Updated: August 1, 2011 23:10 IST

Will de-notifying small towns help?

  • K. C. Sivaramakrishnan
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HOW INDIA’S SMALL TOWNS LIVE (OR DIE): Paromita Shastri; Academic Foundation, 4772-73/23, Bharat Ram Road, Darya Ganj, New Delhi-110002.
Rs. 695.
HOW INDIA’S SMALL TOWNS LIVE (OR DIE): Paromita Shastri; Academic Foundation, 4772-73/23, Bharat Ram Road, Darya Ganj, New Delhi-110002. Rs. 695.

Paromita's book is the outcome of an extensive study of 30 small towns spread over Rajasthan, Odisha (Orissa), Andhra Pradesh, Haryana, Himachal Pradesh, Madhya Pradesh, Chhattisgarh, and Bihar. Though it opens with the lofty question “Will India miss the global bus?”, the focus is on making some sense of financial resources of the small towns. This is a useful contribution, considering that not much data are available on the subject and, worse, that precious little has come out by way of an analytical study. But the book does not address the role the small towns play in India's urbanisation or the question of how they relate to the urban morphology of the country.

With municipal finances as the central theme, Paromita discusses how the civic bodies of small towns generate resources and how effective are they in spending the money. On the 74th Constitution Amendment, the author rightly concludes that, in spite of the statute change, the functional domain of the urban local bodies remains grey and that the linkage between that domain and the fiscal situation defies clarity.


The chapter on the State Finance Commissions (SFCs), which takes a look at their composition, the scope of their reports and the fate of their recommendations, clearly brings out the striking contrast in the functioning of the SFCs and the Central Finance Commissions, thanks to the formers' weaknesses and deficiencies. Particularly useful is the discussion on the recommendations of the 12th Finance Commission on improving the working of the SFCs. What the more recent 13th Commission has said about the local bodies was obviously not available when the book came to be written.

The handicaps the smaller municipal bodies suffer right from their ‘birth' are dealt with elaborately. The revenue-expenditure data of these local bodies make a dismal reading. Going by the figures, the average revenue of the towns covered in the study was Rs. 200 per capita, while the money spent on establishment alone was around Rs. 250 per capita. The author argues that small towns were really a drag on the financial health of municipalities at the national level.

There is also a detailed discussion on the Government of India's flagship programme, Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Although the so-called reform agenda under the Mission relates to the big towns, the components are the same for the small towns as well. As part of the urban renewal effort, a special programme has been in operation for a long time, going by the name Integrated Development of Small and Medium Towns (IDSMT). Now this is being continued, with some changes in its nomenclature, as part of the JNNURM. Sadly, the book makes no attempt to analyse the impact of the IDSMT on small town's functions or finances.

In the end, the reader is confronted with a basic question. If the financial health of India's small towns is so pathetic, is there a need at all to keep them alive under an elaborate municipal shell? The 2011 census identified as many as 2,532 settlements that fulfilled the demographic and other criteria to qualify as ‘Census Towns'. Which, among them, are in the periphery of ‘cities' and which are the ones that have moved from the ‘rural' to ‘urban' category will be known when reports based on disaggregated census data are made available.


There is no particular virtue in claiming that India has a large number of towns. Given the fervour and passion with which such statements as ‘India lives in villages' and ‘India is rural' are made in political and societal arenas — and repeated in the manner of a religious incantation — perhaps one should consider de-notifying the ‘small towns' and bringing them into the fold of the ‘panchayats.' This way, they would get at least enough resources to keep them going, thanks to the comparatively liberal devolution of funds under the Panchayati Raj and Rural Development Ministries. Paromita's book, one hopes, will provoke some thinking in this regard.

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