Abstract
The paper aims at understanding the urban sector reforms in India
critically in the context of changing paradigms of urban development
in externally financed projects. The paper will mainly focus on
the State of Tamil Nadu in South India where the World Bank and
other bilateral agencies have involved themselves over the last
25 years. The paper intends to put the series of urban development
projects financed by the World Bank in the macro perspective of
urban sector reforms in India as these projects have become 'best
practices' in urban sector. Over the years, one observes a clear
shift towards the neo-liberal paradigm of development which is integrated
with the project design of the on-going project - Tamil Nadu Urban
Development Project 2 (TNUDP 2). The project can only be seen in
the context of urban sector reforms in India at various levels along
with its history. This project has influenced the policies at the
national and the state level to an extent of re-application of the
same urban development model. The evolution of the project design
of TNUDP 2 and critical analysis of the project confirms the view
that the project needs to be looked at critically before it is replicated
in the other parts of the country.
An Outline of the Paper
I intend to give an outline of the research paper not necessarily
an abstract. Mainly because, I believe, that this form of representation
of my paper will explain the paper more convincingly than in any
other forms.
The Urban Reform Process in India
The prevalence of development assistance and foreign co-operations
in the development projects, have been accelerated with the policies
of economic liberalization in early 1990s. This has not only contributed
to the polemics of development planning but it also has lead to
certain processes of institutional and financial reforms within
the existing system. The effectiveness and politics of development
assistance has remained controversial subsequently, it has created
debates amongst the bureaucrats as well as academicians.
New instruments of finances and public administration are being
tried out not only in India but also in many developing countries
globally in the name of sustenance of the economy and for the purpose
of comprehensive development of the society. The economic liberalization
in India and the appearance of international institutions in the
development sector as the process-guiding mechanisms has lead to
reforms at various levels of the nation-state, public finances and
the role of the government. The perception of the global institutions
is uniform for the developing parts of the World and concentrates
on a development paradigm that is market friendly. Certain global
policies based on these agendas are adopted for practicing in the
developing world making the process of reform as a 'global process
with local changes'.
Neo-liberal agenda and the prevailing reformism
The term 'neo-liberal' is generally interpreted as referring to
the belief that the combination of democratic government, free markets,
a dominant private sector and openness to trade is the recipe for
prosperity and growth. However, John Williamson, who introduced
the term, actually argues that markets will not deliver everything
and that government must conjoin their commitments to free and open
markets with recognition of responsibilities in the areas of health,
education and poverty reduction. It is also recognized that market
liberalization by itself is insufficient - it must go hand-in-hand
with and perhaps even be preceded by, capacity building, market
regulation and often more effective law enforcement.
Project financing viz. Policy-oriented lending
One of the major changes in the multilateral financial institution
in the recent past is that of the change from 'project financing'
to 'policy-oriented lending' in the urban sector. A review of on-going
externally aided urban sector projects shows that majority of these
are in the form of project financing, and do not have only structural
impact and are also designed to bring about changes in urban sector
institutions and urban sector policies and programs.
Such projects are designed to provide financial assistance to undertake
development projects for targeted groups in specific cities. Example
of policy oriented lending by multilateral and bilateral agencies
are the Tamil Nadu Urban Development Project (TNUDP) funded by the
World Bank and Financial Institutional Reforms and Expansion (FIRE-D)
program funded by USAID.
While it may, as one of the several routes for Bank's engagement
in the India's urban sector, serve a purpose of conveying the message
that it was time to look beyond government for solving cities problems,
the sector needs wide-spectrum intellectual support on such issues
as market-based pricing system for non-tradable municipal infrastructure
and services, regulatory mechanisms for private sector participation
in urban development, State-municipal fiscal relations, and municipal
accounting systems. These constitute a small sample of areas where
urgent reforms are demanded by the Bank.
Externally aided urban projects - from physical
intervention to financial intermediation to STRATEGIC (policy oriented)
intermediation
Focusing on the development assistance in urban sector, one interesting
trend is reflected from the project designs of the externally assisted
urban development projects. The initial involvement of the Bank
focused on physical intervention in the existing system. Later on
the element of physical interventions started diluting more and
more to an extent that these agencies not really involves themselves
in the physical development but they facilitate other domestic and
local agencies to implement the physical development.
After the liberalization and globalization of economy, the processes
of decentralization, increased participation of private sector and
communities in the planning process have been greatly emphasized.
