In India, debating the meaning of ‘competitive sub-federalism’
DELHI, India — India’s Economic Survey, a flagship annual report from the Ministry of Finance, is a good marker of the government’s thinking on trends in the country’s economy. Academics, researchers, and policymakers look to the document as much for ideas as for hard economic data.
This year’s Survey, released in January, is of interest to urbanists. It devoted nearly 20 pages to cities.
There’s good reason why. India’s urban population is growing fast, from 220 million in 1991 to closer to 400 million now. Urban Indians now form about one-third of the population — and they produce more than three-fifths of the country’s economic output.
The Survey affirms what urban experts in the country have been saying for a long time, that urbanization will define the trajectory of India’s development, and governance must catch up to meet the challenge.
But it also makes an intriguing call for a new way of thinking among city leaders — which the Survey calls “competitive sub-federalism”.
What does that mean? In simple terms, it’s an analogy to India’s states and the competitive dynamic that already exists between them. The government encourages states to compete with each other for investment and initiating economic reforms, a push that has accelerated under Prime Minister Narendra Modi. In a way, competitive sub-federalism is merely applying that mindset to cities.
Competition is a crucial piece of Modi’s Smart Cities Mission, which has dozens of cities across the country going against each other for a share of government funds. Sixty cities have received funding for a variety of projects, from developing parks to adding transit to providing clean water — the definition of “smart” city is very broad. Cities are expected to leverage the national funds to attract additional public and private investment.
But as with everything in India, the on-the-ground reality is complex. The 74th Amendment to the Indian Constitution, carried out in 1992, sought to devolve power to local administrations, known as “urban local bodies”, or ULBs. A quarter century later, most cities in the country have yet to gain real power. More often than not, the development of a city is heavily dependent on a buy-in from officials at the national and state levels.
Persis Taraporevala, a research associate at the Centre for Policy Research, a prestigious Indian think tank, sees a potential shift going on.
“The economic survey comes from the perspective that cities are engines of growth,” she says. “There is an implied shift here, wherein access to infrastructure and resources for cities depends on their ability to ‘compete’ in a global market.”
The Smart Cities Mission has been showcased as a participatory and inclusive development programme aimed at enhancing the lives and livelihoods of citizens. In reality, however, participation has been uneven and the structures upholding the programme ambiguous. For example, it’s not clear how India’s huge informal sector and large urban populations living in slums factor into the ‘smart’ city plans.
“Capacity building of existing structures of local government is not a strong focus of the Smart Cities Mission,” says Taraporevala. Instead, the focus is on creating alternative administrative bodies called Special Planning Vehicles, or SPVs. Intended to implement the smart-city projects, the SPVs are made up of local, state and potentially private players — and according to Taraporevala, “do not improve existing government structures.”
In an article in India’s Mint newspaper, Jessica Seddon, development expert and managing director of Okapi Research and Advisory, asserts that “’competitive sub-federalism’ involves devolving additional financial powers and resources to municipalities, arming them with additional information, and benchmarking their progress for all to see.” Seddon says that’s an approach that echoes decades of advice from urban scholars, policymakers and supporters.
However, she also notes that it’s unclear how free a hand the national and state governments will give cities to act, particularly when it comes to allocating more resources and authority to local administrations.
The authors of The Economic Survey are aware of the challenges ahead. “It is true but tiresome to repeat that ULBs need to be empowered,” the Survey says. “But the political economy challenges — higher level bodies (state governments) needing to cede power and sharing resources — are daunting.”
Will the Smart Cities Mission be able to resolve its contradictions and support Indian cities to unleash this “competitive sub-federalism”? It’s too early to tell, but Taraporevala says there’s reason to be cautious.
“Competition,” she says, “could make cities more aware of timelines, however it does not assure for quality or content.”