ECONFINITY ENGAGE #1: All about Urban Affairs

In conversation with

Naim Keruwala, Urban Economist

In the first issue of Econfinity Engage, Pavan Kumar and Anandita Das sat down for a chat with  Mr Naim Keruwala, an urban economist currently working as Program Coordinator & Team Lead – CITIIS at the National Institute of Urban Affairs, New Delhi. They discussed the situation of urban affairs in India and related aspects like local level governance and financing which become all the more important in the context of a growing population and consequent urbanisation. 

Mr Keruwala, you hail from Gujarat and there has been much talk about the Gujarat Model. What is it exactly and why is it that there is so much talk about it?

Gujarat does not have a unique urban model in particular rather its an amalgamation of varied practices built over a period of time. For instance, it was among the first states to focus on municipal finance management. With almost 113 municipal corporations, it has had a head start in not just pioneering municipal finance but also standardized budgeting practices of municipal corporations.

In addition, given its penchant for business and enterprising nature of its citizens, it has managed to bring about a unique public-private partnership model which is worthy of appreciation. For instance, in Ahmedabad, the renowned dairy giant AMUL was roped-in by the municipal corporation to develop public parks in return for their shops to be established within the premises. In short, the people would visit the parks which were well maintained by AMUL and in return the company received brand recognition as well as prominent places to sell its products. As is evident, it creates a win-win situation for the people, the municipal corporation as well as the private player.

Another example from Gujarat is Ahmedabad Municipal Corporation that undertook a massive land-record digitization program through land mapping which ensures there is the full record of who owns how much land and where. This eases many issues that are often associated with land acquisition in other major urban centres in the rest of India. Such an initiative is yet again worthy of note. 

There happens to be a world of difference in terms of urban development and development in overall terms in the West and the East of India. What would you attribute this to, in light of how Tatas had to relocate to Gujarat after being denied land in Singur for Nano manufacturing plant?

This has to be looked at from a different lens. Urbanisation without a doubt is a driver of economic growth and development but the question is development for whom? Is it a fair play or is it making some worse off? For instance in Niyamgiri in Odisha, the locals prevent development on account of them fearing losing out on the forest life, their culture and all things sacred to them. A similar sentiment is observed in other parts of Eastern India. That however does not mean they are anti-development which generally is made to portray; Kolkata was the first city in the country to have a metro train system. What is required is more of a co-construction model than a prescriptive approach. The co-construction, participatory approaches may-be time-consuming but promises stronger public-confidence and hence better acceptance and sustainability of public projects.

Gujarat on the other hand has a long tradition of successful business and trade focussed cities, starting from Lothal in the ancient times to contemporary Ahmedabad and Surat among others. Gujarat has also been a melting-pot of cultures since a long time. The Parsis from modern-day India, the Bohris from the Middle-East and the Sidis from Africa settled in Gujarat and adopted the Gujarati language. Thus one has to look at the historical context in which both the regions developed over some time to understand the difference. This is my very preliminary understanding of the issue and needs much thorough research to answer this question. 

Given we have covered some interesting aspects already, we would like to ask you what is the single biggest challenge there is for urbanisation?

There is no ‘single’ urban challenge; it has a multi-fold, multi-dimensional aspect to urbanization in India. However, if I were to absolutely choose one issue,; the biggest challenge would be building institutional capabilities. What does that mean?  The institutional mechanism has to be robust enough to not just frame policies but implements them without any hassles. Lack of adequate and appropriate staff is the achilles heel of building better cities in India. It’s fashionable to say we need tech-driven governance, emphasis on tech is something nobody can disagree with but is the institutional capacity matching it? Technology is the easiest part; fixing Humans is the tricky part.

Mr Keruwala, we know India’s strength is its informal sector which employs nearly 80% of the people in various ways. Their growth too is organic and not defined in any particular sense. And they predominantly operate in urban and semi-urban areas, but there is no space for them in the policy framework. Given the vast informality and failed attempts at formalising them through a plethora of regulations, is there a persistent disconnect? 

Without a doubt. There’s hardly any focus at all on the urban informal sector. The contribution of the informal sector for instance has been immense during the covid lockdown; be it mask manufacturing or grocery services or food delivery, the informal sector has been the panacea. Yet there is no particular policy that addresses their concerns; on the contrary, there has been a patronizing approach by erecting fancy buildings set in the edge of the city for having shops for hawkers and others where the business activity is  much lower than at the heart of the city. This is a classic case of not engaging with the stakeholders while designing a project that affects them the most.

It thus boils down to understanding what makes any policy effective – Cost and Convenience. The cost of adapting to the new norms should be affordable and the convenience must be high for not only compliance but further engagement. If neither exists or the approach is skewed, the policy is merely a paperwork thing and becomes unsustainable.

