Urban futures of poor groups in Chennai and Bangalore How these are shaped by the relationships...

Published as S. Benjamin & R. Bhuvaneswari Urban futures of poor groups in Chennai and

Bangalore: How these are shaped by the relationship between Parastatal and Local Bodies Ch. 10

in Local Governance in India: Decentralization and Beyond by Niraja Jayal, Amit Prakash, Pradeep

Sharma (edt.) Oxford University Press New Delhi 2006

(Draft for discussion: Please do not quote without permission)

Urban futures of poor groups in Chennai and Bangalore How these are shaped by the relationships between parastatals and local

bodies

A research funded by UN-HABITAT and UNDP

By

Dr. Solomon Benjamin, R. Bhuvaneswari

June 2002

(TECHNICAL EDITING REMAINS, AND SOME CITATIONS)

Urban futures of poor groups in Chennai and Bangalore

1

Table of Contents

Executive summary ..........................................................................................................2

List of acronyms/ abbreviations......................................................................................3

Introduction.......................................................................................................................4

Party politics to popularise ideology or authoritarianism?...........................................8

Parastatals as instruments of party authoritarianism?...............................................11

Box 1: Bangalore’s institutional transformations towards an “anti-politics machine”......11

Box 2: News Item on the ELRTS in Bangalore..............................................................15

Erosion of municipal Autonomy....................................................................................17

Box 3: Excerpt from the LC Jain commission on the 74th. CA in Tamilnadu..................17

Financing and implications for policy...........................................................................21

Table 1 Impact on poor groups and their livelihoods as a result of a Mega Project in

Bangalore Excerpt from Benjamin and Bhuvaneswari (2000: 138) ...............................22

Box 4: Excerpt from from Benjamin and Bhuvaneswari (2000: 138): Urban renewal: Of

lost incomes, increased bribes, and court-room “proxies". ............................................24

Conclusion.................................................................................................................................. 28

ANNEXES

Annex 1: Excerpt from Benjamin and Bhuvaneswari 2000: 'Democracy, inclusive

governance and poverty in Bangalore' Section 3 C.....................................................31

Box 6: Local Political Structure in wards of West Bangalore .........................................31

Box 7: "Melting pot": Inter-ethnic political alliances in West Bangalore .........................33

Annex 2: The influence of parastatals in land and infrastructure provision in

Chennai & Bangalore......................................................................................................34

Annex 3: The “rational” world of para-statals: Reflections on the ELRTS ................41

References....................................................................................................................43


2

Executive summary

Cities are increasingly recognized as highly contested economic and political space. A

closer view of urban politics at the grassroots shows poor groups to be active agents, whose

survival and mobility is closely linked to highly politicized municipal arenas. This

politicization relates to cities forming contrasting economic settings: On one hand, “slum”

settings but housing distinctive local economies that provide poor among other groups with

livelihood; On the other, plush and “planned” corporate settings for big business

reinforcing their global connections. Significantly, these contrasting settings emerge from

very different institutional processes. The former, largely municipalized, relates to pre-

settled land being regularized, while the latter emerges as a Master Planned mega urban

development promoted by parastatal agencies. In many ways, their institutional basis

relates to the contest for public investments for infrastructure, access to productive urban

locations, and forms of regulatory environment to form the contested arena affecting the

futures of the poor. Key here is an institutional relationship: Between parastatals and

municipal bodies. Much has been written on the need to wind up or bring parastatals under

local government control, but they not only persist but also empowered to the detriment of

municipal government. This research attempts to understand the persistence of parastatals

in terms of this institutional politics in two cities: Chennai and Bangalore. Land issues are

central here. Significantly, in both Chennai and Bangalore, state governments, rather than

relinquishing the control of land to local government, have actually tightened control.

While local governments loose their powers to directly tap and use the urbanization process

to fund locally responsive development, they are encouraged by the state apparatus to

access institutional finance on terms that seem to further entrench centralized bureaucratic

and political control over local affairs. We also find preliminary evidence that the Mega

City scheme promoted by the central government may work to the political detriment of

local bodies. Some of the underlying issues that may explain this situation are a

congregation of forces. One is the emergence of “authoritarian party politics”. Second,

elite groups are increasingly connected to a big-business centered global financial systems

that seek particular forms of economic settings which in turn require particular forms of

land and infrastructure development -- funded in part by public investments. These two

interests converge to sustain and empower particular institutional settings centered on

parastatals but also seriously constrict the political space used by poor groups to shape

urban space and institutions in their interest. Thus, the urban futures of poor groups need

to be looked at not from the techno-managerial or constitutional / legislative aspects but

from how these relate to political situations at the ground, and within these, to increase or

constrain the ability of poor groups to claim. This perspective also suggests the need to look

at local municipal politics more closely – its relationship to local economy terrain, its

relationship to other agencies of government, and key issues of land and finance that

impact these.

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List of acronyms/ abbreviations

(To be completed)

Note

An initial form of this paper was presented at a workshop on Local Governance at the Jawaharlal

Nehru University New Delhi 11-12 April 2002 arranged by the Centre for Study of Law and

Governance (CSLG), UNDP and UN-HABITAT. Comments by the fellow panellist and also from

fellow participants are duly acknowledged. The paper is based on fieldwork in Chennai and

Bangalore where several people helped the team. Any mistakes / omissions remain the

responsibility of the authors. Comments are welcome and can be email to:


4

Introduction

Debates on globalisation and cities take two diverse positions. One is that globalisation has led to

decline of the nation-state’s significance and emergence of cities in their own right as economic

and political centres (Sassen, complete ref.). Second, a counter argument asserting the significance

of nation-state in shaping the economic and political fortunes of a region including the city

(Giddens, 1999, 2000). There is however an agreement within both the camps, that economic

globalisation has contributed to widening inequalities. Available evidences in the context of cities

demonstrate an increased vulnerability of the poor and even their exclusion from urban processes

(Kundu and Mahadeviah, 2000; ). Kundu and Mahadeviah attributes this phenomenon to that of

increased cost of living in global cities. While there is validity in the cost of living arguments, we

suggest that another important issue contributing to the poor’s exclusion relate to that of

transformations in governance institutional structures. The situation in many of our contemporary

cities is that while a few are able to access infrastructure and services that is of a high quality and

equivalent to first world levels, most others are denied access to even its most rudimentary form.

We suggest that this situation is linked to the emerging institutional arrangements dominated by

parastatals and special purpose vehicles over local bodies. They have impacted adversely on the

"voice" and the “manoeuvring” ability of poor groups to influence policy and implementation in

their favor. Such issues are not merely technical but largely shaped by institutional structures,

which (the seem to have perpetuated a situation of forced illegality. Perhaps a more serious issue

is that of access to jobs – which is one of the main priority for the poor. This is further reinforced

in the main driving force of cities and the main priority of the poor: Access to jobs. As cities get

entrenched in economic globalisation, productive locations in both central city areas and the

periphery becomes competitive terrain between the local economies catering to poor among other

groups, and the global economy largely benefiting the richer ones. The latter aim via Master

Planning and urban renewal to transform / shape urban settings to suit the needs of a corporate

economy (Benjamin and Bhuvaneswari 2001). In the ensuing conflicts, at stake is not only a life

giving economic process but also a political process, centred on local government. It is this level of

government where the poor find their "voice" fructified into action, and it is here that democracy

begins to be pro-poor (ibid ; Benjamin 1999). Thus, one of the key issues about contemporary

forms of urban poverty in a global setting is its relationship to institutional transformation and in

specific, the space for local government to ensure voice.

To fully appreciate the institutional and political arguments in this chapter, it is important to pre-

phase it with popular perspectives on urban economic process, and its political - institutional

aspects. At stake here are not "marginal" informal economies, that with modernisation (or

globalisation?) would improve. There is empirical evidence to show in a variety of contexts that

such economies form the dominant process (Portes et.al 1996), and significantly, backed by

political might (Benjamin 1996; Singerman1997: 173). Moreover, such dualistic views of informal

and formal has been shown long ago to be conceptually faulty and operationally fuzzy (Peattie

1983; Pearlman 1976). The persistence of use of such concepts can only be explained from an

ideological viewpoint. Today, with globalisation, such ideological positions appear to have been

reinforced: Global urban settings where improvement of the "macro" environment to attract capital

funding is essential for cities to be competitive -- even if such actions replace poorer areas, and

deprive the poor of their claims to central city locations. The issue here is that of increasing claims

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of big business on particular types of institutional structures and policy-making that open doors to

these. Increasing disparities in cities may thus relate to the increasing influence of big business

shaping urban economics and politics in its own image.

There are three important political -institutional aspects to appreciate in placing the larger argument

made in this chapter:

a) First, earlier research at the grassroots, on urban poverty in Bangalore (Benjamin and

Bhuvaneswari 2001), and on local clustering economies in Delhi (Benjamin 1996) focused

in part on the nature of "voice". This relates not necessarily to explicit protest, revealed in

civil movements, or empowered by public litigation. Instead it relates to more subtle and

hidden range of institutional strategies. We termed this "politics by stealth" or that is set

within local government or the "porous bureaucracy" (ibid.). This allows poor groups to

shape policy and implementations processes in their favor, or subvert it if required.

Significantly, this was not poor groups acting alone, but most often as active and significant

actors in alliance with other ones -- but where they shared complex reciprocal relationships

relating to land development and its regularisation and local economies.

b) Second, the effectiveness of political strategies used by poor groups relates closely to

governance structures reflected in differentiated institutional circuits. Different societal

groups use and shape different institutional and political circuits (Cox (1998) and Benjamin

(2000): The elites align with higher-level party politicians and senior bureaucratic circuits

focusing on parastatal1 dominated institutional domains. Poor groups link to lower level

bureaucracy and local politicians via institutional forms the “Porous Bureaucracy” and

strategies such as "politics by stealth" mentioned earlier. Thus, our institutional arguments

presented in this chapter are set in a highly politicised view of society where the poor form

active agents of change -- even if their actions are hidden.

c) Third, much of urban conflict is centred largely on issues of land and infrastructure, and is

shaped by the institutional aspects of planning. As mentioned earlier, for poor groups the

motivating force is economic survival, while for the richer ones, shaping public policy to

promote mega projects and their high quality infrastructure and services for efficient surplus

generation in a global context2. But there is another important aspect of land issues: The

basis for a ‘pro-poor’ economy reinforcing it’s institutional and political aspects. As

discussed in another work (Benjamin 1996), land from the economy perspective can be

thought to be ‘flexible’: Flexible land settings have three characteristics:

• A loose regulatory environment specifically oriented towards mixed land use to

allow for enterprises to locate in close physical proximity, important when most

poor households start enterprises using social and ethnic connections.

• A diversity of tenure claims and forms: This diversity of enterprises is made possible

1 As we shall explain below, by parastatals we refer to special purpose agencies instituted for specialist technical

functions -- and under the political control of higher levels of government. In particular, we focus on Development

Authorities responsible for city planning, land issues, and the provision of basic infrastructure. We also discuss other

service provider agencies like those responsible for water and sanitation. 2 Public interventions for the latter are critically important: To access land in productive locations and in large parcels

needed for mega urban design projects; To keep CBD areas beggar and squatter free; To fund the high cost off-site

quality infrastructure; To access cheap institutional finance and secure public guarantees against its default. All this is

made possible by institutional settings dominated by parastatals, and explicit support of higher-level political and

administrative actors (ibid; Benjamin forthcoming).

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via a variety of rental and ownership markets, and forms of tenure. Diversity of

tenure is perhaps the single most important factor that facilitates poor groups

access to land in urban locations.

• Possibility for incremental development within a wide range of infrastructure

settings: Entrepreneurs and poor groups usually start small and expand in relation to

demand. What starts off as a back room operation, often expands to take over the

entire ground floor, while the residence shifts into new quarters on higher floors.

• These characteristics also relate to how neighbourhoods residents especially the

poor can access finance tapping into real estate surpluses directly connected to land

issues, community savings mechanisms, and also trade based finance circuits

(Benjamin 1996: Chapter 5). Research in Bangalore clearly indicates the

connections of various types of poor groups to such financial circuits, important in

terms of access to cash flow (Benjamin, S & Bhuvaneswari R 1999: 81). Even the

poorest groups operated as active agents and inter-connected with complicated

financial circuits, each characterized by particular types of instruments, rates of

returns, and fitting in to a particular ethnic and cultural cycle of a trade /

manufacturing / fabricating activity and its participant groups.

