Wake up governments. Most of India lives in her cities

Wake up governments. Most of India lives in her cities

India’s future is decidedly urban. Legacy overhang however is, perhaps subconsciously, contrarian and pulls us in the direction of demonstrably untrue statements such as, ‘India is a rural agrarian country and India lives in villages’.

This provides an opportune moment for us to redefine to measure the ‘urban’ in India and put together authentic relevant data to address important ramifications that we will flag in what follows.

Undercounting urban folk | The official figures available to us via Census 2011 and hence somewhat dated, put India at around 32% urban.

That the official number is a gross underestimate. Scholarly papers using innovative proxies such as night light intensities, amongst other things, have been written on this subject, which have established the fact of severe underestimation. At least two World Bank reports of a decade back, have pegged the estimation of urban India then at already above 60%.

Cities under panchayats | The matter is further attenuated by the fact that the largest growth component within urban space has been the growth of Census towns.

This implies that this part of urban space is still being administered by Panchayati Raj Institutions (PRIs) rather than municipal councils and corporations. This leads to deprivation of large spaces and populations of urban amenities and services. These are enshrined in the 74th Constitutional Amendment Act.

Tax anxiety | This had been a consequence of politicians being averse to declaring a particular habitation as urban, partly encouraged or fostered by a push back from general public at large which is fearful of facing a burden of additional taxes. This clearly is a political economy issue and must be dealt with appropriately.

Misallocation of public funds | All of this would be of passing fancy or a pedantic pastime, were it not for the fact that these have serious consequences that are far reaching. For example, there is a considerable misallocation of resources emanating from rural centrally sponsored schemes (CSSs) such as MGNREGA, NRHM just to mention but two. Needless to say the outcomes of such misallocation of public expenditure does not yield intended outcomes.

Germane to our argument particularly is the segregation of population between urban and rural sectors. Indeed, both the estimation and projections are crucial in providing the basis for design of many policies. Embedded here is the ticklish issue of migration, both inter-state as well as intra-state (rural-urban) migration which must have severe implications for aforesaid projections and estimates.

FCs in a bind | Incidentally and perhaps most importantly, in their awards, the State Finance Commissions (SFCs) as well as Central Finance Commissions (FCs) divide the funds to be devolved, to third tier (ULBs and PRIs) and states respectively in a proportion which largely mimics the estimated urban-rural breakup. If urban is underestimated clearly, the funds flowing to the urban sector will be unfairly diminished naturally to the detriment of optimal management and governance of our cities leading to obvious implications for productive contribution of ‘urban’ sector to GDP.

Underfunding=weakness | It is well established that in India we have weak urban governments. The size of the local urban government is to the tune of one percent of GDP as compared to the international benchmark of 4-6%. The positive reform of the rolling out of GST has had the negative unintended consequence of taking away practically all tax revenue handles from ULBs sans the property tax.

Stagnant urban economy | We started this piece by saying that India’s future is urban, the important subtext being that it will contribute to growth and overwhelmingly to the proportion of the national GDP. The fact that the urban contribution to GDP as a proportion has decelerated and has been stagnant at around 62% is a sure pointer to emerging pain points and reforms that will usher in better urban management and governance.

Grab delimitation opportunity | One of the crucial consequences of defining urban correctly is that in the subsequent delimitation exercise, there will naturally be more representation of MPs and MLAs from urban areas. This will naturally lead the elected representatives to have a buy-in for the urban agenda leading to a shift in the centre of gravity of national concerns as addressed as part of responsive and participative political democracy.

Getting the right measurement and definition of urban requires urgent remedy.

The writers are with Pune International Centre

For more news like this visit TOI. Get all the Latest News, City News, India News, Business News, and Sports News. For Entertainment News, TV News, and Lifestyle Tips visit Etimes