What other challenges do you see panning out in urban areas? Many schemes are launched but fail to take off. What can be the reason?

Mere pumping of money is not enough; what is the outcome? Is the problem targeted at resolved? That has to be the focus. An anecdote I can give is regarding the Swachh Bharat Mission which has been launched with all the right intentions. No one in their right frame of mind can oppose a mission like the Swachh Bharat Mission. A couple of years ago, I visited a small town in Odisha and the people complained that they were not able to fully benefit from Swachh Bharat Mission because the toilets were built but the town did not have an underground sewer system. Our urban missions need better convergence, we need to ensure better underground sewer connection before building toilets to ensure the infrastructure built is actually utilized. Unfortunately, when programs function in Silos and the pressure to yield results is high, we often compromise on quality, usability and sustainability.  

Another crucial aspect is decentralisation in design and implementation of urban projects; providing a platform for direct democracy in certain aspects of local governance. As renowned Economist, Wallace E Oates noted “If there are no cost advantages from centralised provision, there will be significant welfare gains from decentralisation in service delivery as it caters to diversified preferences.”

                                                                                                                                                                                                    Mr Keruwala, now that we have covered quite a lot of ground on the problem areas and understood what can be the ways and means to solve them, what are the upcoming opportunities for cities?

India is a land of opportunities! That’s a given. If one notices, megacities are now driving the service sector and manufacturing is shifting to the suburbs and census towns and so on. Thus, manufacturing is now occurring in smaller cities which will enable skilled and semi-skilled labour in such towns to get employment.  Opportunities thus have to be identified in terms of regions and their strengths. This trend also provides economies of scale for the manufacturers and goes on to create growth clusters with each city cluster having its  speciality. A case in point is the Surat diamond cluster, Faizabad’s glass-making industry etc.

I also believe that the distinction between urban and rural must be done away with given there is not much of a difference between the two now and information is available everywhere. Such a change would be welcome by enabling a ‘cluster-based’ approach to be more plausible for implementation.

Sir, with regards to the clustered approach, there seems to be a very different take on my end. Andhra Pradesh upon division decided on Amaravati as its capital but presented a detailed plan with each district becoming a hub for some industry or the other. This, however, failed to take off due to change in political leadership post-2019 elections. How do you see this? Should not consistency be a norm w.r.t such important issues?

Political aspirations and actions impact economic growth and planning in ways more than one. You cannot de-link the political process and economic development and they are not mutually exclusive. Hence the focus has to be consensus-based policy making. Political maturity has to come about to ensure consistency in policy because there will be a gestation period for any policy to show detailed results. If things change as fast as governments change, progress could be derailed. We can also take some cues from the Netherlands that has become well versed coalition politics.

In recent times, metro rail and mass rapid transit has become a hot topic with many Indian cities opting for such large scale public infrastructure projects with private players coming in. In this context, how do you view Transit Oriented Development (TOD)?

T.O.D as a concept has a lot of potential in a country like India and I am of the view that it has to be scaled up in other urban centres too. It is a very good way to balance public and private development of transit corridors. So, all in all, it’s good progress that we are making when we see cities taking it up as the concept has a wide scope in the application. 

Indeed, sir. Before we wind up there’s a question regarding the financing of Urban Local Bodies. Is there any way to reduce their dependence on the state governments and make them financially strong? What is your take on the current situation and what is the proposed policy change from your end?

Let us first get it very clear. Its urban local governance and not just management. So to enable effective governance we have to do away with the current top-bottom approach where the decisions are made and replace it or restructure it with a bottom-top approach. As regards to financing, there’s a high level of dependence as on date on National / State Government finances. Most municipal bodies end up seeking funds for the majority of their  capital works rather than improving their own source revenue. We need to re-open the chapters of Charles Correa headed National Commission for Urbanisation, 1988 reports which was a precursor to the 74th Constitutional Amendment and start a dialogue for another National Commission on Urbanization that looks at contemporary changes required today.

We conclude this session with this question: How to ensure the proactive role of citizens in urban planning and management. Secondly how to bring the shift back to urban development, given the excessive movement of cities for livelihood?

Awareness and Enforcement are two sides of the side coin. We need to make people aware of their rights and responsibility as a citizen; and also enforce rules that ensure safety, security, and livability of all citizens. Over the years, we have reduced ourselves to mere economic contributors rather than citizens. People often think the Government is a service-provider and their taxes (direct/indirect) are fees for those services; and hence the Government is no different from Vodafone, Airtel, Reliance, or any other company. This is flawed thinking which often results in complete disregard for public goods. We need to imbibe the concept of Citizenship which is often missing. Be a productive economic contributor but also be a good Citizen. 

This article is drafted by Pavan Thimmavajjala and Anandita Das.