This perspective on urban poverty is very different than the one adopted by the official approach of

poverty alleviation programs or that of international development agencies. The state approach

tends to be on a project framework. It is hardly surprising that the performance of these have been

severely criticised by parliamentary committees (DH April 2002). International development

agencies adopt a relatively more broad-based approach. It aims for a more holistic definition of

poverty centred on concepts of vulnerability, "livelihoods", a "rights" framework; recognition of

"social capital" to promote a wider role for civil society via the NGOs. There is somewhat a

grudging acceptance of the role of other civic institutions and even less on the role of local

politicians (see Putnam1996, Harris 2001, Beall 2002, Rakodi, 2002). This approach too comes

under severe criticism on their inadequate focus on political-institutional aspects (Ferguson 1996;

Flyvbjerg 1996; Stackhouse 2000; Harris 2001). Furthermore project based approaches tends to

"ghettoize" poverty in a neutral, bureaucratic, and a-political world. As Ferguson points out, it cut

the very political processes that poorer groups use to move up in life. There is a third approach

that explores the conceptual, political, and the rationality of technical agendas of projects. It

raises useful questions on the motivation and interests that shape institutional politics but here

again the analysis is pitched at the level of project.

Some of these studies specifically view the urban terrain (Peattie 1987) including a rapidly

growing literature on the global city and its evolution into gated communities (Zukin1993;

Marcuse and Kempen 2000). This paper is very much part of the third category of approaches.

Also, it focuses on not what is ideal, but rather on how things work on the ground and the

“rationalities” that drive this. As Flyvbjerg (1996:2,6) writes:

“..Much of modern politics, administration, and planning – and many theories about this

phenomena – emphasise the ideals of modernity but do not examine modernity as it is

actually experienced.. ….the main question is not only the Weberian “Who governs?’ …

but also the Nietzschean question, what ‘governmental rationalities’ are at work when

those who govern govern..”

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It considers the urban arena as a specific realm that lends itself to a particular political analysis

around land issues (impacting economic processes) and forms of institutions (municipal system

among other institutions). Given the multitude of institutions involved in the urban process and the

limited opportunity to influence policy, it is the divide between policy and implementation that

provides institutional space and access to the poorer groups (Grindle, 1994; Flyvbjerg).

Our intention here is to focus to explore how poor groups seems to be losing this important

political space. The urban arena is one where poorer groups in complex and un-predictable ways

attempt to establish with relative security claims to public resources, secure tenure, and in

particular, access to contested urban locations. While poor groups may gain or loose clout within

different institutional systems, our operating hypotheses are that institutional structures dominated

by parastatals are particularly regressive environments. We have selected two cities in South India

for this purpose: Bangalore and Chennai, and arrive at this hypothesis by drawing from previous

work on the relationship between poverty and governance systems in Bangalore (Benjamin and

Bhuvaneswari 2001). We also draw upon the growing literature on the process and impact of

decentralisation. A more broad-based approach is a closer look at the governance structures within

which development programs are operationalised. A key issue here has been the progress on and

the impact of decentralisation via the 74th

/ Constitutional amendment (74th. CA). Much has been

written on the specifics of urban decentralisation referring in particular to the (74th. CA) and the

way this has been adopted in Tamil Nadu and Karnatakai. This includes a growing literature on

management and governance structures in Bangalore and Chennai, including State Government

instituted high-powered commissions to look into the issue. A key issue is that of the relationship

between parastatals (and specifically Development Authorities) and municipal government. Rather

than burden the reader with these background issues, we provide in Annex 1, an essay which

discusses this issue under various themes. This is significant since parastatals are often promoted

on grounds of their technical competence with little questioning of their political positioning.

Annex 2 for instance, shows in a brief but interesting way, the issue of “rationality” in a seemingly

technical project.

Our interest is thus on institutional aspects embedded in the nature of urban change and

reflected most clearly in contests over the access and control of urban land. We look at two cities

- Chennai and Bangalore, where like most Indian metros, parastatals and specialized finance

institutions increasingly shape urban development decisions. The choice of cities came from

several factors: First, the sponsoring agencies made such a useful suggestion of Bangalore and

Chennai – whose governance structures are greatly influenced by parastatal agencies. There are

useful political differences: Party structures in Chennai, reflecting those in Tamil Nadu are

relatively well rooted, unlike those in Bangalore whose political climate till recently were

characterised by independents. Second, it seemed that local politicians in both these cities had

contrasting relationships with the historical process of land development – influencing their

capability for political strategy that built upon claims established by poor groups. In Bangalore, our

previous research had revealed that most local politicians had very close connections and relatively

un-interrupted relationships with land markets. In contrast to Chennai it seemed that prolonged

political supercession may have dislocated such links. This difference seemed to be accentuated by

quite different operational styles of Development Authorities. In Bangalore, the Bangalore

Development Authority (BDA) selectively implemented Master Planning, while in Chennai, the

Chennai Metro. Development Authority focused mostly on regularization. Finally, both cities are

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exposed to big business and global influences. This was in different ways, and had also changed

institutional response. These contrasts and similarities provided a useful setting for our main

hypothesis: Parastatals and special agencies form key mechanisms used by increasingly

authoritarian party systems to entrench dependency of local government, and in-effect poorer

groups. Furthermore, such alliances relating a pro-poor situation or antipoor would relate to the

congregation of big business (benefiting from such political space and access), and the party elite

(benefiting from such dependence) would lead to reduce political space of the poor and hence little

resistance to anti-poor policies. We explore this hypothesis in several themes – some explored in

greater detail than others due to relatively authoritarian political climate in Chennai.

Party politics to popularise ideology or authoritarianism?

Given that a bulk of vote banks for political parties in most Indian cities is drawn from the poor

why is it that anti-poor policies come into being and are not contested by elected representatives

within the party structure? In order to comprehend this it is useful to understand how policies are

shaped within party structure. We find that there is very little research on intra-party dynamics in

the urban setting in India – leave alone specific to Bangalore or Chennai. Hence we draw upon

Subramaniam's (1998) study of Dravidian parties in Tamil Nadu and informal interviews with party

activists in Bangalore and Chennai. Our investigations suggest that increasingly parastatal centered

institutional settings allow a fracture in party politics where bonding happens by authoritarian

control rather than common ideology or value. By this we refer not necessarily to an explicit

dictatorial form of governance; but rather a “democratic” structure, shaped increasingly by very

tight party control, often using physical and institutional might to suppress not only dissent but also

forms of autonomous identities, that used to till recently characterize regional and even national

parties. The ADMK for instance in Chennai, is famous for the way it can mobilize thousands of

auto-rickshaw operators at a moment’s notice to immobilize the city when the party chief feels

threatened. In Bangalore too, a city whose political character was till recently was characterized by

independents, is now one party dominated and governed tightly not only by its Chief Minister but

by the party high command in Delhi. This is most keenly observed at the times of local elections.

The issue then is not merely “booth” capturing but that this is done in a systemized manner. This

includes the carting of people (usually improvished squatters with a promise of booze, money or

both reinforced by coercive threat), the preparation of ink erasers to allow for double voting,

physical violence threatening opposition candidates, and the State ruling party to change the

reservation of political constituencies at the last minute to destabilize the opposition3.

These come at significant times – when policy discourse by major political parties in both cities,

have time and again alluded to Singapore as a model city for development. Significantly, this shift

has happened across political parties. For example, in Chennai, the Dravidian Party and currently

3 The ex-deputy mayor in Mangalore (Janata dal’s lone candidate) mentioned that the recent local elections, for the first

time the local political circles were surprised by the systemized poll rigging while the bureaucratic system being

coerced to “look the other way”. Significantly, the ruling party imposed on the local political landscape relatively new

comers with little political experience but with greater dependence to “party interests” rather than more established

candidates of the local unit. In Delhi too, perhaps the model for centralized “authoritarian” party politics, local

elections are fought by relative unknowns or politicians with non-local constituencies imposed by the party structures.

This form of politics also allows itself for particular forms of organized criminal politics. Rajni Kothari mentions how

the ethnic violence in 1984 was actively organized and facilitated by the then ruling party to murder almost 2000 Sikhs

over three days, and more recently, the carnage in Gujarat where such systemized violence has continued over two

months.

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the ADMK policies, which once emphasised on small industrialization, support to local economies

via regularization has now shifted to large development projects as a way to shape Chennai’s

development. For example, the city is developing as a large automobile cluster and export based

industries. So is the case with the Congress party in Bangalore with it's support for large mega

projects, whose clearance has been obtained from the BJP at the center. This rules out any explicit

local political oppositionii. Thus an issue is if the globalizing trends of city economies polarize

party influence. All this parallels the rise of a form of political authoritarianism. By this we refer

not necessarily to an explicit dictatorial form of governance, but rather a “democratic” structure but

shaped increasingly by very tight party control, often using physical and institutional might to

suppress not only dissent but also forms of autonomous identities that used to till recently

characterize regional and even national parties. The ADMK for instance in Chennai, is famous for

the way it can mobilize thousands of auto-rickshaw operators at a moment’s notice to immobilize

the city when the party chief feels threatened. In Bangalore too, a city whose political character was

till recently was characterized by independents, is now one party dominated and governed tightly

not only by its Chief Minister but by the party high command in Delhi. This is most keenly

observed at the times of local elections. The issue then is not merely “booth” capturing but that this

is done in a systemized manner. This includes the carting of people (usually improvished squatters

with a promise of booze, money or both reinforced by coercive threat), the preparation of ink

erasers to allow for double voting, physical violence threatening opposition candidates, and the

State ruling party to change the reservation of political constituencies at the last minute to

destabilize the opposition.

To understand this situation more clearly it is useful to use what Subramaniam (1998) who

distinguishes two forms of political regimes, bureaucratic clientlism and popular clientlism in the

benefits are distributed and policies legitimized. In bureaucratic clientlism, policies are often

centered on large-scale development interventions, and ignore distribution aspects. Political support

comes out of benefits being (narrowly) distributed via state officials and local party bosses often

through social elitesiii

. Bureaucratic regimes adopt "..Official discourses of development and nation

building to which social profile of distribution of benefits is not central". In contrast, popular

clientlism builds its constituency via projects that satisfy mass and immediate needs - even if some

of these may be largely symbolic. Benefits to party supporters are distributed via extensive

politicized social networks of a heterogeneous mix intermediate and low caste groups drawn from

different income categories. The power of Dravidian parties of DMK and the ADMK in Tamil

Nadu arise from their populist policies. One could, perhaps, understand the increasing dominance

of regional parties in the urban politics in Chennai as related to the opening up of political space for

majority of excluded groups to influence the state policies. Bulk of the supporters in both the

parties in urban areas is those engaged in small service, trade and manufacturing sector – reflecting

the economic structure of the urban economy. This is true for Bangalore, where a majority of local

representatives were linked to local economic activityiv

. A difference between Karnataka and

Tamilnadu politics is that of the nature of party candidates. In the former it is drawn from largely

independent candidates (Manor, 1992), whereas in the latter the cadre system is strong. Thus, the

interesting thing in Tamilnadu case is the autonomy for party supporters. This commonality of

local level political autonomy might be attributed to the relationship between popular clientlism

and a city’s economic structure that shapes in turn the nature of its political claim makingv.

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A conventional explanation to the in-

ability of poor groups to establish political

claim and influence on policies is that of

“patron-client” forms of relationships.

Within this conception, elected

representatives ignore and exploit the poor

-- seen as passive agents / beneficiaries.

This suggests a view of local politics being

captured by the elites and thus regressive

for the poor. Such a perspective justifies

interventions external to the political

ability of the poor as primary movers

themselves. This is seen to be either the

National State, or a need to mobilize an

independent civil societyvi

. We feel that a

“patron-client” framework is too simplistic

and demeaning to the poor. First, as

Singerman (1996) points out, such

concepts are based on a utopian notion of a

politically neutral (and perhaps

incapacitated), non-clientalistic electoral

contract. Our own detailed documentation

of grassroots level politics in the highly

politicized neighborhoods of West

Bangalore shows a much more

complicated picture. Voters tend to deal

with the parties as a group via their caste

associations, often across religious

boundaries, and via highly politicized

residential and occupational associations.

Drawing from Batley (2001),

Subramaniam (1998), and our own fieldwork in Bangalore, we feel that patron-client relationships

can take different forms at the local level resulting in varying impacts for the poor. Rather than a

dualistic divide of interests of electorates and their representatives our fieldwork illustrated

interest congruence between the poor, local economic elites and local politicians. Similarly, in

contrast to a patron-client conception of a homogenized political behavior, there is considerable

divergence of interest between the higher-level party functionaries, and middle/lower level

functionaries as well as the cadres. All these factors render it difficult for parties to ignore their

demands on real goods (Benjamin and Bhuvaneswari 2001; Subramaniam (1998).

