Urban Greatness Awaits Good Governance
PONDICHERRY, INDIA — My brother-in-law was caught in an evening downpour in Bangalore not long ago. He was on a scooter, on his way home, and he found himself struggling through streets where water reached to his thighs. The city’s drains were overwhelmed. He was driving through a mix of rain and sewage.
At one particularly deep point, the water rose above his engine. His scooter sputtered. He swallowed a mouthful. About a week later, he developed jaundice. He wasn’t sure what caused it, but the doctors were certain of one thing: the sewage water he consumed couldn’t have helped.
I’ve written before about the deplorable state of Indian cities. My brother-in-law’s experience may have been egregious, but anyone who has spent time in urban India would recognize the basic elements of his story: a collapse of municipal infrastructure, chaotic roads, an environment filled with health hazards.
By virtually any measure, the quality of life in Indian cities is abysmal. Only 60 percent of municipal waste is collected. Just 30 percent of urban sewage is treated. According to a recent government study of 127 cities, 80 percent of them had at least one pollutant that exceeded air quality standards.
A few decades ago, when the vast majority of Indians lived in the countryside and when agriculture represented around a third of national income, all of this would perhaps have been cause for less concern. But today, with India rapidly urbanizing, moving to an economy where services represent more than half of gross domestic product, cities matter a lot more. They represent both the tremendous possibility of India, but also potential bottlenecks in its development.
A study released last month by McKinsey, the consulting firm, does a good job of capturing the critical role played by Indian cities. The report, titled “India’s Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth,” contains an acute analysis of the opportunities and challenges presented by urban India.
As one would expect from a McKinsey study, the number-crunching is impressive — and the numbers themselves staggering. Between now and 2030, the report estimates, 250 million Indians will migrate to the cities, a figure that exceeds the current total population of all but three countries (China, India and the United States). As a result, India will have 68 cities with populations of more than one million (compared with 35 in all of Europe today).
Migration on that scale represents tremendous economic opportunity. The report’s authors calculate that, over the next 20 years, 70 percent of new jobs in India will be in urban areas and that the cities’ share of gross domestic product will rise to 70 percent from 58 percent. Fulfilling that potential, however, depends on managing the transformation well. And, given India’s abysmal record when it comes to even relatively modest rates of urbanization over the past few decades, the coming urban wave could just as well spell disaster as opportunity.
Shirish Sankhe, the report’s lead author, told me that the overarching message of the report was this: “India can basically take two paths. One path is the urban reform path, and one is the status quo path. One path leads to chaos and urban gridlock. The other can add up to 1.5 percent to G.D.P.”
In Mr. Sankhe’s view, there are two main challenges to the “reform path” — governance and financial. Perhaps surprisingly, the financial challenges appear less daunting. Although the sums of money required to modernize Indian cities are huge (around $10 billion a year, more than three times current levels of investment), the report argues that many of these funds can be generated by cities themselves through more efficient property taxes, unlocking the value of land assets and raising prices for things like water supply, mass transit and sewage treatment.
If these and other policies that allow cities to tap into their own latent economic potential are implemented, the report concludes, then larger cities at least should be able to generate up to 85 percent of the funds they need to accommodate the coming population surge.
Putting into place such policies, however, relies on institutional and political reform — in other words, better governance. Here, the prospects are more uncertain. India’s urban crisis is in many ways a reflection of a more general crisis confronting the nation. Like much of the country, cities suffer from the legal ambiguity, rampant corruption, political infighting and institutional inertia that block even the most enlightened policies and policy makers.
For example, although the country’s 74th constitutional amendment, passed in 1992, devolves a gamut of powers to urban bodies, in practice many of those powers are ill defined and limited by the reluctance of state officials to cede authority to their urban counterparts.
The report concludes on an optimistic note, arguing, based on international experience, that cities can be turned around in 10 years. Maybe so, but I actually found the cautious tone that runs through the bulk of the report more convincing — and, in a paradoxical way, more hopeful.
In 2003, in a widely noted report on Mumbai, McKinsey argued that the chaotic, gridlocked metropolis could be transformed into a “world class” city by 2013. That report, and particularly a section that listed 23 “quick wins” toward that goal, was derided as Panglossian in some quarters — a reflection of a general and often simplistic euphoria sweeping India at the time.
Seven years later, the nation is more sober, and perhaps a little more realistic. Its promise remains huge, but there is growing recognition, too, of the many obstacles that remain. The first step to overcoming those obstacles is surely to look them in the eye — to name them, and to acknowledge their deep, systemic character.
In fact, there are no quick fixes. But maybe, with perseverance, with a little honesty and clear analysis, Indian cities (and India itself) can ultimately live up to their tremendous possibility.