needs would be met on a priority basis whose financial returns would be adequate to maintain them in the future. For this purpose, at the time of the review of the JNURM in the 6th year, almost Rs 80,000 crore had been approved, of which over half had been committed by the government for 1334 projects of which 268 had been completed in 23 cities and 132 towns. All this, of course, was in the context of a set of reforms in land and rent laws, e-governance and record keeping, promoting PPPs, and enactment of public disclosure and participation laws – of which, it was claimed, that 78% had been completed.

 

Grant Thornton, on the other hand, reported that there was lack of a ‘holistic’ approach in the city development plans since they did not address transport, social infrastructure, and financial requirements together. There was a paucity of land and funds at the local body level, suitable contractors were not available, and staffing constraints created ambiguities and bottlenecks. So, Grant Thornton recommended that the central and state governments negotiate for imposing penalties for not completing reforms, set up a special window for financing PPP projects, and ensure an even stronger focus on building capacity to implement reforms. This was an accountant’s hack job. There was not a single word about how the mission had impacted upon the lives of the citizens.

That task had been taken up earlier in 2009 by an alliance of citizens’ groups, through participatory data collection and research in 42 of the initial 63 JNNURM cities, ranging from a set as diverse as Mysore and Vijaywada, Ajmer and Bodhgaya, Agra and Guwahati, to examine the infrastructural and housing investments and their impact on the urban poor. In their summary, the participants noted that there was a complete absence of analysis in the city development plans (prepared by consultants) with respect to existing demography, economic basis, financial profiles, and the role of the private sector in providing infrastructure. The actual projects taken up on the ground rarely matched what was given in these plans, even as there was great resistance to the reforms by many municipalities.

 

The participants further found that there had been an erosion of democratic processes, with norms and benchmarks being set to favour private corporations, the role of representation being changed to selective consultation, no convergence between the city plans and people’s needs of livelihoods, and the expenses of working class households systematically increasing while incomes decreased. Further, evictions from slums had taken place on a large scale and a new ‘city’ of the poor was being created outside the inner city while the vacated land was being used for highly profitable commercial purposes. In addition, PPPs were being promoted in a manner such that the profits went to the private sector while the public sector covered the risks.

They, therefore, recommended that a critical analysis of past planning exercises was necessary to provide the context within which the performance of the mission could be reviewed. For them the needs of the most vulnerable, not funding, should be the focus for the development of the city. Hence, they suggested that the mission lay down clear rules for convergence with schemes and plans for promoting urban livelihoods, public transport, and neighbourhood housing. In all this, they demanded public participation through the implementation of the 74th amendment to the Constitution rather than ad hoc consultations. As expected, there is a stark dichotomy between these recommendations by citizens’ groups and those of expert bodies and consultants. But what did the Ministry of Urban Development do when faced with the contradiction?

 

In a presentation made in early 2012, the ministry listed its ‘learnings’. Some of these were: giving adequate time for planning so that the outcome is more ‘comprehensive’; identifying enough land for projects before finalizing them; providing funds and clearances on time; standardizing procedures for work orders; overcoming capacity ‘deficits’ in urban management, finance, accounting, information technology, engineering etc; hiring more ‘professionals’ at the municipal level; and, once again, linking funding to reforms, particularly in making cities more ‘investor-friendly’ through the PPP route. Thus, the ministry had clearly decided to take a partisan position by ignoring the host of challenges that were being posed by many institutions and organizations who had been closely monitoring the mission since its inception.

It is almost as if there is a ‘reforms mania’ within policy makers and bureaucrats which, in a spectacularly brazen, almost Shylockian fashion, can see nothing beyond financial numbers for investment and how to obtain as well as recover that money. This is a banker’s perspective, not that of an urban planner, who should be concerned with the dignity of people’s lives rather than their financial viability. But this is what is being taught internationally in schools of planning and urban management. Somewhere, modern day professionals have lost sight of the larger reality of how working people live and create the GDP that they worship from their towers of air-conditioned steel, chrome and glass. It is this dichotomy that has to be addressed and overcome, if some measure of reality has to re-enter public discussion and debate.