What seems to have changed things is the way the elite in metro cities has begun to chart out a

political cleaver between a responsive vote bank politics that threatens their access to resources in

increasingly contested cities. Thus, rather than patron client conceptions it seems more useful to

analyze the complex bundle of political strings and the larger environment that shape these. In

Annex 1, describing a highly politicized and “slum” dominated neighborhood of West Bangalore,

we show how political landscapes are complicated terrain characterized by complex reciprocal

Bangalore is today characterized by the establishment of a parallel and powerful system of governance supervised and directed by corporate groups. This is in the setting up of a specific policy group -- the Bangalore Agenda Task Force (BATF). Set up under the chairmanship of the CM, this has the participation of the corporate sector as directors rather than as members or advisors. For instance, the director of the BATF has been the managing director of India's best known IT company. The connections lie deeper and for the BIAAL (The airport authority) the CM is said to have been instrumental in promoting the CEO of Bangalore largest IT corporate to take over as its head (See `Narayana Murthy may be non-executive chief . State Govt. to float firm for B'lore airport project' Deccan Herald January 3 2001). More recent reports in reputed current affairs journals point to almost incestuous relationships that may underlie such institutional changes. See for instance, "Infy rules -- Bangalore Diary" in Outlook, Issue of Dec. 17, 2001. Volume XLI, No.49. The report provides details of connections between Bangalore's premiere IT company and close relatives of the CM, and in turn, to several mega development projects. Also included is the BATF. Political activists also suggest the more hidden "real estate" interests of members of the BATF in the way that forum is used to access public land or clearances for land development in central locations. For instance, in October 2001, a serious political issue was the allocation of a valuable plot in the Bangalore University of Agricultural sciences to a Bio-Tech company whose CEO is a core member of the BATF. This resulted in a protest by professors and students who were consequently beaten up by the police who came to enforce the order. Significantly, the university's board of governors ruled against the allocation and are now threatened with removal by the state government. Six months later, these lands were allocated to the company amidst allegation of land speculation. Interestingly, corporate representatives in the BATF preside over the membership of various city management agencies including the city Development Authority, various para-statals, the city municipal corporation and the various service providers. The latter are represented by their bureaucratic heads, and not political committees (as would be in a municipal government).

(Continued on next page)

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Such institutional changes as the BATF helps corporate groups in

Bangalore (especially from the IT and Bio-Tech companies) to form

policy, supervise it's implementation via frequent "stock-taking"

exercises where senior administrators of various service and

infrastructure providing agencies report on their performance and define

new targets. The organizational influence of BATF is extensive --

directing specific interventions, shaping and wetting the municipal

budget prepared by the Commissioner prior to its presentation to the

elected council, although this has been a source of political tension (See

a) Deccan Herald '.BATF officials accused of meddling with budget

Thursday, April 19, 2001 Deccan Herald News Service; b) See Deccan

Herald: CM snubs politicos for opposing BATF BANGALORE, Feb 24,

2001).

The influence of the BATF on land as economic setting is critically

important and happens in two ways. First, it provides corporate groups

with an efficient (although authoritarian) institutional channels to get

things done and cut through the politics to secure land too. This relates

to the formation of a BATF inspired land policing task force -- headed

by the Deputy Commissioner a bureaucrat; Second, given its direct

political connections at the highest of levels, it can attempt to shape the

regulatory climate to push existing economies in making ways for a

corporate one. In a meeting which the author attended, one of the BATF

members recounted the instrumental role they played in influencing the

process to move out businesses from the central parts of Bangalore, and

newer strategies to toughen regulations and cut off supplier links.

(Continued on next page)

relationships. In an earlier research we had explored the hypothesis if Master Planned areas, by

changing the form of claims to land by poor groups, local business / trade elite, and local

politicians, resulted in distinction anti-poor environments (Benjamin & Bhuvaneswari 2001). The

main argument there related to forms of planning and their resulting pro-poor or pro-rich

landscapes. In building on this, we take on a more institutional focus as discussed in the themes

below.

Parastatals as instruments of party authoritarianism?

The above discussion suggests a closer look on to elite influence in both the political,

policymaking, and implementation arena. It also suggests that in looking at the relationship

between forms of politics (popular clientlism / Bureaucratic clientlism) and a city’s economic

structure, we need to look into how the political elite in both cities comes to dominate the urban

political arena and institutional terrain that allows this to happen.

Box 1: Bangalore’s institutional transformations towards an “anti-politics machine”

Benjamin (2000) in commenting on governance process in Bangalore suggested that the rich and

the poor enter into alliances with different levels of political representatives. The former ally with

higher-level party politicians using

non-representative parastatal

structure, while the poor with local

representatives and lower level

bureaucracy usually of the

municipality4. To understand this

further, we focus below on the

mediating role of party hierarchies

in shaping local economic fortunes.

The accompanying box discusses

the corporate link in detail.

The party hierarchy mediates /

filters access to decision making

relating to issues of land and

regulation, and on large Mega

development projects too. To

understand this clearly, it is

important to appreciate the

transition in institutional roles from

the 1970’s / 80’s, to the late

nineties.

Although, parastatals are a feature

of urban governance since the

1970s, there was some but very limited scope for elected representatives to influence development

policies at the implementation stage. An example is the regularization policies adopted by ruling

4 See for example the alliances between Krishna and the Corporate sector. The BATF, which we discuss in the later

half of the paper is headed by Nilekani, the president of Infosys. This task force constituted with the support of chief

minister aims to develop Bangalore as a "Singapore".


12

(Continued from Pre-page)

There are also pressures to institutionalize corporate control at

the municipal level. According to press reports, there were

strong pressures by the CM to appoint the wife of the CEO of

India's most famous IT corporate as a "nominated" member of

the municipal council. (Bangalore TOI 10/ May 2001 Sudha

Murty likely to get Council berth By Keshava Malagi

BANGALORE: With five nominated seats for the Karnataka

Legislative Council falling vacant on May 11, Sudha Murty,

wife of Infosys Chairman Narayana Murthy, is among the hot

favorites for a seat. Chief minister S M Krishna is understood to

be keen on nominating Sudha Murty.) Some benefits are

immediate. While un-authorized commercial structures by

poorer groups in Bangalore are demolished without notice or

compensation, land use and tax violations by IT corporate

groups are provided with an opportunity for representation.

(See: BDA issues notice to erring 132 IT firms Deccan Herald

(DN) News Service BANGALORE, April 22, 2001.) In Delhi,

the case of "Sanik Farms" an un-authorized set of "farm houses"

which house elite groups and survives various government

regimes is a case in point.

Others relationships are more direct. The State Government of

Karnataka recently announced that as part of measures to ensure

planned development and make it India's IT center, Bangalore

will have many much more renewal programs to rejuvenate the

city. A major recent Master Planning initiative by the Bangalore

Development Authority (whose head is the Chief Minister) is a

belt of 42 square kilometers in this city's elite south zone to be

designated as an IT zone (See BDA signs pact with Singapore

company New Indian Express 6th. July 2001). The Mega

complexes located are likely to have access to dedicated world-

class facilities and services and planned under collaboration

with a Singapore based company to ensure world class

standards. All this with public funds while much of Bangalore

suffers from a water shortage and routinely experience deaths

due to gastroenteritis. Despite opposition from Bangalore's

popularly elected municipal council, the State Government

provided infrastructure benefiting IT firms with special tax

breaks (Opposition flay cut in improvement grants for wards

DH News Service BANGALORE, March 24, 2001. Councilors

focused discussions on the tax breaks provided to firms

implementing Optical Fiber Cable in the city.). Such

institutional transformation is a key part of an "anti-politics"

machine apparatus (drawing from the concept as proposed by

Ferguson 1998)

(All excerpts from Benjamin forthcoming)

parties in both the cities, largely due to internal party pressure. In such cases, the concerned

councilors were able to influence policies via the MLAs. In the 1990’s however, with the

proliferation of parastatals for special

projects and private-public

partnership institution for financing,

reduced the inter-dependency of

higher-level party politicians on local

leaders. Also, land development

became further centrally controlled.

The commissioner of the BDA made

a telling remark to one of the authors

in commenting on the way their

institutional philosophy related to

land development had changed with

the coming into office of the new

Chief Minister:

“..the previous approach of

regularization is over….. The

emphasis is now for the

authority to take over land

development and enforce

master planning …The CM

rings me every afternoon to

check on progress….”

As the control of land, its

development and its management

forms a key political instrument, it is

hardly surprising that Development

Authorities are tightly controlled by

the State Government rather than be

devolved as suggested by numerous

high powered commissionsvii

. This is

clearly evident in Chennai in the

CMDA’s conflict with the CCMC on

building regulation. Not

surprisingly, as several scholars of

public administration have written,

these bodies are also instrumental in

reducing municipal government to a

maintenance role, and local public

representation and participation

fractured and almost a farce5. In

Karnataka, and Bangalore in particular, control over land development by the state party and big

5 M N Buch, himself a senior administrator and one time Vice Chairman of the Delhi Development Authority has

written extensively on fractured public representation and influence on the Master Planning process. See Buch, 1985.

Also see Mohanty 1987; Chapter 8 in Pinto 2000.


13

business, is reinforced not only by the conventional Development Authorities but also by a newer

genre of parastatal agencies6. The box on the following page highlights this issue. The key issue

here is that in empowering parastatals to undertake mega development, an important aspect is to

undermine local authority and also access by civic society.

Changes in financial routing also reinforce the situation. An important point to note that decision-

making is not only in the hand of technocrats but rather in the highest of political authorities. The

following excerpts from our interviews provides insights:

“… Development of an inner ring road … the east coast road in south madras accelerated

development in that area. Land along this road came under the jurisdiction of three

organizations namely the CMDA, CMC and the panchayats. The planners of my

organization (CMDA) argued that if development is left to others they would spoil the

environment. CMC argued that they should control development as the panchayat are not

capable of it and the panchayat were not willing to do it. …. Interested parties sought to

pressurize the party to resolve the issue in their favor… eventually the then chief minister

got involved and partly due to party pressure resolved it in favor of municipalities”.

(Source: interview with a senior bureaucrat, CMDA April 2002)

6 For instance, while the expressway authority (Bangalore Metropolitan Infrastructure Corridor Development

Authority) has no political representation it includes a representative of the private corporate Corporation (its private

partner) on it's governing board. A similar situation is with the international airport development authority. This

organization's chairman (a post which is normally given to an elected official) is the CEO of an Indian IT giant.

Another instance is of the IDeCK (The Infrastructure Development Company of Karnataka) set up by the Government

of Karnataka and Infrastructure Development Finance Company (IDFC) (an autonomous institutional finance

corporation).


14

This is the same in Bangalore where

the middle and lower level politicians

have no say on the type of

development proposed and these

groups have to contend with the well-

known "benefits" that trickle down.

Second, during the construction of

Mega Projects, there is an opportunity

to access inside information and play

the local real estate market. Having no

say in major policy issues, MLAs work

at the ward level is centered around

day to day quick fixing of

infrastructure works in Chennai and

utmost routing small investments as in

Bangalore via their discretionary

budget to their constituency. In this

process, MLAs tend to depend on

lower level bureaucracy within

parastatal institutions7. In parallel,

there is also increased institutional

control via senior bureaucrats. This

implies difficulty politicians to respond

to local pressure and maneuver via a

porous lower level bureaucracy or via

stealth politics.

Consequently for a majority of MLAs

and councilors depend on senior party

leaders. The structure of parastatals is

such that only senior party politicians

at the level of chief minister and urban

development minister influence

implementation of mega project --

even beyond the narrow technocratic agenda if required.

"…The ELRTS line in Gandhinagar station was proposed along the side of the bank

which is encroached by squatter settlements. We had to evict the squatters … but they are

from TRB’s constituency (a senior politician and an ex-MP). He negotiated with CMDA on

behalf of the squatters. The dwellers were clever, they wanted the line to be!shifted to the

other side of the bank but my planners were adamant… they argued, that their plan was

based on opening up hinter land behind the squatter settlements for development… we

would have evicted in other locations… this was not easy… finally we had to shift the line

and propose a bridge cutting across the settlement… the leaders were very clever… they

told us to plan the bridge along the areas where there are shops but not residences… they

7 Based on interviews with MLAs in South Madras Constituency.

Non-starter ELRTS bleeds State white (A report of the Public

Undertakings Committee of the Karnataka State Legislature)

DECCAN HERALD Saturday, March 30, 2002

The State Government established Bangalore Mass Rapid Transit

Limited (BMRTL) eight years ago to tackle the problem of ever

growing vehicular traffic in Bangalore City. From 1995 onwards, the

government has been levying a BMRTL cess on petrol and diesel

purchased in the City. Of the Rs 275 crore cess collected so far, Rs

142.84 crore has been released to BMRTL. But the company has

failed to accomplish its task. BMRTL has been engaged in

appointing consultancies and investing funds in financial agencies to

earn interest rather than suggesting a mass rapid transit mode.

Despite knowing that it would be a herculean task to mobilise Rs

4,000 crore for the elevated rail transit system, which is one of the

modes of transport mooted by BMRTL, officials have not bothered

to convey the practical problems involved in the execution of the

project to the government. The officials including the managing

directors of BMRTL between 1995-96 and 1998-99 have spent Rs

17.39 lakh on foreign study tours. They were accused of wasting

public money by living in luxury.

