Updated: September 23, 2010 16:05 IST

Case for improving the urban services

P. K. Doraiswamy
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This book makes out a case for tapping the potential of land, either by lease or outright sale, as a means of financing urban infrastructure and public services.

The proportion of urban population in India grew from 11 per cent in 1901 to 29 per cent in 2001. What urbanisation has meant for the people's quality of life is clear from these data: 20 per cent of the country's population has no access to safe drinking water; 58 per cent lacks safe sanitary facilities; and over 40 per cent of the garbage generated is left uncollected.

The book is based on a study of the correlation between the financing and delivery of urban services, including water supply, sewerage, street lighting, and solid waste management, and the cities covered are Ahmedabad, Kolkata, Jaipur, and Bangalore.

In Ahmedabad, the money spent on water supply, sewerage, and street-lighting is lower than the national average, but the level of delivery is higher. The case of Kolkata is somewhat different. There seems to be a correlation between the low level of spending and poor delivery of service in respect of water supply, sewerage, and solid waste management. Interestingly, the standard of street-lighting is acceptable, although the level of spending is low. And the situation is not very different in Jaipur and Bangalore.

Revise spending norms

The broad picture that emerges therefore is that, except in Ahmedabad, there appears to be a distinct correlation between the level of spending and quality of service in many areas. If the equation between the two is reversed in respect of street-lighting, it only suggests that the spending norms need to be revised. Most cities are spending less than the nationally prescribed norms and providing less-than-satisfactory level of service. As for roads, it is conjectured (without any empirical evidence) that such a link exists uniformly in all urban local bodies (ULBs). Hence the need to boost the ULBs' resources. The authors suggest that, apart from allowing the ULBs to float bonds in the market, they could be given a share in the revenues the urban development authorities get by way of developing or selling the land in the cities.


The findings of the study, although by no means a revelation, are quite relevant. That the ULBs do not have enough money to maintain the services properly even at the existing level — let alone upgrading them to keep pace with the needs of a growing population and development imperatives — is common knowledge. The yawning gap between public expenditure and the efficiency and effectiveness of such spending is also well known.

Floating of bonds appears an easy way out. The critical issue relates to its repayment. Will the ULBs be able to do it from out of their earnings? If they cannot, the burden will shift to the government. When there is little political will to collect user chargers even at reasonable rates and there is considerable consumer resistance to such levies, one wonders how revenue surpluses are going to be generated for clearing the debt. The urban development authorities will have to acquire, develop, and sell lands and keep the money rotating so as to carry on the cyclical process. They are unlikely to be left with anything substantial by way of surplus — after meeting their own operational and administrative costs — to dole out to the ULBs. Above all, there is the growing public protest to the very idea of compulsory land acquisition to reckon with. Inexplicably, the book makes no reference to the role of HUDCO in funding urban development.

That the book is the outcome of painstaking effort can be readily conceded. Its usefulness from the practical and operational standpoints is, however, limited.

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