What better place to begin than the whole area of PPPs, wherein the public (read ‘government’) is expected to partner with the private (meaning the profit making ‘firm’) to ensure the welfare of the people (who, of course, do not figure in the partnership at all)? In a fascinating review of the trends in private sector participation in the water sector in India, the Water and Sanitation Programme, a multi-donor ‘partnership’ (of another kind) administered by the World Bank (who, after all, are bankers), has observed how the nature of PPPs in this sector has been changing over time to accommodate the interests of private investors. Water PPPs have increased substantially since 2005, with the earlier initiatives being in the southern states, and then spreading to the rest of the country.

 

Why did this change take place? As the WSP study observes, ‘The availability of public funding under schemes such as JNNURM has enabled a wider cross-section of states and cities to initiate projects on their own’ and ‘the appraisal process under the (JNNURM) programme encourages PPP-based projects.’ Two-thirds of the later ‘successful’ awards of PPPs were for operation and maintenance improvements of the distribution system, and not for augmentation of bulk water supply systems. During the 1990s, the trend was primarily Build Operate Transfer with 100% private financing. But these failed to provide adequate returns to the private financiers, and so a majority of the projects since 2000 involved management contracts, with the public sector providing most (60-70%) of the investment and a greatly reduced role for multilateral funding agencies and international contractors.

 

The growth of the domestic private sector, which has a limited provincial presence in the distribution of public water supply, is one of the more striking features of this ‘success’ story. In the international sector, there has also been a shift from European firms who have been interested in the Indian water supply PPP market to South East Asian water supply utilities. According to the WSP, these trends mirror those observed in other developing countries, with increased public funding, fewer full concessions, and a growing presence of domestic operators. Consequently, the WSP recommends that in spite of crucial constraints (‘lack of stakeholder support’, ‘weak financial and technical capacity’), the PPP mode be pushed forward at the sectoral level rather than the project level.

What does this convoluted gobbledegook really mean? Shorn of the verbiage, it reveals that private firms in India have realized that there are rich pickings to be made in the PPP model because it does not require them to lock in large amounts of money into low paying infrastructure; that government funds are readily available; heavy subsidies for land and energy are also negotiable; safeguards are provided against losses if customers do not pay; there is a consumer-led demand for better services which can be used to improve their bargaining power; and there is a cleverly designed propaganda machine at work to recognize their ‘high risk taking appetite, and the ability to manage their costs better’ – as approvingly cited by the WSP study. This trend cuts across a range of PPPs in all sectors other than water. It has nothing to do with actually providing a better deal to the people of India.

Clearly, therefore, the transformation of the cityscape has much to do with the transformation of the mindscape, to ignore the dichotomies that must, of necessity, exist in a deeply polarized society. While urban growth moves along briskly at over 8%, urban poverty deepens in ever more widening circles. The only way to mask the contradiction is to grandly declare from the relatively safe confines of Yojana Bhavan that the urban poor can get along very well on a daily dose of Rs 20 per day. The roads in all towns are choked with private cars even though the number of car owners has never crossed 12% of the urban population. So the solution is to draft a ‘people centred’ National Urban Transport Policy that proposes equitable distribution of road space. But then, the real ‘people’ (who are pedestrians and cyclists) can be conveniently avoided by inviting all the ‘concerned stakeholders’ for a ‘consultation’ at a venue where only cars can reach.

 

Water, sanitation, electricity, transport, livelihoods, education, health: all are under severe strain in our urban centres. Everyone recognizes that this is not because of a shortage in supply, because there are visibly privileged areas in all these towns and cities where lives of luxury are led by those who have the money and the power. So the PPP model is deliberately manufactured under the pretence that the private sector’s ‘efficiency’ (in making profits) will ensure that even those who cannot afford the service will now be able to get it.

This is like the fabled ‘Andher Nagari Chaupat Raja’ in reverse. There will be no one hungry in our cities any more because food will be free (well, almost). Except that now your fat will not be in the fire if you happen to eat too much of the despot’s handouts!