These observations about the BMRTL have been made by the Public

Undertakings Committee of the State Legislature in its report for

2001-02. The report was submitted to the Legislative Assembly on

March 28. The committee, comprising 19 legislators, was headed by

Congress MLA H M Revanna. Expressing dissatisfaction over the

style of functioning of BMRTL, the committee said the government

is contemplating closing the company in view of difficulties in

raising an estimated Rs 4,000 crore for the ELRTS project. The

panel suggested that the government should take a final decision in

this regard without further delay. The employees could be deployed

in other government departments/offices.

The report said that in 1994, the Institute for Leasing & Finance

Services (ILFS) in its feasibility report had estimated that it would

cost Rs 4,000 crore to have an ELRTS for 90 km. It had suggested

that in the first phase 25 km could be considered by spending Rs

1,200 crore with government and private participation being in the

ratio of 25:75.

The UB Group consortium, which bagged the contract, had

estimated the cost at Rs 2,900 crore for the first phase. The

consortium expected the government to bear 93.8 per cent of the

total cost. As the government is not in a position to invest such huge

funds, the proposal has been shelved. The committee said that as per

information given by the government and BMRTL, 300 cities spread

across the world have ELRTS and only in four cities is the system

running profitably. In the rest of the cities, the system is sustained by

government subsidy. The state government suffered from an illusion

that the private sector might participate in the project despite

knowing it would be good money down the drain. Yet, the

government established the BMTRL and collected the cess from the

public. At least now the government must put an end to the wasteful expenditure, the report said.


15

argued that in case of shops they can easily identify another location…finally CMDA had to

yield"

(Interview with a senior bureaucrat, CMDA)

Box 2: News Item on the ELRTS in Bangalore

There are other lobbies that push for mega –projects. One important one, as Box 2 illustrates, are

the significant bureaucratic lobbies at work, which today are increasingly influenced by a growing

tribe of development consultants. While the latter are perhaps required due to the growing

technological sophistication of the project, the issue here is one of accountability – where

consultancies carried out are dead end in public purpose but highly profitable private enterprises8.

Another aspect of parastatal influence on electoral politics is the way it intervenes in land

development to shape political relationships. In locations developed outside master planned

framework, heterogeneous land uses allowed for binding the poor and their representatives in more

than one way -- economic, ethnic, and neighborhood ties. Our study in Bangalore suggests that

often-local representatives were involved directly in land development, most often catering to low-

income groups. Their speculative returns were related to land being settled and regularized. As we

have shown in detailed research elsewhere, local economy and politics were inter-linked (Benjamin

and Bhuvaneswari 2001). Such close ties have several political impacts. First is that they resist

domination by higher level representatives, which helps local groups to maintain their "control"

over establishing locational claims. This in turn, due to the complex reciprocal relationship within

the local community, helps to consolidate de-facto tenure and thus improve land access. Second,

such strong interconnections "exclude" the imposition by central party commands of other elected

representatives outside their constituency -- a common feature in party politics. This intimate

political arena promotes reciprocal relationship among party hierarchies but often defined on

personal rather than on party terms. Third, even higher-level political agents have to contend

themselves with accommodating a variety of local leaders who in turn need to respond to very

complex community equations. All this represents a complex and highly politicized civil society

(ibid.).

In contrast to the above, master planned areas are allocated via bureaucratic channels –setting a

very different political arena in place (ibid). First, the land development process fractures existing

reciprocal links between local politicians and groups. This allows party politics to use the

bureaucracy as an instrument to reinforce political control in parallel to souring funds in this

process. This convergence of party politics and bureaucracy leaves little scope for a dynamic local

political milieu to emerge. Such processes of development promote what is traditionally defined as

"clientalistic politics" where poor groups have fragile claims.

One question that emerges is that without making more fundamental political changes (i.e., making

parastatals accountable to local bodies as in West Bengal, or disbanding them as in Kerala) are

there administrative mechanisms to ensure greater parastatal responsiveness? Our discussion on the

Joint Development Council (JDC) in Chennai explores this issue. Even though the 74th. CAA was

8 This is paralleled in the area of governance reform stressing simplistic accounting practices with minimal

understanding of the political circumstances, but highly profitable for the Charted Accountancy profession who take to

these avenues of employment in the development business.

Solomon Benjamin


16

The nature of the interaction between the CCMC

and the CMDA is defined in the following manner

in the LC Jain Commission report:

DELEGATION OF POWERS The Corporation of

Chennai has been delegated with powers by C.M.D.A

to issue Planning Permission for ordinary buildings

(i.e.) buildings with four dwelling units each unit not

exceeding 300 sq.mts. or commercial area not

exceeding 300 sq.mts. or building comprising not more

than two storeyes. The proposed second floor for

residential purpose where ground floor and first floor

are in existence for more than 3 years also coming

under the category of the ordinary building. The

Corporation is also entrusted with powers by

C.M.D.A. to issue Planning Permission for

Institutional Buildings not exceeding the height of 15

meters. The Corporation of Chennai could also

sanction the Sub-divisions and layouts not exceeding

the area of two hectares under the powers delegated by

the C.M.D.A. The Planning Permission Applications

for Special Buildings and Multi-storeyed buildings are

directly sanctioned by C.M.D.A. and forwarded to the

Corporation for issue of Building Permits by the

Commissioner, Corporation of Chennai.

Commissioner has delegated these powers to the Chief

Engineer (General), Corporation of Chennai. The

Building Applications for Special Buildings and Multi-

storeyed Buildings are scrutinized and if they comply

with building rules framed under the C.C.M.C. they

are placed by the City Engineer to the chief Engineer

(General) for sanction. Wherever there is any conflict

between Development Control Rules and Building

Rules, the Development Control Rules shall prevail as

per T. & C.P. Act. As far as the factory buildings are

concerned, the planning permission and building

permits are issued by the Commissioner, Corporation

of Chennai as provided under Sec.288 of C.C.M.C.

Act. The City Engineer of Corporation of Chennai

sanctions the Planning Permission Applications and

Building Applications for ordinary buildings.

INTERACTION WITH C.M.D.A. The Chief

Engineer (General) of Corporation of Chennai is a

member of the multi storeyed building panel and

attends the panel meetings at C.M.D.A. The City

Engineer is the member of the Technical Committee

recommending the reclassification applications and

attends the meeting of the Technical Committee at C.M.D.A.

enacted in both cities, this has not addressed the key issue of local control and accountability of

parastatals agencies. In the Chennai case, the JDC constituted during the mayor's first tenure

through a Government order is one of the measures to enhance municipality's control over

parastatal activities. Chaired by the mayor, it had representation of senior bureaucrats of parastatal

agencies, civic groups, and councilors. It served as a useful platform for CMC to coordinate with

parastatal agency. However it did not make much of difference in influencing policy issues. While

it is a useful first step towards municipal

enhancement, such measures do not make much

of a difference to strengthen local representatives.

The comments of senior bureaucrats at the CMDA

and the TNSCB are revealing.

“… The JDC was a useful platform…

(Mayor) was coordinating it well… but it

was represented by bureaucrats … my

boss is the minister … my role as a

chairman is only advisory … ultimate

decision is with the minister…… The

mayor is on the board of CMDA… he does

raise difficult issues for us in terms of

transferring planning powers to

municipality and regarding market

complex in Koyambedu. Political

adjustments are there … my minister may

allow some concessions… equally, beyond

a certain point (mayor) hands are tied …

for a minister is superior to a mayor and

(mayor) has the compulsion to adhere to

political traditions”

(Interview with senior bureaucrat,

Chennai)

Further, as the JDC is constituted via a

government order (rather than emerging from

legislation) it is easy for ruling party at the State

to close this down or dilute its effectiveness if

needed. For example, the present municipal

council has a DMK mayor, with an ADMK

dominated council and the ADMK at the state

level. Until state power passed from DMK to the

present ADMK party, the mayor is said to have

had significant control over the council. After that

the council has ceased to function. A second

interesting aspect is the politics behind the

constitution of JDC in Chennai. Senior

bureaucrats and senior politicians argue that the

local government was able to constitute the joint

Solomon Benjamin

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17

development council due to political situation at that time and also the power of mayor within the

party system.

“…it must be recalled that historically Tamilnadu state government, in particular the then

DMK chief minister had reservations about the 74th

amendment changes. It was perceived

… as a mechanism for center’s control over state parties… though (the state) accepted (it)

grudgingly… The ex mayor was able to bring changes … but his power is derived largely

out of the system. To put it crudely, it was a “father-son” council. The ruling party at the

state and the local level was the DMK. Second was the party dynamics within DMK,

especially the struggle for succession to the present party president. … the mayor was a

favored candidate… he was the son of the chief minister. .. it gave him the proximity to

other state ministers … Furthermore there was a DMK minister at the center… in addition,

he was able to control councilors via the party system.”

(Interview with a senior bureaucrat preferring to be anonymous on this issue)

This raises a question whether in contexts like Chennai, instituting instruments such as the JDC can

be counter-productive for local representatives, as they can allow parties to manipulate them via the

mayorviii

.

“… (S) ran his party like a mafia leader… however, he was able to resist party pressures

when it came to policy decisions… there was enormous pressure from his own councilors to

avoid increase in property tax. But he was able to overcome it and introduce the necessary

changes … in case of conflicts between CMDA and CMC he was never afraid or

constrained from disciplining the councilors….”

(Ibid).

Our conclusion is that on some issues like those of parastatals, there are few options but to place

them under direct and clear-cut control under local bodies. Second, as in the case of Karnataka,

resist the pressures to institute them for even smaller towns. This however, may remain a

theoretical question since the main reason for their existence is a political one in the contexts of

globalised cities.

Erosion of municipal Autonomy

Box 3: Excerpt from the LC Jain commission on the 74th

. CA in Tamilnadu

In the beginning of this text, we had suggested that municipal government provides an

"autonomous" political space for local representatives. With the advent of parastatal agencies, this

space is eroded to jeopardize job providing local economies and the political clout of local leaders.

This is reflected in the growing tendency of state parties to control the council process via special

projects as will be explained later. In Chennai, the prolonged absence of council for a period of 23

years has weakened councilors' position. A majority of councilors in the present council lack

experience to maneuver around the complex rules of the system. They rely heavily on field

bureaucrat. To pressure them, they depend on the party structure for support. This dependence on

both bureaucracy and the party reinforces the fragile status of councilors.

... In this system the councilor has virtually no power... the municipality is telling us that

here is no fund. We being close to the field level, have the capacity to ensure that citizens

abide by the rules and pay the taxes. But we have no authority to collect taxes... councilors

problem ... arise ... from lack of information and bureaucratic control... at the zonal

committee meeting, I keep telling my junior engineer that we should propose some works ...

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18

but his constant reply to us is "madam, we do not have any money... it will not work.... I

depend on him for the plans and estimates to be submitted to zonal committee. So far, we

have not submitted any plans for development....I am friendly with the present ADMK

chairman, and that is why I am able to get some funds for ward development.

(Councilor of ward 147 Chennai)

Another important factor that weakens the councilors position in such systems is the internal

institutional dynamics that shapes the form of alliances. At the central office, the council does not

have much control over senior bureaucrats who draw their support from the state and the mayor.

This is linked to lack of institutional procedures, which in turn relates to the larger issue of

supercession of municipality for nearly 23 years. While Bangalore has evolved procedures to

bridge across political fractures, for example in the allocation of ward budgets between the central

and peripheral wards, Chennai has no such systems. Budgetary allocation for a particular ward is

decided at the zonal level, which is then subjected to final approval by the council. Further more,

under the present system the mayor being elected independently has veto powers over council

decisions and often tends to ally with the senior bureaucrats. Much of the key institutional

decisions are resolved at the level of mayor and the commissioner. This allows for parties and at

times the Chief minister to control both the councilors and the mayor. A comment by one of senior

bureaucrat and party politicians on council process is revealing.

Irrespective of the party controlling the council, the higher-level party cadres influence

development programs. In the case of DMK government, the Mayor controlled the council

and in the present government it appears to be directed by the chief minister. For example,

the flyover construction under mega city program in different part of the city, undertaken by

Stalin, during his regime, was aborted not immediately with the change of state government

but with the present chief minister assuming office.

Domination of chief minister over municipal process was also suggested in our interviews with

both ruling party and opposition party councilors.

" Flyover construction is a criminal waste of municipal resources... the mayor has wasted a

lot of municipal resources... amma has come and stopped these programs... she has an

excellent program for resolving the water problem of the city...she is the one who

introduced rainwater harvesting program in the city"

(ADMK Councilor of Sadiapet Ward, Chennai)

Interestingly, the council approved the flyover implementation. However, as one opposition

councilor pointed out, a council resolution need not necessarily be a broad-based consensus:

The council meets once a month and always has to do quite a lot of business. In every

council meeting, it has become a tradition of both the parties hitting at each other,

culminating in the opposition DMK party walking out during the voting … that leaves the

ADMK to vote… there is a party whip that all ADMK members have to attend the council

meeting and vote in support of party policies … so a councilor and that too an opposition

councilor from parties such as BJP with 3 members have to fight to get information or a

chance to debate in the assembly. On top of it 33% of the seats are women and that is a

good 50. Most of us are new both to the council and the party. That also helps party

structure to easily control the councilors” ... during DMK's rule the situation was not very

different. The ADMK members used to abstain during voting, and the BJP has an alliance

Solomon Benjamin

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19

at the center with the DMK. Irrespective of the council discussion, both parties dictate

voting behavior"

(Councilor of Ward 147, CCMC)

Supercession of municipal council did not allow the emergence of reciprocal relationship within

the party structure. The MLAs control constituencies directly through local leaders resulting in the

councilors being dependent on the party banner and the MLAs for their votes rather than the other

way round. As councilors are all new entrants they do not have strong links with their constituents

to further entrench their dependency on the party structure.

