Wednesday, May 25, 2005
Wednesday, May 25, 2005 |
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Special Correspondent
LEND US YOUR EARS: Social activist Medha Patkar and her supporters block the way of Union Finance Minister P. Chidambaram (not in the picture) as he was coming out of a hotel after inaugurating an international conference on `Urban Renewal' in Mumbai on Tuesday.
MUMBAI: Union Finance Minister P. Chidambaram was virtually surrounded by hundreds of slogan raising slum-dwellers, led by social activist Medha Patkar, as he left a hotel here following the inauguration of an international conference on Tuesday. Ms. Patkar confronted Mr. Chidambaram and demanded that he hear the poor. However, the policewhisked him away. The conference on `Urban Renewal' has been organised by Bombay First, representing the corporate world. It is scheduled to discuss Mumbai's problems with international urban experts, representatives of the World Bank and the corporate sector over the next couple of days. In his inaugural address, Mr. Chidambaram stressed that "for the first time in this century, poverty will take an urban face." The 21st century was the first urban millennium in human history and that for India, urbanisation presented an "unprecedented challenge." Already one-third of India's population lived in cities and towns, constituting the second largest urban system in the world. By 2025 half of India's population would be urban, an estimated 650 million. Urban centres were disproportionately important for GDP (gross domestic product) growth and 50 per cent of India's GDP came from them. Hence, the growth of GDP and expanding the tax base depended on improving urban infrastructure.
`Local public goods'
Unlike other types of infrastructure, urban infrastructure represented "local public goods". The beneficiaries were linked to specific cities and therefore different systems of governance needed to be designed. The only viable model was a decentralised one, with a "sub-national" structure of governance. Mr. Chidambaram suggested that Mumbai and New Delhi were "virtually city states that need city governments with near-sovereign authority." He said the existing system of municipal governance was totally outmoded. Urban infrastructure reform needed to include institutional, fiscal, financial and regulatory reform with economic efficiency and poverty reduction at its core. The Minister suggested that the foundation of the financing pattern for urban infrastructure be user charges. But these, he said, had to be "reasonable and graded". In all cities, the per capita consumption of water was disproportionate, with the rich using the largest amount. The same applied to electricity and other urban services. "The rich have to pay more user charges if they consume more per capita."
Urban renewal mission
Speaking about the Centre's urban renewal mission, Mr. Chidambaram said the fiscal allocation for 60 cities would be based on their following a reform programme. This included reform in rent control, rationalising stamp duty, ensuring public disclosure, reform of property tax, graded user charges, citizens' advisory groups and use of e-governance. "I know this is a tall bill but it will have to be paid if our cities are to improve."
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