This is not something that our local government bodies would like to read: that they have been capitalising on increases in public land values and natural economic growth through leasing and sales to finance their infrastructure needs, whereas they have been spending less than the nationally-accepted norms for provision of various local public services.
“On average, taking all cities into account, revenue from land lease and/or sales by UDAs (urban development authorities) accounts for nearly 90 per cent of existing own-source revenues of municipal corporations, 33 per cent of their total revenues, but more than 900 per cent of property tax revenues,” write Kala Seetharam Sridhar and A. Venugopala Reddy in ‘State of Urban Services in India’s Cities: Spending and financing’ (www.oup.com).
Looking at the relationship between finances and public service delivery, the authors rue that none of the cities selected in their study spends adequately on local public services in relation to the widely recommended norms for such spending. In the case of labour-intensive services such as sanitation and solid waste management, they observe a direct relationship between finances and service delivery, because services are dependent on wages to personnel to get the work done. “So with respect to these services, if cities are unable to spend, then the quality of services also stands to suffer.”
Cleanliness and data
Do you know, for example, that the per capita waste generation for metropolitan cities is about 500 grams, while for Kolkata it is 626 grams? Or that revenue expenditure per capita in the cities is Rs 189 per annum, while in KMC (Kolkata Municipal Corporation) it is Rs 63 (during 2006-07)? The authors are sceptical though about drawing logical inference from the city’s solid waste collection efficiency of 95 per cent (as compared to the average of 91 per cent for metros), because “it is naïve to assume that cities are as clean as the data indicate.”
There are serious problems with regard to statistics, as the state of municipal data pertaining to revenue and expenditure and their classification are highly unsatisfactory, note Sridhar and Reddy. Unlike state government budgets, municipal budgets do not follow a standard classification system, they add.
“One often observes mixing up of current and capital expenditures/ revenues and many of the sectoral expenditures getting clubbed with that of general administration and vice versa… This has frustrated the efforts of a large number of researchers attempting inter-city comparisons, particularly for large cities.”
Let there be light
As for street lighting, it may be surprising to know that there is a consistent inverse relationship between spending and the physical level of the service in the cities. So much so that even though the cities have been spending below the norms specified, they are able to meet international norms (of a lamp post for every 30 metres)! The authors insist that the standards to be enforced should be more in the nature of actual service delivery and take into account factors such as fixation of lamps and their effective functioning, rather than mere installation of lamp posts.
In Bangalore, for instance, the per capita spending on street lights by the BBMP (Bruhat Bengaluru Mahanagara Palike) amounts to Rs 15 (in 1999-2000 prices) taking into account capital and O&M (Operation & Maintenance) expenditure, the book informs. “The Zakaria Committee specifies a norm of Rs 482 per capita for attaining an acceptable level of street lighting in cities, while the Planning Commission specifies a norm of Rs 345.15.” Taking into account the average road length of 3,500 km in BBMP, the authors compute that the annual average of 1,41,937 street lights translates into 40 per kilometre of road, or one street light for every 25 metres.
Talking of roads, the book cites statistics such as that in class I cities of the country, the average intra-city travel demand is slated to increase from 759 million passenger km per day in 1994 to 2,511 million passenger km per day in 2021; and that between 1981 and 2001, the population in India’s six metros increased 1.89 times, while the number of registered vehicles went up by 7.75 times (Agarwal 2006).
“As of 2005-06, about 60 per cent of freight and 87.4 per cent passenger traffic were carried by the roads. By 2021, nearly 92 per cent of the passengers will be moved by road and rest by rail.”
Solution to problems
In conclusion, the authors aver that irrespective of city size, spending is the essence of the problem in a majority of the core municipal services. Funds must go into public service delivery and not into other spheres of urban development, they urge. Raising revenue may be possible through bonds, provided the municipalities are able to earn acceptable credit rating by improving governance.
Given that the UDAs hold huge amounts of land which they are at liberty to sell and lease commercially, the authors feel that public land leasing and sales can be a good source of revenue, if there are appropriate institutional changes for transfer of resources from UDAs to the cities. “This implies merging of the functions of the UDAs with that of the ULBs (urban local bodies). This is much required for getting rid of overlapping agencies in the case of land use and enabling orderly growth of cities.”
Useful insights for urban planners, authorities, and more importantly the citizens.