Learn from Detroit!!

Fiscal mismanagement and lack of autonomy form a lethal mix poisoning Indian cities too…

Detroit has become the largest city to ever go broke in the US. Why? Because it’s industrial base withered in the face of global competition, and as the number of jobs dwindled so did the city’s population. Indian parallels are not self-evident, because with our population becoming increasingly urbanised, with even tier 2 and tier 3 cities becoming vibrant centres of job creation, one could argue that Indian cities have never had it so good. Unfortunately even a cursory look around shatters all complacency.

Instead of celebrating the monsoon we are cursing flooded streets, clogged drains and short circuits. The resulting traffic jams seem an apt metaphor for infrastructural shortfalls clogging up opportunities in our cities. From Bangalore to Goa, Kolkata to Bhopal, a toxic mix of mismanagement and lack of autonomy is driving all but a handful of Indian cities to the brink of disaster. With shoddy revenue generation falling short of targets, even essential development work never gets commissioned. Sometimes state governments step in to meet budgetary shortfalls, but this means better fiscal management is placed on the back burner.

To illustrate, Mumbai’s gargantuan budget isn’t backed by detailed financial statements. So inefficiency and corruption rule the roost. India’s urban population is forecast to double by 2031 as compared to 2001, which demands a matching increase in civic bodies’ ability to deliver services and also collect property tax dues or user charges for, say, water or sanitation. But rural-centric politicians are resisting urban autonomy. India’s FSI may be around the lowest in the world, artificially inflating real estate prices, yet its city mayors can do little about this.

The key lesson from Detroit’s bankruptcy is that unless we empower local authorities to adapt urban landscapes to a fast-changing globalised environment, opportunities will decay into liabilities.


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