Delhi: A city government that it deserves?

We must wonder about Joseph de Maistre’s conclusion in 1811 that “every nation has the government it deserves!” There just has been too much evidence of bad governance this past two years for comfort. Government is multi-layered and the evidence that is piling up on the streets of Delhi indicates problems at all levels, national, state and local. Are we so cursed a nation that we cannot get even a modicum of good government at any level?

Delhi is a classic example of failure of government. In the last two decades from being a capital representative of a modern India, Delhi has become a gigantic urban mess with dirt and disease its defining characteristics. It is now a city without government. Those who have power are not chosen by the people. Those who are chosen have no power.

The AAP chosen to govern is caught in a vice between the jaws of the BJP controlling the central and local governments. The AAP state government has no more power than a Parents Teachers Association or a Residents Welfare Association. All the political parties know this. That is why all of them even now expressly state in their manifestos that Delhi must have full statehood. But when in power both the Congress and BJP have preferred to extract from it rather than give it a government it deserves. The BJP is now in power where it matters but it denies Delhi the government it needs.

We have a birth to death relationship with our municipalities without whose registration of births we may not exist, and without whose death certificate we run the risk of becoming immortal. But what we need to be concerned is about the relationship we have with this tier of government through our lifetime. The Twelfth Schedule to Part IX of the Constitution of India (Article 243W) added through 74th Amendment Act provides an illustrative and rather exhaustive list of municipal functions.

The paradox of the population accretion into urban areas is that the major expansion begins at the lowest economic strata with economic refugees pouring into the cities. As per census estimates, India’s urban population has grown from 290 million in 2001 to 377 million in 2011; accounting for over 30% of the country’s population. Urban India accounted for 62 to 63% of the country’s GDP in 2009-10. By 2050 India will have almost a billion people living in urban areas and less than 700 million living in rural areas. That is the kind of swing that is under way. Clearly management of urban areas is now a major national priority.

Because of their dense population and breakdown of traditional hierarchies that ensured a degree of conformal behaviour, urban areas are highly volatile and can bring about social and political destabilisation rather suddenly and quickly. India is entering a dangerous phase. Delhi must show the way.

The erstwhile Municipal Corporation of Delhi (MCD) that governed 8 of the 11 Districts of Delhi was among the largest municipal bodies in the world, providing civic services to an estimated population of over 11 million citizens in the capital city. It covered an area of 1,397.3 km² (539.5 mi²). In 2012 the MCD was divided into three, for what many believe was essentially for political reasons by the Congress governments at the centre and the state to gerrymander its way back to power. It didn't work and for 14 long years at a stretch, the BJP has kept control of them.

But the three new MCD’s are socially and economically very different. South Delhi has the most affluent areas and hence its vast property tax base is now no longer available to the less fortunate North and East area corporations. The other two are dependent on handouts from an increasingly assertive state government, which insists on knowing how the money given is utilised.

Delhi’s municipalities are notorious for their corrupt ways and sloth. A drive around Delhi will give you a good idea how badly the city is managed with rampant unauthorised constructions and occupation of public spaces. Delhi practically has no pavements any more for pedestrians. What is not taken over for commerce is taken over as informal urinals. And what choice do people have anyway? The area under the MCDs and NDMC require almost 45,000 public conveniences, but don't even have a small fraction of that. To compound matters, 18.4% of Delhi homes do not have toilets, which means most open spaces and public spaces are dumping grounds—literally. But the corporations are clearly financially strapped.

East Delhi Standing Committee chairperson BB Tyagi lays out his corporation’s predicament clearly: “Our monthly expenditure is around ₹100 crores. This amounts to ₹1,200 crores annually. The revenue generated every year, however, is just ₹700-750 crores.” Tyagi adds: “There are around 5-6 lakh properties, of which a little over 2 lakh properties pay tax. Moreover, there are at least 30 unauthorised colonies in this zone and we do not collect any property tax from these areas.” But collection of taxes from these properties is going to be politically unpopular, and no elected government courts unpopularity even if it is for better government.

The North Municipal Corporation generates nearly ₹1,400 crore in revenue annually; its annual expenditure is over ₹2,100-2,200 crore—a gap of nearly ₹7-800 crore. The revenue and expenditure mismatch is obvious. In addition to their primary civic duties the three MCDs are saddled with 715 schools with 3.5 lakh children and five hospitals. Half of their expenditures are on health and education. Clearly they are left with nothing for capital expenditures. Hence the corporations have to depend on handouts. But the hand that gives will always insist on knowing how the money was spent?

In shining contrast to the three corporations sliced out from the erstwhile MCD, the NDMC territory comprising of Lutyens Delhi, the abodes and workplaces of the high and mighty, most of Delhi’s five-star hotels, market places and office buildings, all situated in a golden area of about 43 square km, is a symbol of financial stability and plenty. It had a surplus of ₹335.4 crore last year.

Clearly the corporations cannot cope with meeting the civic needs of its citizens and their revenue bases. One way to make the spread of money more even and to ensure distributive justice would be to merge all the corporations into one big unit where the revenues can be spread evenly. It cannot be argued that the success of NDMC areas is because of spends by local residents only. All the people of Delhi make the NDMC areas tony with their patronage and taxes. The other way of dealing with this would be to shear the MCD’s lists of responsibilities significantly.

Why should the corporations run schools and hospitals when the Delhi government too does that? These can be transferred to the state government. The corporations should be tasked only with urban management and civic services. Many of the civic services that the corporations provide are very basic, but it is a high cost operation for them because of the government pay structure. These can be outsourced to contractors whose wage structures are infinitely low. The corporations should be asked to give Ways and Means financial projections for the next few years now, before seeking new funds.

Clearly this will involve conflicts between the political players who will fight to either protect or extend their turfs. That's where the national leadership has a role. It should travel the high road and seek solutions for our problems rather than piling them up. Like the overflowing garbage tells us. This is the time for Prime Minister Modi to act. He promised us better government and less government. This is the place to start.

A longer version of this article first appeared on the author’s Facebook wall on Sunday, February 5, 2017

Mohan Guruswamy is Chairman and Founder of the Centre for Policy Alternatives, New Delhi and former Economic Advisor to the Vajpayee Government. He tweets at @mohanguruswamy