The PPRG completed and submitted the final report for a project for the Thirteenth Finance Commission, Government of India, in January 2009, on the potential of land as a municipal financing tool, taking the cases of Bangalore, Ahmedabad, Jaipur and Kolkata. The team studied the institutional arrangements for land use between the urban development authorities and municipal corporations in the cities and found that the responsibilities are often fragmented and sometimes unclear. The urban development authorities, being state government entities, are much better endowed with resources than municipal corporations. It is found that if revenues from land leasing and sales by the urban development authorities were to accrue to municipal corporations, there is no clustering around any measure of central tendency and there is a huge range in the addition to municipality revenues that could result. Specifically, the team finds that there could be an increase in municipality’s total revenues to the extent of 33 percent, own source revenues to the extent of 90 percent, and property tax revenues to the extent of nearly 930 percent, should revenues from land leasing and sales by the urban development authorities accrue to municipal corporations. In all cities, revenues from land leasing and sales are put to productive use given a majority is spent on capital projects. There is also enough local control over resources to be spent. Public private partnerships relating to land are more common with urban development authorities than they are with municipal corporations. While the team’s empirical findings are uncertain with respect to the impact of land lease or sales upon revenues, a general observation is that outright sale of land is more conducive for revenue potential than leasing. Finally, an incidental finding is that urban development authorities allocate small portions of their land than is required, for affordable housing for the urban poor.
Ford Fellowship Project (April 2008-January 2009)
As part of the Ford Fellowship, the PPRG team worked on the relationship between finances and service delivery taking the case of Bangalore, Ahmedabad, Jaipur and Kolkata. The team gathered all relevant financial and physical data pertaining to various local urban services such as water supply, sewerage, sanitation, solid waste management, municipal roads and street lights in the four cities. The finding was that spending on various local public services and cost recovery from them in the cities of study is below the national average for other metropolitan cities, as well as when compared with widely accepted norms, and the service level measured in terms of population coverage, is also worse in the selected cities than for other metropolitan cities in the country with respect to water supply and sewerage, with the exception of Ahmedabad. Even with respect to labor intensive services like solid waste and sanitation, a direct relationship is found between spending and service delivery in all the cities of study. With respect to roads, it is found that the lack of adequate spending along with other institutional factors lead to poor service delivery such as too many vehicles on roads (which could be an issue of regulation as much as infrastructure) or poor quality of roads. Street lights are the only service where spending and service levels are not directly related. Rather they are inversely related. All the selected cities of the study were spending less than nationally required norms on street lights, but were able to provide more than acceptable level of the service, even judged by international norms.
The final report (co-authored by Kala S Sridhar and Venugopala Reddy) will be brought out as a book (State of India’s urban services: Spending and financing) by Oxford University Press India in July 2010. The team has submitted on an extracted paper out of this as chapter for a Handbook of Urban Development in India, to be brought out by Oxford University Press.
North-South Project (June 2008-current)
In this project, the team is making an effort to understand the economic discrepancies between the northern and southern Indian states as being dependent on a variety of indicators representing human skills, capabilities and awareness, law and order indicators, infrastructure, urbanization and resource utilization factors such as finances including revenues and expenditures. Historical data ranging from 1960s and 1970s has been gathered on many of these indicators for two Indian states, Tamil Nadu and Uttar Pradesh. A small amount of funding was received from the Institute of South Asian Studies, National University of Singapore, for this project. A seminar was conducted on June 18th with a number of public policy experts who gave comments. Now the paper is scheduled to be discussed at a meeting in IIM-Bangalore. The most recent version of the paper may be found here.
An article extracted from this study (Spending versus Outcomes) was published in The Economic Times on July 31, 2009. This article may be viewed here.
An extracted paper (authored by Samuel Paul and Kala S Sridhar) relating to the TN-UP cases is under review. A different paper extracted out of this (authored by Kala S Sridhar and Venugopala Reddy) is being submitted to the Journal of Indian Business Research (published by Emerald Journal Group) for their consideration.
The PPRG is currently working on the below projects:
Is it Push or Pull: Evidence from Migration in India (December 2008-October 2009)
This project is funded by the South Asia Network of Economic Research Institutes (SANEI). In this project, the team is studying whether it is the pull factors such as job opportunities in cities, or, the push factors such as the non-existence of non-farm employment in rural areas, that is driving rural-urban migration in India’s cities, taking the case of Bangalore. A primary survey of 600 migrants (300 skilled and 300 unskilled) and 200 non-migrants (out of which 100 are skilled and the remaining 100 are unskilled) in Bangalore has been completed. The team prepared the draft report which was presented in a seminar at PAC in May. Subsequently the comments from the seminar were incorporated and the revised draft report was submitted to SANEI in May 2009. The team is awaiting comments from the Research Advisory Panel of SANEI and information regarding SANEI’s tenth annual conference where this is to be presented. SANEI’s website (http://www.saneinetwork.net) says that the tenth annual conference will be held in Dhaka during March 30-31, 2010 in Dhaka.
State of India’s Cities (May 2009-current)
This project is funded by Brigade Group. The project attempts to provide a comprehensive and comparative assessment of urban conditions and drivers of urban change in the largest 10 cities of Karnataka (Bangalore, Mysore, Hubli-Dharwad, Belgaum, Gulbarga, Mangalore, Davanagere, Bellary, Shimoga and Bijapur) as a pilot. The study establishes key indicators for monitoring and evaluating Karnataka’s cities, through which cities can communicate experiences and share best practices in the delivery of urban services, policy development, and data management. To the extent possible, all indicators measure policy outcomes and the database allow comparisons among cities. Data was gathered regarding the following aspects and indicators:
City economy
Economic base, Income and Investment flows, Residential, commercial and industrial buildings
Urban poverty (Slums)
Finances
Revenues, Tax collections, Capital expenditures
Physical infrastructure
Roads, Street lights, Transport, Banking
Social infrastructure
Education and Health
Basic services
Water supply, Solid waste, Electricity, Sanitation
Human development
IMR, MMR, Literacy rate
Law and order
IPC cases, Road accidents, Police stations and Police strength
Quality of life
Air quality, water quality, Parks, Temperature differences (Global warming) and vehicle congestion
Preliminary findings from the 10 cities were presented to Brigade on February 4th, 2010 at a meeting which was attended by top policy-makers of the state. Currently the report is being revised and written for submission.
It is likely that the project will be extended to an additional 5 cities in the state since additional funds from Brigade are forthcoming.