In comparison, the councilors in Bangalore enjoy some autonomy within the council. The

uninterrupted functioning of council enabled them to consolidate their position within the party and

also put in place institutional procedures. For example, they were able to negotiate for a system of

budget allocation based on the development status of the wards (Interview with Rame Gowda, Ex-

councilor, Standing Committee Chairman, and Bangalore City Corporation). Councilors

irrespective of party affiliation have access to significant sum for infrastructure investments in their

ward. Access to this budget is important in consolidating their electoral base at the ward level, and

in turn for autonomy within the party structure discussed in the later section. Furthermore, the

established relationship between bureaucracy and many of the councilors and knowledge acquired

over the years, render it difficult for the latter to dominate them. In contrast to Chennai with its

strong Commissioner (and Mayor alliance) the BCC has had a string of commissioners, changed as

a result of strong local political pressures. Its Mayor, although selected by the party system, has

tenure of only a year.

In Bangalore, although procedures are in place and councillors positions are relatively empowered,

council is rendered ineffectual through larger parastatal structures mentioned above. For example,

specialized cells were created within the municipality for the implementation of mega city

programs in Bangalore, infrastructure projects in Chennai. These projects were monitored directly

by their designate parastatals and in cases, directly by the private corporate sector. The role of the

council was limited to secondary level accounting procedures. Interestingly, such centralized

control is reinforced by the guidelines of the projects to ensure "accountability". The council had

no say in the design of such projects. Further, intervening in project implementation is equally

difficult as it was controlled by senior bureaucrats often with the support of high ranking ministers.

Another more serious development is the monitoring of corporation by external bodies such as

Bangalore Agenda Task Force (BATF). This force dominated by corporate members supported by

chief minister to fix targets for state agencies including the Bangalore City corporation.

The impact of such centralizing control is severe on the poor as they find it difficult to contest such

decision-making. In Bangalore for instance, specially targeted are commercial structures, apart

from blocking efforts at regularization. In the case of Chennai, uhe ELRTS resulted in large-scale

evictions of squatter settlements. A quote by a party activist in Mylapore is useful:

"...For the ELRTS project, around 5000 families have been shifted from Mylapore and its

neighboring ward … they have been sent to three different locations… even now Langford

garden

is going to be shifted… they say the Mylapore bus terminus is going to shift there… MLA

cannot do anything.. for Langford garden people, he has talked to the concerned

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20

organization and bought some time…eventually they'll be shifted…but we help the poor …

make sure their names are on the list of evictees so that they at least get a house in the new

area… “

Another situation in the Chennai case is the trend to "clean up" the city -- again affecting a large

number of the poor on their economic front. Along with this institutionalization that creates an

illusion of "a planned city", there is a re-definition of legality. Initially, the interventions of courts

were sought by the poor to protect occupancy rights and in effect maintain a diversity of tenure that

fitted well with the general regularization policies. With the promotion of mega projects, the

institutional emphasis is on homogenizing tenure and claims. The courts are drawn upon by public

authorities to enforce middle and upper income groups claims to contested locations as a way to

create an urban setting conducive to them. A quote from an interview with BJP district Secretary

on the situation of hawkers is revealing:

"…Hawkers around the temple tank … also going to be shifted… nothing can be done (by

us)… there is a court order that the government has to implement…"

In Bangalore, it is significant that the BDA used strategies of initiating demolitions on a weekend

so as to avoid the aggrieved party to obtain a stay. Another was to initiate the process during the

day when mostly women and children would be present. When the public suggested that the BDA

should clearly identify plots especially under "re-conveyance" prior to demolition, the BDA

responded that this responsibility was that of the public. This suggests that both the political arena

and also legal space is stacked against them.

Structures of finance reflects forms of control

This section illustrates how finance can be used as mechanism for control and for capture of

municipal arena by higher level state agencies and the private players. Earlier, in most cities,

municipalities controlled infrastructure financing and development. They drew both on general

municipal funds and also on developmental charges imposed for land development as new land was

privately settled. Some municipalities, like Kanchipuram in Tamilnadu, directly drew on domestic

funds like the Life Insurance Corporation (LIC) to fund development. Not only are interest rates

lower by a substantial amount -- between 8 to 10 points (NIUA 2000), but there was still local

control over the investments of funds. Subsequently, when city improvement trusts were created

within local governments (as in Bangalore and Chennai), there was still a close working

relationship and direct political control. This situation also allowed for "community based"

partnerships wherein local associations seeking infrastructure improvements would collaborate on

joint funding and at times including a contribution from the councilors allocations. All this was also

possible since service provision was an integral function of municipalities as in Chennai or as a

separate undertaking under the control of municipality as in the case of Delhi. In effect, this

institutional relationship allowed them to co-ordinate city development and respond to electoral

demands.

In the 1970's and 80's, the responsibility for infrastructure development was shifted to parastatal

agencies. Parastatals, drawing finances from the state (as in Bangalore) or from external aid

agencies (as in Chennai), opened up avenues for the latter to control city development. With this

shift municipalities lost out on both economic and political fronts: on the economic front,

municipalities lost out on ways to tap urbanization gains via development charges and politically

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on their strategic local control over development as pointed out by Kanchipuram Council

Chairman,

"…Kanchi is famous for its nine temples … bringing in substantial revenue. However, the

municipality does not benefit from it. The temples are under the archaeology department.

The tourist tax goes to the central government. Although the city generates substantial

revenue through tourism the municipality do not benefit from it. In addition, land

development beyond G+1 is regulated by the state government… that also cuts out a main

source of revenue, which the municipality could have earned. If all these removed, and

then we are asked to go to the market for loans. What is the logic? Instead we prefer to tap

the different … revenue streams rather than take loan and burden the municipality"

(Chairman, Kanchi Municipality)

Have infrastructure financing patterns since the 1990s, further disadvantaged municipalities? This

is a political question and our evidence on this issue is very preliminary given the absolute lack of

information. This is not only due to its complex technical nature or recentness, but mainly due to

non-transparent institutional structures and lack of involvement of elected representatives on this

issue. However, even on the strength of existing evidence, there seems an important case to merit

more detailed and specific research. Large scale interventions are promoted based on two

assumptions. One is that large investments are required to make city's competitive in the global

arena. Second is that large cities need mega infrastructure project to deal with their problems. In

many ways, the Central Goevrnment's "MegaCity Scheme" is centered around the core of these

ideas and justifying the focus on the scale by specifically disqualifying local projects that are

ordinarily handled by municipal bodies (NIUA: 04). This goes against the sprit of the 74th. CA --

and formulated in the same time period of 1992, and there is also little empirical research available

to support such technical rational. Furthermore, its actual operation suggests that the stress was on

"municipal reform" rather than the creation of infrastructure as purported in the original idea -- an

issue we shall see, may impose greater political control.

The following box traces the patterns of infrastructure financing and development in Chennai.

Chennai, drew on external aid for infrastructure finance which was routed through the Chennai

Metropolitan Development Authority. As can be inferred from the box below, aid agencies and

central governments have a greater influence on policies.

Financing and implications for policy

Infrastructure Development in Chennai was financed via three major urban development projects

in Chennai since 1975. The Madras Urban Development Program (MUDP) 1, MUDP 2 and

subsequently Tamilnadu Urban Development Program (TNUDP 1) were implemented with World

Bank assistance. Funds were routed via The Chennai Metropolitan Development Authority

(CMDA), which was responsible for project planning and monitoring. With TNDUP1, a special

project management cell was created within CMDA and a separate Madras urban Municipal Fund

(MUDF) for use of project funds.

With the completion of the project in 1996, the World Bank initiated a shift in policy to promote

public-private partnership. It led to the creation of intermediary institutions such as Tamilnadu

Urban Finance Infrastructure Services Limited (TUFISIL). In parallel, the state government

instituted a parastatal agency Tamilnadu Urban Finance for Infrastructure Corporation

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(TUFICO). Besides these two, there are other financial intermediaries for specific sectoral projects

such as Tamilnadu Power Finance Corporation (TPFC);

Both institutions draw part of their finance from private markets, who are attracted to invest given

the low risk, high levels of non-performing assets and the economic slowdown The rest is from

international capital and state funds. The World Bank has provided TUFISIL with a grant capital,

while TUFICO has access to central and state government grants.

TUFISIL is registered as a private trust, and is headed by an ex- bureaucrat. Besides the

Government of Tamilnadu, the other main partners are the ICICI, HDFC and IL&FS. The former

own 49% of the share and the rest by other three partners. GOTN is represented in the trust board

by the Chief secretary of Tamilnadu and the secretaries of Chennai Metropolitan Development

Authority, Finance, Housing & Urban Development and DMA. Its main objectives are:

• Strengthening the managerial, financial, and technical capacity of urban local bodies

through an institutional development program.

• Mobilizing resources for basic urban infrastructure investments (water supply,

sewerage and sanitation; solid waste management; drains road transport; street lighting etc.,)

from the capital market

• Securing sustainable funding sources for the urban infrastructure investments through

TNUDF and municipal bond issuance beyond the Bank's line of credit operations

TUFISIL lends directly to municipalities, in most cases with guarantees from the state government.

In order to ensure regular repayment, municipality's accounts are escrowed. Escrowing meaning

"intercept" allows TUFISIL to have first access to funds that reach the municipal accounts to cover

their risks and is instituted through an agreement with the bank. Although loans are sanctioned

only after the council meeting, the reality is that substantive decisions are not open to a council

debate, where the entire consequences of such loan are debated and miniuted. One of the

councilors pointed that often such controversial decisions are slipped in as part of larger grouping

of issues, with the result not many councilors are aware of the implications. Given the widespread

civic implications there is no procedure that allows for broader public debate.

Our initial investigation in Chennai and to some extent in Bangalore, raises the following issues.

Local Accountability: In the 90s, in addition to higher-level state institutions, private actors are

emerging as key players in urban areas. Municipalities as in the case of Tamilnadu are increasingly

pushed to source funding from capital markets. Institutional forms via which the funds are routed

may take the forms of (a) project specific parastatal (PSP), and (b) public-private partnership

agencies (PPP). In both the cases, several issues are involved. First is that of local accountability

(and political control). Parastatals, as we described earlier, have no electoral mandate, and are

controlled bureaucrats as advised by external consultants with little systemic accountability to the

elected body.

Table 1 Impact on poor groups and their livelihoods as a result of a Mega Project in

Bangalore Excerpt from Benjamin and Bhuvaneswari (2000: 138)

Actors Before the implementation

of Mega Projects

After the implementation of Mega

projects

Retail traders More business transactions

due to clustering of

wholesale and retail

-Not even 10% of previous sales

transaction is taking place.

- No security from “anti-social groups”

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business in one place.

Access to different clientele

group - especially the

floating population in the

market.

Low rents.

and no parking.

- Sharp rise in rent and also lumpsum

amount required for advance.

- Clientele limited to regular customers

mostly the bulk buyers. The majority

clientele of small buyers are cut off.

-Whole sale shops increased from 108 to

300.

Hawkers Income = Rs.150-200 after

food and bribe expenses.

Fewer hawkers in the ward

Low cost of trading due to

Less police harassment and

clustering of businesses

under a single roof.

More business opportunities

partly due to clustering.

-Carries home between Rs. 50 and 80/-

daily (after bribing).

-Increase in competition among the

hawkers pushed out from other

locations.

-Increased competition with retailers

and consequent conflicts.

- Less business (previously all the

markets were situated at one place but it

is situated to different place) due to

spilling up of markets.

- Increase in the cost of trading due to

erratic police raids and BCC raids.

Hike in the cost of bribes.

Coolies

Shop coolies

Head-loader

Market

coolies

Organized and negotiated

for income with

shopkeepers.

Fluctuating income

dependent on floating

population.

Income stability for those

connected to particular

shops.

Those not connected

depended on floating

population – unstable

incomes.

No significant change

Increase in income due to dispersal of

markets since the hawkers now depend

on them.

Initially, a decrease in income and

opportunities for shop coolies. However,

most moved to be become head coolies

where they can charge more but face

unstable incomes.

