Urbanization is on the official agenda in Delhi: build 100 smart cities, and now, revive 500 existing cities. This priority is long overdue: one in three Indians lives in a city. Indeed, experts believe the real number is a higher 52%, if one relaxes India’s tough three-part definition of urban.
Clearly, while policy ignored cities (the Gandhian line of India lives in her villages was the fig leaf), citizens were not part of this false choice. Their journey to cities has been steady and inexorable. For them, cities are a short-code to opportunities. They recognize that a city is a proposition to investors (to create jobs) and to talent (with skills). To investors, cities provide infrastructure, cluster benefits, policies and rule of law that reduce cost and risk of doing business. To talent, it offers vibrant, live-able, inclusive spaces with jobs. So while the government was sleeping, 7,932 towns now dot India. Finally, Delhi realizes that cities must be governed to be productive. So what is the government doing with this priority?
Delhi searches for a definition
Nothing till now. Instead, Delhi appears lost in a futile search for meaning: how to define a smart city? It is no surprise that multiple meetings across ministries have yielded little. First, smart is just a buzzword, in a long line of fads associated with cities. Indeed, globally, smart has already been replaced by resilient or flexible.
Second, experts and consultant definitions reflect their individual skills. The narrowest definition (by technology firms) defines smart as routers, cameras and connectivity, showcasing cities in South Korea and Saudi Arabia. Others focus on eight or 14 or 16 smart levers from spatial design to land use; traffic management to water pricing; green spaces to culture; funding to accounting. With as many versions as experts, Delhi is still confused about what to do and where to start. Maybe there is more clarity if we start with cities?
Cities first seek owners
From a city lens, the definition is obvious. Paradoxically, clarity emerges from the absence of specific city owners who could offer a definition. How can we think of smart cities till we create institutional arrangements to manage our (young) city systems efficiently, deliver better quality of life and renew them for the future? While our urban age has dawned, our urban governance is still in the stone age.
Recent work by Janaagraha confirms we run our cities, among the largest in the world, with an Indian Administrative Service officer (deputed for two-three years), a few babus and many sweepers. Even the brilliant officers among them struggle. Most city-related policies are outside their purview. They have 20-30% of staff they need. They cannot attract specialist skills to develop projects or deliver services or administer municipalities as they pay low and can largely hire from employment exchanges.
With most managers on deputation, they have no pipeline of leaders with experience to promote.
This locks them into a vicious cycle where they are educating officers from revenue or rural or agri-departments, with no knowledge of city management to run a complex city.
And, of course, they have no control over funds while siloed agencies and departments makes integration a nightmare.
Indeed, a small Indian home has a better set-up than our huge cities. Clearly, before we get into city-systems like economic policy and urban planning or transparency and citizen engagement, we need a simple definition of “smart” linked to how to govern our cities, both new and existing.
What smart cities could mean for India
One definition links a structured mandate to mayors who are empowered, accountable to their citizens for reliable service-level agreements (SLAs) delivered by talent. Specifically,
• Structure with clear mandate: Clarify role of a municipality. For the 20 largest cities, create metropolitan structures with regional planning and economic development mandate. Clarify who does what. And then simplify the complex department and parastatals and state government and third-party mix of agencies that run our cities today.
• Mayors: Allow mayors with executive powers and accountability to run our cities. One day, political parties will accept that a mayor is to the city what the sarpanch is to a village—a local leader who makes long-term choices on behalf of the community. That day, mayors will form part of the political cadre, helping groom local leaders (much like the Chinese Communist Party does) and build vote banks in cities. Until then, roll out the mayor-commissioner system that works well in Kolkata (and earlier in Chennai).
• Accountable: Hold this leader accountable. Implement the last two finance commission recommendations on city accounting standards, annual budgeting and book closure calendars, internal and external audits and smart pricing for services. If our cities have to fund $1 trillion in capex and an equivalent amount in opex in the next 20 years, this is a pre-requisite.
• Reliable service delivery arrangements: Commit to deliver a certain quality of life to citizens by corporatizing (not necessarily privatizing) to deliver services at scale: water, waste management, solid waste, public transport, affordable public rental housing. Leverage lessons from BEST, CESC.
• Talent: Create norms for staffing cities, linked to size, work to be done and new technology and processes that increase productivity. Define rules to scope how many of these jobs will be on the municipality books: increase revenue collection teams (they pay back in six months), outsource standard functions (finance, human resources, administration), create a roaming pool of technical experts to design complex projects (transportation models, city planning), automate citizen services (property tax payment, municipal services). Enable right hiring (if required, from private sector) till the much-discussed municipal cadre is built out. Design talent management: clear job description, career planning, performance review and incentives.
This is doable, by a smart politician
Is this possible? Yes. All it needs is a (state or centre) leader or political party to recognize vibrant cities will be increasingly key to jobs and growth and, in turn, to winning in cities. And that this smart way of governance is the start of the journey for Indian cities. Such a leader will need to overcome two barriers: a fear that stronger city leadership implies a weaker state leadership and a (short-term) gap in rents from the current city system. Is there anybody out there who can make this happen?
Ireena Vittal is a former partner at McKinsey and Co.