Thursday, May 14, 2015

The Great Indian Lethargy: Smart Cities & Erstwhile Regulations

With Prime Minister Mr. Modi laying out an ambitious plan for India, urbanization in India has seen an upward trajectory. We have a lot of investment being pumped into urban development programs. Modi’s Smart Cities Initiative and AMRUT urban missions will see investments exceeding 50,000 crore rupees going into India’s cities. Meanwhile, with a lot of buzz being created about urbanization and smart cities – some companies have created dedicated business units to tap the market. Each one of them, trying to market their product as the backbone of any smart city.

With so much money going into urban development, before anything else, it becomes essential to review our attitude as a nation first, to truly built a smart city and remain true to the definition thereof. We are a nation, with most of our leaders bred upon wrong dynamics of leadership. With little to no regard, about demographics of state/population they represent or natural/industrial resources they are to work with, every leader seems to think they hold a hammer of the same size, and unfortunately everything looks like a nail!

Such are the concerns related to tackling urban planning, that every plan will quickly turn into a potential candidate for reforms. There is a more basic need to reform our attitude towards urban planning and community - possibility of which has proved to be a Sisyphean Construct that governments across the globe, including India, are rolling up the hill.

In the Indian context, the landscape of regulatory environment is primarily an outcome of the division of subjects, where the Union and the State governments could frame laws, as provided in the Seventh Schedule of the Constitution of India. The problem of ‘stock’ and ‘flow’ of the regulations, is such a complex maze – and it is further thickened by the plethora of laws and regulation therein, which have simply failed to keep pace with time. We are trying to build smart cities – but are working with erstwhile regulations, the basic construct of this approach is appalling.

Another major issue emanates from the way the appointments in the regulatory agencies, and also the organizational structure, are made and held. On this count infusing professionalism through right selection and capacity building are the key issues – this will revitalize the waiting and decision time, and also the payment flow to vendors or stakeholders involved.  There is huge information asymmetry that adversely impacts the regulatory environment. While enterprises above a threshold may have the wherewithal to deal with the complex regulatory environment, to build smart cities, small and medium enterprises will play a much greater role – and greater coordination amongst ministries and the policy makers is the need of the hour.

With heavier regulation, chances are higher for corruption and sprouting of larger unofficial routines to get work done, but no better quality of public or private goods. One essential step forward for better urban planning is more democratic and limited governments - both at the Central and State level, with lighter and streamlined regulations to comply with.

If these fractures are not corrected, urbanization and development of smart cities will reduce to an obstacle race with one principal worry - uncertainties about the number of obstacles, the nature of obstacles and the location of the obstacles. This uncomfortable realisation will drive away investments and stakeholders. Functional autonomy with necessary accountability is a better recipe for urbanization and development of Smart Cities – to tackle the lethargy in the system and adapt to present day realities, for achieving desired objectives.