In the case of the Mega-City Scheme too, it is significant that the constituent clearing committees

responsible for the operational features have mainly bureaucrats with little real or strategic role for

the elected body (NIUA:13-14). The case is almost of bureaucracy and technocracy heavy

parastatals or dis-empowered local bodies proposing projects, which presuppose a particular large

project centric development agenda, being reviewed by even higher level and powerful

bureaucratic bodies. It is significant that a key issue has been the repayment of mega city funds

since these are pitched at much higher rates (at 15% -- 17% from ICICI and IDFC + 2% as a cover

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The pavement hawkers claim that before the flyover

construction and the market complex, for an investment

of Rs.100 per day, they earned between Rs.150 to

Rs.200. After the urban renewal, this has now reduced

to between Rs.60-80 per day. Also, they are also no

longer sure of the possibility of doing business on a

regular basis. Police harassment has increased and so is

the bribe amount paid to the lower level corporation

inspectors. At the time of the study our team witnessed

one such incident of police raid. A few miniutes before

our arrival at the scene, a policeman thrashed one of the

women hawkers and collected Rs. 25 in the morning. We

also saw in front of us, a poor person buying vegetables

from a hawker adjacent to the women hawker being

beaten up and being spat upon. Later in the afternoon,

when we passed that location, we found that the Sub

Inspector came once again, objected to the trade, seized

the goods and thrashed the hawkers. Our team members

met the woman who was beaten up earlier that morning

three hours later. She was still waiting with her basket,

hoping to do business in the afternoon. She hoped that a

new policeman that would come in the afternoon would

allow her to do trading. We found that this was now the

norm, where hawkers like her were raided in the

morning, and waited for the change in shift in the

afternoon to undertake trading. Thus, half the day was

spent with no business and if anyone tried to buy any of

their wares, they risked being beaten (like the person we

witnessed)1. However, there are days when hawkers

have to wait till late evening for starting their business.

They claim that prior to the flyover construction and the

new market complex, they were earning between Rs.150

to Rs. 200 and!at times, between Rs. 200 to Rs. 250.

This has now reduced to Rs.60 to Rs. 80 per day. Also,

the un stability in business is a serious issue. According

to one of the hawker leaders:

"In the past, for an investment of Rs. 50, I was able to

earn a profit of Rs.60 after all the expenses. The bribe to

the authorities used to be Rs.2 and 0.50p respectively for

the police and the BCC officials. Now the bribes paid

are Rs.5 per vendor for one shift a day. Each vendor has

to pay for three shifts. This is in addition to the weekly

bribes to the Sub inspector. The police increased the

daily commission (Mamul) from Rs 5 to Rs.10 arguing

that the shopkeepers are paying rent to the corporation

which the foot path vendors do not pay. Also, sales are

no longer guaranteed. There are days when I return back

home with no income. Now if I invest Rs.1000, I earn

only Rs 150 after two days ".

for a State Guarantee) that those

available from HUDCO or LIC (at

12% to even 8%). Where the financial

performance of the projects undertaken

under this scheme has been rated as

excellent, -- as in Bangalore, it is

significant that these same projects

have either seriously threatened the

fiscal health of the local body,

contributed to the increasing state

deficit, and / or been regressive to the

poorest of citizens who use the city as

an economic setting. This last point

relates to the key issue of how local

bodies or parastatals on their behalf

view ways to raise funds to pay such

expensive finance -- leading to the

issue of reform. Table 7 in the NIUA

documents (NIUA: 30) provides a key

Box 4: Excerpt from from

Benjamin and Bhuvaneswari

(2000: 138): Urban renewal:

Of lost incomes, increased

bribes, and court-room

“proxies".

illustration of this process. It is here

that we see many of the institutional

contradictions emerging. The issue

here is not only one of increasing user

charges, to "use land as a resource" but

rather the creation of new parastatals

(as the KUIDFC in Karnataka) and in

the case of Tamil Nadu -- enacting

new legislation that dilutes the pro-

active provisions of the Tamil Nadu

Urban Local Bodies Act (1998) to

empower the CMDA. Thus, the form

of institutional re-structuring is at the

core of the issue -- and with this as we

discuss below, comes new forms of

centralized political control.

In the case of PPPs, control seems to

be established over municipalities


25

seems more sophisticated. Such institutional forms, as in the TUFISIL described below, is

complex. Although registered as a private agency, it is dominated by state level bureaucrats and aid

agencies. If this includes a state administrative representative, presumably to ensure a public

mandate, there seems little reason as to why there should be no political representative. TUFISIL,

for example is structured both as a trust and as a private business undertaking. At one level, we

were given to understand such institutional structures reduce corporate / income tax burdens. We

are concerned with the larger accountability issue - of taking refuge in the private domain but being

able to access public funds and influence public policies on the utilization of such funds. The point

is not that role of private financing institutions is not important but control should remain with local

elected representatives to ensure that such funds are utilized in ways that are responsive to local

needs. It is significant to mention the experience of Alandur municipality within Chennai

Metropolitan area, wherein the council decided to reduce the

loan burden by sourcing community contribution. In this

context, the Chairman involved boti TUFISIL and TUFICO,

with a lead role. In this the chairman of the council played a

key role in building the bridges between the community and

the different institutions.

Weakening Municipal Control: Does the present structure

with little local accountability, allow for greater control and

"capture" by private groups? An assumption guiding both

PSP and PPP is that municipalities lack technical capacity to

design projects and to monitor them. A key issue here is that

of control. For instance, even if some part of the project

requires a high degree of technical sophistication, the

specialized group appointed could report to the

municipality. Prima facie, it seems that project design is

hence taken out of municipal control, allowing for private

consultants and higher levels of government to dominate.

We refer to an experience of Kanchipuram municipality.

Kanchipuram has had a history of borrowing from

the Life Insurance Corporation. In the case of

TNUDP, the design was done by Tamilnadu Water

supply Board (TWSSB) and money was directly

transferred from GoTN to TWSSB from our

Devolution funds… this was directly adjusted for

loan repayment during the last financial year. The

municipality had no control over design or

implementation. Once TWSB left the scene, we were

not able to draw water via those pipe line on

account of design fault. However we are saddled

with the loan. We are paying for something, which we do not benefit …

(Source : Commissioner, GoTN)

Box 4. Continued

For instance, Mr. Kamraj is a fruit

hawker on the pavement outside

the market and living here for the

past 25 years. 1990 onwards, he

started his own business. In the old

market, if he invested Rs 500 he

would get Rs 100 to Rs. 200 as a

net profit after meeting all the

expenses (such as food and bribing

the officials). Bribes in those times

were lower for the police and BCC

officials – Rs.1 to Rs.2/. At present,

this has worsened. On the day

when interviewing him, 15th March

2000, he invested Rs.500 and by

11.30 am earned Rs. 50. Out of

this he paid Rs.10 to the police and

BCC officials. Later in the day

there was a police raid and

business got disrupted. While it is

also true that there were fewer

sellers then and more buyers in the

old market, he feels that he led a

comfortable life before the new

market was constructed. He also

feels that other pavement hawkers

too have been affected and are no

longer sure of a regular income.

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Furthermore, loan conditionality may impose forms of "reforms" that may not emerge out of a

public process. For instance, in the context of our preceding discussions, seemingly technical issues

(accounting procedures and relationships, computerization) could have serious political

implications in the way they alienate local elected representatives from decision-making. The issue

is not one of relevance or urgency of such reforms but the way decisions are influenced. If these

are thrust on municipalities from above, they could seriously weaken local "voice" both politicians

and through them the general public. Important here is the link of some of the key private

financiers (eg. IDFC) with aid agencies such as the World Bank / USAID and through the latter to

other private investor bodies like the US Realtors association seeking higher and secure returns.

Since these involve some form of central government clearances, an issue here is opening up the

financial system to much higher levels of political control.

One example is the manipulation of local councils via devolution funds. These are an important

source for loan repayment and for raising matching municipal contribution. This in effect allows

for the ruling parties at the state to delay project implementation in municipalities led by opposition

parties, as it happened in Alandur municipality.

"The water supply and drainage project was promoted by the chairman …along wit the

then commissioner. The former belongs to DMK, and had filed public interest litigation

contesting the election result of the present chief minister. The commissioner who worked

then on the project has been changed and the present commissioner - an AIADMK

representative do not have a cordial relationship with the chairman. On account of this

political situation, the project has been delayed… Although the State government do not

have the capacity to stop the devolution fund, enough damage can be done by delaying the

project".

(Senior official, TUFISIL)

Manipulation of institutional structures by party politics, though not unusual, the question here

relates to the undermining of municipal autonomy via such institutional structures. Institutional

mechanisms such as TUFISIL and TUFICO are justified as "necessary as they impart financial

discipline on the municipalities". However the influence of state level bureaucrats on the board of

TUFISIL for example, together with the control of ruling parties over devolution funds raises

questions for a municipality's autonomy.

Economic Impacts on Municipality

Third, is the implication for municipalities finance in terms of costs and risks? Loans are offered at

rates above the market rate raising the issue if local bodies can directly access the market without

institutional mediation. A chartered accountant in looking at the documents we collected raised an

issue on the cost of the loan. While loans are offered on the market for rates varying between 10-

12%, and on the international market at about 2%, it seems strange that loans to municipalities are

offered at rates above 12% and upto 16%.

Between the different financing institutions there is considerable difference in the lending

rates. … there are interest advantages between the two organizations. Whereas TUFISIL

loans are given at 16%, TUFICO's lending rate is around 12%. But the mechanism of loan

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repayment is the same ... escrowing the municipal account or adjusting the state devolution

fund against these loans...

(Commissioner, Kanchi Municipality)

When this was raised with a private financing institution, they pointed to the lack of

creditworthiness of many municipalities. However, creditworthiness appear to be not a clear cut

issue as it made out to be. As the same CA who looked at the report commented,

"… Many private companies with high losses of above 96 crores are rated under AA+ the

highest credit rating, such accreditation need not reflect the actual financial health of a

particular institution"

This seems important since informants suggest that there is substantial amount of finance available

with private infrastructure companies. With liberalization the market is opened up for large market

players such as the ICICI, IDFC, HDFC and IL&FC to tap domestic and international capital (often

routed in parallel to development aid). Significantly, the Mega City Scheme promoted by the

Central Government is key to open up the institutional system to these financial intermediaries --

rather than strengthen the operational systems of institutions like the LIC and HUDCO which local

bodies could directly approach. The experience of Kanchipuram municipality, in Tamilnadu is

revealing.

"… We were not keen to take up loans from finance institutions. TUFIDCO's earlier

proposal ran upto 1.5 crores which has been slashed by the council to 25 lakhs - to those

items which are perceived to be absolutely essential…"

(Chairman, Kanchi Municipality)

Experience of TUFISIL during the creation of pool financing mechanism corroborates the

possibility of municipalities being pushed to take loans that are not necessarily favorable.

"In the creation of pool financing, TUFISIL obtained 50% guarantee from (an aid agency)

... There was pressure from the concerned funding agency to take a financing institution as

another guarantor. However the cost of guarantee was quite high ... it could avoided only

because the Government of Tamilnadu came forward to be the second guarantor. Most

infrastructure financing companies such as IDFC are loaded with funds but not many

takers. Consequently, cash starved municipalities are pressurized to take loans irrespective

of their future health. As the state stands as a guarantee for most of these loans, the finance

institutions are assured of getting back their finances".

(Senior official, GoTN)

Linked to this is the issue of risks. While the costs of loans especially via PPPs are high, risks are

borne alone by the municipality. This is more serious when municipalities already face a fund

crunch in terms of in-adequate central / state transfers and political pressures from under-serviced

settlements. Financing institutions protect their loans through mechanisms such as "escrowing"

municipal accounts and a state government guarantee. In most cases, loan repayments are anyway

adjusted against state government transfers to local government. According to a TUFISIL official,

in case of a state guarantee

"There is always a guarantee to get back the loan from devolution funds".

(Senior official, TUFISIL)

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Although in the case of Chennai municipality, the officials were not willing to comment on

repayment arrangements for TUGISIL and TUFICO loans, the use of devolution funds for loan

repayment was confirmed from other municipalities.

Mechanisms of escrowing and the adjustment of these loans against transfers imply that

municipalities could lose their control over their own funds. Discussions with councilors in

Chennai indicate that often many are not aware of the loan repayments through escrowing of

municipal accounts. Knowledge of financing of major infrastructure projects seems to be limited

to the higher-level bureaucrats and few elected representatives. While a common counter argument

is that the councilors are not interested in city wide issues, and tend to think and act in a partisan

way, it still remains that knowledge about such projects are taken out of the public domain. Also,

there are few instances as in the case of Alandur mentioned above where the council could take a

lead role in deciding on nature of investments.

Conclusion

Our description of the political milieus shaped by institutional relationships and in particular by

that of municipal body and parastatal agencies raise several questions of responding to social

change: where poor groups feel empowered, are able to secure stable livelihoods, legitimately

claim public investments especially in basic infrastructure, and are able to secure claims to

locations that help them move out of poverty. One set of questions is constitutional in nature. To

what extent can the 74th amendment expect to empower local representatives and governments?