In this context, Tamil Nadu Urban Development Project 2 (TNUDP 2)
appeared to promote private sector investment in urban infrastructure
financing and the capacity building of the local bodies. The project
design of TNUDP 2 reflects the market based approaches and the elements
of neo-liberal paradigm of development. Tamil Nadu Urban Development
Project (TNUDP 1) was a first step towards it, though carefully
balanced between the governmental mechanisms and the market mechanisms.
TNUDP 2 is the 'third generation project' of externally assisted
urban development project. The first generation projects like MUDP,
CUDP and BUDP were more focused on physical intervention in the
existing system focusing on shelter -sites and services. The second
generation project like TNUDP 1 initiated the concept of financial
intermediary and involved private sector in the urban processes.
The third generation projects like TNUDP 2, GURP etc. not only promoted
private sector participation but also added certain components like
capacity building with the help of institutional strengthening.
These institutions acted like Strategic intermediary facilitating
the services beyond financing the projects. Thus, reforms are driven
carefully ensuring the return of the investment along with visible
changes within the institutional and policy framework.
COMPARISON OF INTER-GENERATIONAL URBAN DEVELOPMENT
PROJECT DESIGN IN INDIA
|
Aspects
of project design
|
First
generation projects
|
Second
generation projects
|
Third
generation projects
|
|
Examples
|
MUDP
1 & 2 (1978-86)
Madras
Urban Development Project
|
TNUDP
1(1988-97)
Tamil
Nadu Urban Development Project 1
|
TNUDP
2 (1999-2004)
Tamil
Nadu Urban Development Project 2
|
|
Cross
Cutting Themes
|
Improvement
of surrounding and quality of life
|
Financial
and Functional Management of the 'urban'
|
“Building
Institutions for Market”
|
|
Focus
|
Metro
Cities
|
Metro
and large cities, initiation of state level interventions
|
large
cities, small and medium towns along with active state level
interventions
|
|
Approach
|
Top-Down
Approach, not significant involvement of communities
|
financial
advisory services, Increasing community participation
|
Intermediation
and consultancy, Participating Planning at micro level
|
|
Tools
|
Master
plan, Area planning
|
Integrated
Land Use -Transportation Planning and Finance and Operating
Plans (FOPs)
|
City
Corporate Plans (CCP), City Development Strategies
|
|
Institutional
roles
|
Working
with governments
|
Initiating
Private sector participation in urban sector
|
Private
sector participation at various levels
|
|
private
sector involvement
|
Private
sector exists depending completely upon the government
|
involvement
of private sector in key area of service provision
|
Rhetoric
of 'government as a facilitator'
|
|
Implementing
agency
|
The
government appoints the project implementing agencies, monitors
and evaluates the project.
|
Government
appoints Project management group which implement the project
with other actors.
|
Government
is still an implementer with wider involvement of private
sector
|
|
Out
comes
|
success
in implementation but problems with sustainability and operation
- maintenance
|
satisfactory
implementation, likely sustainability but social/ environmental
conflicts
|
Private
sector participation works at micro level but no success at
macro level.
|
|
Policy
Framework
|
Land
ceiling, Rent control as evil acts, free hold tenure experiments
|
74th
constitutional amendment act in 1992
|
Model
urban local bodies act in case of TN, TNULB act of 1998
|
|
Project
Priorities
|
Housing,
Sites and Services, slum up gradation etc.
|
Infrastructure,
civic amenities, transportation etc.
|
Infrastructure
finance, capacity building, training, computerization
|
The financial success of TNUDP has encouraged the dialogue on the
re-applicability of this model in other states. It is considered
as a 'best practise' by the World Bank and the related organisations.
Many of the urban development projects in India and in neighbouring
country are influenced by it and have tried to incorporate some
elements.
Future Directions of Urban Sector Reforms in
India
The process of fiscal and function decentralization has been initiated
in India and thus the concept of local self government with an active
participation from various communities in the decision making can
be made possible. The emergence of market based approach for urban
services and for other provisions have to be critically checked
by the government. There are great possibilities for the financial
management, accounting system and taxation reforms to take place
in the various parts of the country. Large no. of externally assisted
projects are also going to focus of capacity building, training
etc along with the building of physical infrastructure. The role
of the government is going to be more crucial in regulating the
service provision.
|