Are centrally driven constitutional amendments capable of creating an environment for progressive

change? More generally, is it realistic to expect legislators, administrators, constitution writes to

frame “water-tight” rational frameworks and institutional structures to counter regressive politics?

Or is it that one’s actions need to be necessarily embedded in this politics to internally strive for

change. This relates thematically to the argument by Flyvbjerg:

“Modernity relies on rationality as the main means for making democracy work.

Constitution writing and institutional reform are the main means of actions, in theory as

well as in practice, in the modernist strategy of developing democracy by relying on

rationality against power.. While power produces rationality and rationality produces

power, … power has a clear tendency to dominate rationality in the dynamic and

overlapping relationship between the two……. But if the interrelations between rationality

and power are even remotely close to the asymmetrical relationship … then rationality is

such a weak form of power that democracy built on rationality will be weak, too..” (p: 234)

Insights from Bangalore and Chennai show that legal backing alone is not sufficient for municipal

empowerment. Pressure for legislative change has to emerge from the grassroots shaped

necessarily by conflict and that this happens over a longer term.

In many ways, this relates closely to the issue raised by that of Justice Krishna Iyer in his public

lectures on “judicial activism” and specifically in an essay on methods and approaches to select the

chief justice9. These are in the context of the serious regressive impact on the poor by rulings from

9 “The Indian judicature” by V.R. KRISHNA IYER in Frontline, Volume 19 - Issue 11, May 25 - June 07, 2002


29

higher-level courts including the Supreme Court, and cases of corruption among the judiciary10

.

The issue is not the anti-poor judgments pronounced but the “rational” and procedure used to

develop that rationality used. It is hardly surprising that at the center of this controversial judicial

activism is in fact the normative planning process and that too, promoted by Development

Authorities in the most un-democratic fashion and centered around one of the most authoritarian

legislation namely the land acquisition act. If so, than legislation and the actual operation of law

must focus on the way it shapes political space around municipal government and be reflected in

day to day operational procedures. The focus must be in a sense – “law in process” shaped by a

dynamic of civic action and political change.

The second set of questions relates to the limitations and real scope of techno-managerial

approaches. We have addressed this issue adequately in the main text and annex (the approach of

the Mega City Scheme, and the ELRTS in Bangalore). Our intention here is to underline the point

that it is not only the practice and technical arrangements but rather the location and institutional

structures from which these are practiced from. In this context, “reform” and development aid

being channelized via autocratic development authorities are likely to be counter-productive. This

is just as simplistic as assuming that promoting civic participation and consultations via select

NGOs is likely to represent “public voice” and act as a forum for it. In both cases, the arena again

must be municipal – of control if not of operational location. This is most likely to help techno-

managerial approaches to be shaped by the locality of the issue. Note that we do not argue against

technocracy. Cities are increasingly complex systems but this does not mean that technocracy

raises itself above the civic – political domain.

The third set of questions relates to forms of economic development. Here, there is an urgent need

for policy makers to recognize the complexity and value of local economic systems rather than be

enamored by the big, beautiful, and simple. Perhaps technocratic policy makers in fractured society

will always do so, and the question may be the setting, which forces a more local below your nose

attitude. The political construct of choosing the high ground – away from local claims and

promotion of expensive and regressive mega projects that come with this can only be addressed via

political pressure and accountability.

In essence, we return to Ferguson’s anti-politics machine and in specific it’s institutional and

political underpinnings. Such a machine could be seen to be constituted by the conventional

process of planning, what is presently mainstream judicial activism, popular notions of civic

society organized neatly via NGOs, and promotion of corporate economies – all forming an anti-

politics machinery set to subdue an activist and locally responsive political arena centered around

municipal government. We also return to the need to understand power relationships as they

operate in real life for poor groups as active agents. Commissions setup to review progress on the

74th

. CA can focus even more closely on the operational relationships and terrain of parastatals and

specifically on land issues. Activism to be moved not only by advocacy driven from a moral high

ground, but rather from a more sensitive understanding of micro-level strategies and the importance

of “stealth”. In parallel, be more sensitive of the local political process.

There are other broader questions to be addressed:

10

We refer to the series of pronouncements made in High Courts in metro cities which effectively criminalize vast

groups of poor from accessing land and sources of employment in small and tiny trade and manufacturing activities.


30

• Does the emerging forms of economic globalization, spur a self-reinforcing political and

institutional process forming the mechanics of the anti-political machinery?

• Is the persistence of parastatals related to the way cities address two forces: One an

increasingly globalised and influential elite, and another, a trend towards high

centralization if not authoritarian party politics.

• Are these related to the way Indian metros fracture along enclaves for the rich and ghettos

for the poor?

• Is contemporary urban poverty closely related to reduced voice and weakened claims of the

poorest as brought about by fractured institutional access?

If so, than,

• The issue of urban poverty goes beyond focusing narrowly on incomes but rather

attempting to understand the underlying institutional dynamics of urban space being

shaped into differentiated economic terrain.

• Is it not to stress the economic and political centrality of land issues in its urban dimensions

– rather than treat it only as a functional input?

• Is there not a need to focus more closely at the local political terrain as a significant arena

through which poor groups establish claims?

• Is there not a need to move beyond simplistic notions of a benign civil society valued as

“social capital” to understanding the institutional underpionings of a politicized civil

society?


31

Annex 1: Excerpt from Benjamin and Bhuvaneswari 2000: 'Democracy, inclusive

governance and poverty in Bangalore' Section 3 C

Today, in wards like Azad Nager, dominated by heterogeneous income groups and economic

interests, its politics is centered on variety of issues: Employment, land regularization and access to

institutions for licenses, government loans and business opportunities. At the level of the poorest

group however, politics still focuses on access to land. The situation is complicated due to the

complex crosscurrents at play. At one level, ethnic groups are set within increasingly expanding

and diversifying economies. The new economies also attract groups that are economically better off

and can pay higher rents as compared to the old settlers. The latter, being more established, seek

political and community support to reinforcing their claims on productive locations. Such trends

create tension between the different groups. All these conflicts are played out on the local political

arena and may take different forms - communal, caste, regional, linguistic, and trade politics.

These factors bring together as well as divide the different groups in the ward, contributing to the

emergence of flexible coalitions and shifting coalitions for political bargaining. In all this, as we

discuss below, the existence of a wider range of local leaders plays an important role in "spreading"

the representative process.

As economies consolidate and land is developed in wards like Azad Nager, a variety of

mechanisms of claim making emerge at different levels. These centered on the elected

representatives. At one level, this may seem hierarchical: Street leader, local leaders, Councilor and

the MLAs. Just as we suggested complex inter-linkages across ethnic and income groupings,

political relationships while broadly following this hierarchy often operate across these. Thus, the

broad structure is as follows. The councilors have links with MLAs (of the State Government) to

reinforce their claims in the political and administrative system. Next, councilors (and their

competitors from other political parties) have party workers operating as their representatives.

These local leaders come from the community. In turn, they act as a link to street leaders and office

bearers of associations (the "community") and the party political representatives. But this is not

always too straightforward. Starting from the community level, Street leaders here may approach

several party workers to test out their responsiveness to their demands. Interestingly enough, even

the party workers often maintain several affiliations to see at election time, what kind of deals are

they offered by their political bosses during election time. At times, the Street leaders may

approach the councilors directly or even the MLA if the issue warrants it. Similarly, a MLA might

choose to intervene at a local level by-passing the entire chain of command. In addition, ethnic, and

occupational affiliations shape political circuits. These situations are not to suggest complete chaos

but to make the point that the structure of claim making in wards like Azad Nager are flexible used

shaped by the extegencies of the moment. We feel that this helps to keep the politicians on their

toes rather than see it as a dis-functioning system. As we see in the illustrations below, political

agents in such an arena cannot afford to take chances. It is hardly surprising that during one of the

last by-elections, very senior party officials visited Valmiki Nager at the day of the voting to ensure

that this act was seen as support by the party to their candidate. The box below helps to illustrate

one such structure.

Box 5: Local Political Structure in wards of West Bangalore

There are three main competing political parties – the Janata Dal, Congress and the BJP in the

ward. RG, was one of the ex-councilors of the ward, was elected twice to the municipality on

Janata Dal party ticket. As his name suggests, Rame Gowda hails from the relatively higher


32

caste Gowda community, known for its political clout in the city. As the ward has a dominant

Gowda population, different parties field a Gowda candidate. This situation however, compels

political contestants to evolve strategies to woo other non-Gowda voters. In order to mobilize

votes structured along ethnic lines, higher level party politicians nurture a local leader that will

work for them. RG has the following leaders from the different communities working under him.

Ganesh and Imitiaz are two such local leaders. Gh is from the cobbler community and is a

lawyer by profession. His father was also a well-known local leader in the area. Consequently

Gh commands respect among his community members. Most of them being uneducated comes

to him for resolving institutional and personal conflicts. Similarly, Imitiaz as an "autolord," and

a financier, has contacts with different Muslim population and also a section of Hindus via his

professional contacts. Interestingly, Imitiaz also sees an alliance with the SC/ ST groups here

since he feels that his forefathers were once from this community and converted to Islam. During

one interview, the SC and the Muslims leader together claimed that their roots are the same.

One of the leaders Imitiaz stated

" We ... the local Muslims were originally SC. and were converted by Tipu Sultan. That is

why, when Chamrajpet was formed, the SC. and we were allotted relatively inferior part of

the layout. Our roads are smaller and there are no drains in comparison to the Gowda area".

We found such "consciousness" to be quite prevalent and it did not come from political

expediencies (while these might have certainly reinforced such beliefs). Thus, both local leaders

also use their respective associations, their religious background, and community consciousness

to mobilize votes.

Most of the residential associations found in the different residential layouts of the ward are not

registered. One of the residents claimed that previously there was at one time a registered

association in Bande Slum. This had membership from both Hindus and Muslims. The squatter

residents were dominated by Muslim community and few Hindus. Due to financial misuse,

politicians interfered into the association issue, and resulted in a big fight due to which the

association disintegrated. Following this, most slum residents contact councilors directly. This

may also be due to their stronger political clout and needs for civic infrastructure. Residents of

private layout approach councilors via local leaders. There are associations in the various

neighborhoods. These are organized along occupational lines. Often, a local leader would head

these. One example is the cobbler association. The cobblers in Valmikinagar, have a

co-operative society. It was registered in 1958 with 30 members. At present there are 130

members in the society. The registration helped they to access loans from the government to set

up showrooms. The members claim that even after they opened the showroom there is no

business, for many cobblers moved to other areas. At present the society got a mobile van from

government. Thus, an association is a nebulous concept and linked specifically to a particular

need rather than kept alive. Most establish direct contacts with the elected representatives –

councilors, MLAs and the ministers via their ethnic and occupational affiliations and the local

leader system. Elected representatives i.e. the councilors and the MLAs also maintain a direct

day to day contact with their constituencies.

Two intertwined factors are at work in nurturing political structures. The first is related to the

dialectics operating at the level of the larger society, and between the different ethnic groups which

contributed to the emergence of flexible and shifting coalition. While at one level, the ethnic,

income and occupational diversity fracture the different groups, they also foster complex reciprocal


33

relationships binding the different groups in complex ways. This has two important consequences

for pro-poor processes. First, it links poor groups to political circuits via multiple options. Second,

it binds rich and poor in complex ways, diffusing polarization along economic or political lines.

These reciprocal relationships compel powerful groups to respond to the needs of poor ones. The

following box explains this complexity.

Box 6: "Melting pot": Inter-ethnic political alliances in West Bangalore

A majority of poor groups are employed in a variety of activities related to waste recycling and

automobile. The Hindu populations (largely SC) as rag pickers are linked to the Muslim local

leaders in waste trading. A variety of credit arrangements - finance and trade bind them with

other income and ethnic groups. Those occupying relatively higher position in the two economies

tend to be active in the local politics. Without political clout it is often difficult for them to

generate economic surplus. On the other hand, their clout also comes from their trade links and

the "multiplier-relationships" that this spur. The multiplier is especially powerful due to the

cluster or chain characteristics of these local economies. Three of the local leaders that we met

for this study, were engaged in auto renting, wholesale waste trade, and retail waste trade. The

poor are drawn from both the Muslim and the Hindu religion. Ghousie, another local leader, a

local Muslim for example owns a wholesale slipper shop in the area. The traders that work under

him are mostly Kasargod Muslims and a Tamil SC. Ghousie provides his traders materials

without taking any credit. Similarly the autorickhaw drivers- Hindus and Muslims in the private

layouts and in the squatter settlement have links with Muslim autolord in several ways, who is

active in local politics. This autolord, like other autolords (also Muslim) depend on Muslim and

Hindu drivers (from a variety of ethnic and caste backgrounds) for renting their vehicles real

estate, and also participate in their chit funds.

Furthermore there are other ethnic and religious pressure operating on other powerful actors to

support the poor. The ragpickers most of whom are from SC caste are also linked to SC leaders

in the ward via their caste connections. The local Muslim community wielding higher political

clout in terms of their numerical strength and also their neighborhood connections also has some

of the poorest families. The Jamaat or Muslim congregations via the mosque wield enormous

clout in the area. Here, a very important convention is that the better off Muslim residents are

obligated to help the poor via their Jamaat. This is particularly important for Tamil Muslims

who are at the lowest rung -- both economically and politically. They draw on their religion

connections to enlist the support of powerful local Muslims to access jobs, housing and also

during crisis.

The local (Bangalore) Muslims are also financiers for other ethnic groups, with some occupying

relatively high positions within the financing business. The relatively high-income groups such as

the Benares Muslim in fact, do not have much political clout. Their advantage is money power

aimed at the local leaders, many of whom do not have as much economic power. As explained

before, the Kasargod Muslim use their strengths as a vote block to establish their claims. This is

also the case with the SC groups. Many of these face economic vulnerabilities but are

numerically among the largest voting block in the ward.

The above box shows the complicated maze of relationships, conflicts and alliances shaped by

occupational, ethnic, class and religious lines into a complex web. At one level, poor groups inter-


34

linked in reciprocal ways with richer or more powerful ones to the extent that they need each other

to survive. However, the converse is equally applicable. As much as there are circuits binding the

different groups, there are equally powerful forces severing such links.

Annex 2: The influence of parastatals in land and infrastructure provision in Chennai

& Bangalore

a) The extensiveness of parastatal agencies to flood out local development space:

In both Chennai and Bangalore, a multitude of institutions is involved in land and infrastructure

development in the city. In the case of Chennai, Chennai Metropolitan Development Authority

(CMDA) regulates the city development, and infrastructure related to water supply and sewage,

electricity, storm-water drainage is provided by the Chennai Water supply and sewerage Board,

Tamilnadu Electricity Board, and the Chennai Municipal Corporation respectively. The

institutional arrangements in Bangalore are characterized by even greater variety of special purpose

parastatal agencies (Benjamin forthcoming in E+U). The Bangalore Development Authority

(BDA) and the Bangalore Metropolitan development Authority (BMRDA) regulate land

development in the city and metro area. Other parastatal agencies responsible for water supply and

sewerage, electricity and drainage are the Bangalore Water Supply and sewerage board (BWSSB),

Karnataka Electricity Board (KEB), and the Bangalore municipal Corporation (BMC) respectively.

(, in the case of Bangalore) Furthermore, the Karnataka Industrial Area Development Board can

also acquire land to allocate it not only for industrial development but also large mega projects.

In addition, in both cities, there are a variety of project specific specially created agencies like those

for the elevated mass transport system (ELRTS), one for the new International airport in Bangalore,

and another infrastructure corporation for the proposed Bangalore Mysore expressway,

(infrastructure corridor -- since this includes six satellite townships). In both cities, slum

clearance boards are responsible for improving living condition of the poor and housing aimed at

low-income groups is allocated to housing boards. All of these bodies either undertake land

development on their own, or are allocated land by the state government.

b) Parastatals governed by in-effectual or no local representation in their policy or operations:

The organizational structure of parastatals is similar in both cities. Parastatals and Boards are

headed by the state ministers of urban development department. Reporting to the minister is the

chairman (usually of an IAS cadre) who performs an advisory role and a member secretary in

Chennai, or commissioner as in Bangalore, also drawn from IAS cadre. It is not necessary that the

minister heading a parastatal is voted in power from a constituency where that organization has any

jurisdiction. Furthermore, it is not necessary that the minister heading the parastatal be elected at

all. There have been instances, as in the BDA, that its Chairman, who had lost elections from

another town, was assigned to this position due to his equation with the Chief Minister.

Furthermore, in the case of Karnataka and Tamil Nadu, the board of governors that direct the

policy and operations of parastatals are not necessarily governed by elected representatives who are

in a minority position (at times only 2 of 17) (Benjamin and Kumar 1999). Even these may not be

directly elected councilors but rather "nominated" by the party in power, and increasingly by the

Chief Minister. In the case of Karnataka, this has also been in consultation with the party head

quarters in Delhi, who also whet the process of (electoral) tickets given to MLAs. Another aspect

observed in the case of Karnataka, is an increasing trend of the private corporate sector (big

business) playing a direct role in the management of project specific parastatal agencies.


35

There are also processes of centralization of management. In Bangalore, the powers of the City

Corporation in this purpose has been curtailed and transferred to the slum clearance board -- further

centralizing the process. In Tamil Nadu, unlike Karnataka, MLAs have less influence on the

functioning of parastatals and a greater dependence on bureaucracy. The important thing here is

that the elected municipal councils and village panchayats, who once shaped and regulated urban

development under the influence of their elected constituents, today have little or no voice in

decision!making. Town and municipal councils in metro areas, and village panchayats in their

urban periphery undertook many of functions adopted (or poached) by parastatals. Their powers

and influence over the development process, on issues pertaining to the control of land and its

servicing, is greatly reduced.

c) Parastatals operate under a high degree of state / administrative control:

The legal framework, organizational structure linked to state ministers and organizational hierarchy

accord parastatals with more power Vis a Vis municipalities. Its links directly to the ministries,

which, as we had discussed in the main text, allows party leaders to undermine municipalities.

Both in terms of administrative power and political power the municipality occupies the lowest

rung in the hierarchy. The parastatals have legal sanctions or/ and political power by their being

headed by a state minister. For example in Chennai, the CMDA authorized for regulating

development in the city has the powers to overrule municipal decisions in planning issues. An

example is the recent conflict over multistoried buildings licensing. Whereas in the case of

Bangalore, BDA's power is more due to its direct role in the land market and also the legal

framework that provides it with the sole authority of land development the city. In the case of

Chennai, although both CMC and CMDA are linked to state ministry, in terms of organizational

hierarchy, CMDA secretary has more political power via the minister for urban development in

comparison to DMA secretary under which CMC is located. Similarly, in the case of water boards

headed by a minister and a secretary. This encourages parastatals to ignore municipal orders. One

example is the coordination problem that Chennai municipality faced with metro water. Discussion

with councilors suggests, that the need to bring back metro water back into municipality was raised

time and again in the council meetings

"... metro water should be transferred to the council. According to a CMC act, roads are to

be maintained by the Corporation, and the organizations managing infrastructure

networks, i.e water boards, telephones etc have to coordinate with CMC sends a letter to

them asking for plans before hand ... but none of these organizations reply... they obtain

permissions as and when they please and do the road cutting...lack of supervision at the

zonal level also helps them to carryout works without proper permission".

( Interview with councilor 147 and party activist in ward 150)

Given this centralization of power with senior bureaucrats and ministers, influence on institutional

decisions by citizens and their local representatives vary depending on the regime as we had

discussed in the later section. Currently in both cities, partly due to global economy and partly due

to state finance situation, the tendency is for chief ministers to intervene directly in the land market

via parastatals. We explore this political issue specifically in the main text.

d) Parastatals use public powers to forcibly acquire land from settled poor groups, and use these

locations to invest subsidized public funds and infrastructure benefiting richer ones and big

business:


36

It is significant that the main fuel for parastatal development, land is acquired under eminent

domain at below market values with little scope for any appeal. This is supposedly for "public

purpose". However, as scholars have pointed out, the nature of "public purpose" is "flexibly

defined" and often modified to allocate land to purposes benefiting higher income groups (Buch

1985; Marg 1991). As we shall discuss later, it has been shown that land acquired by Development

Authorities in reality, these cater to higher income markets. Industrial plots offered via industrial

estates too cater to high-end markets. This is even more pronounced in the case of special purpose

development projects like software development parks (ibid.; Benjamin forthcoming Geo-Forum).

Another significant point is that these projects that cater to higher income groups, are invested with

publicly subsidized infrastructure. In cases like the software technology parks, these can also draw

on public funds as part of a partnership. In some situations like in Bangalore where a specific

corridor designated for IT development, there are specific allocations slated for this purpose --

again coming from the public exchequer. There is little or no analysis in the public domain, nor is it

known if this has been carried out on the economic benefits of these investments or of their

employment impacts. What has emerged on the contrary, via the public accounts commission, that

these have followed improper accounting procedures, been wasteful and in-effective even in their

stated purpose, and increase the debt that seriously burdens the state's financial situation (ibid).

d) Parastatals replace pro-poor responsive urban settings with regressive mega projects and

exclusive master planning:

A significant is that when parastatals intervene to "provide" housing, industrial plots / sheds, or

commercial complexes, or mega infrastructure these do not fill an "urban vacuum". Rather, these

are projects that are built on land acquired which in many cases is already settled, or where

processes of settlements have been initiated. These existing settlements later spur small-scale

enterprises, commercial complexes, and small plots for residential purposes that can be

incrementally developed. All of these in general, cater to low end markets including the poor. For

the poorest, although these locations might not be of immediate value, they form part of their

longer-term strategy of settling and investing in the city (Benjamin and Bhuvaneswari 20001).

These are also settings, which help poorer groups to establish political claims, and for local

politicians to move up the political ladder on the basis of these constituencies (ibid.). Thus,

interventions by parastatal agencies seriously harm existing and relatively pro-poor forms of urban

development. In Bangalore, there have been extensive demolitions of such settlements in an effort

to establish a planned environment. Specifically targeted are the small scale commercial and

manufacturing units. Significantly, this effort parallels the emphasis in Bangalore being on large

mega projects (a trend that has also started in Chennai in recent times). These invariably cater to

the high end of the corporate sector -- again moving "up-market'. Previous research in Bangalore

has shown the extensive regressive impacts of these for the poorest -- hitting out most severely on

their livelihood (Benjamin and Bhuvaneswari 2001).

This regressive situation is more extensive and reinforced when we consider the further impact of

master planning. This has been shown to be exclusionary and regressive on several grounds. These

relate to large sections of the population and the poorest being forced into illegality due to poorly

conceived and elitist technical criteria, and promoting a form of development that is expensive and

elitist (Wadhva 1983; Mitra 2002). Also, the main intention of re-distributing land towards the poor

does not happen (Verma N. quoted in Mirta 2002). Furthermore, the forced has allowed richer


37

groups to use the courts against the poor further entrenching poverty. It` is important to recognize

that the impact of Master Planning on the poor have varied in both the cities. There is a difference

in the approach of CMDA and the BDA. The former, since its inception (and partly under the then

World Bank policies promoting land regularization) has had a facilitating role in land development.

Involvement in land markets directly is limited to planning of new satellite towns. This has meant

that Master Planning has been relatively less extensive in Chennai with a greater emphasis on

regularizing existing settlements. In contrast, in Bangalore, the BDA intervention in land market is

direct, as it is the only legal organization for development of housing layouts. This difference has

influenced the extent to which the poor can acquire plots within the city. Within CMDA

jurisdiction are the Chennai Municipal Corporation, and five municipalities namely Thiruvottiyur,

Alandur, Pallavaram, Tambaram and Ambattur. There is considerable overlap of functions

between the development authorities and the municipality in both the cities. The jurisdiction of

BCC and BDA hence overlaps to a large extent in the city. Both BDA and BMRDA are involved

in land development and thus influence vast amount of land.

Housing layouts developed by the BDA were accessible to a section of city's population, largely

from the middle and upper middle class. Institutional allotment is only to domicile residents and

other groups can get it only via second or third sale. Consequently, in real terms BDA plots were

priced the highest in the city's market. Other poorer groups have to depend on revenue or private

layouts, where the municipality provided infrastructure via elected representatives. The situation is

different in Chennai. Although, CMDA is not directly involved in land development, areas

developed via other state agencies such as the Tamilnadu Housing board in South West Madras are

dominated by middle and upper middle income groups. There is allocation of sites / houses for

low-income groups in both the cities. But they appear to be filtered to other income groups.

CMDA's function to a large extent is linked to issuing of licenses and monitoring the

implementation of master plan. It is in the issue of licenses that functional Overlap occurs in

Chennai. Power to issue licenses for building upto a height of 10m (G+2) is with the

municipalities; whereas the multistoried licenses are issued directly by the CMDA. Recently

however, this too has been taken over by the CMDA. There are also issues of coordination between

the municipality and other parastatal boards. For example, the Chennai Metropolitan Water supply

and sewerage board is responsible for distribution networks that run underground and the CCMC

for maintenance of roads. As we have mentioned above in this text, the legal provisions of CCMC

act provide power for municipalities to coordinate the activities of parastatal agencies in any

location within the municipal limits. In reality, the boards do not adhere to the CCMC norms, since

the former is higher placed in the bureaucratic hierarchy.

e) Empowering the ULBs: Intention and reality

Several authors have commented on the erosion of political, financial, operational autonomy of

local government with the emergence of parastatal agencies as major players (Buch 1985; Jha

1985). Reports of commissions and expert bodies are quite explicit on the issue of placing ULBs in

a central position and expanding its powers. The recommendations by the Rakesh Mohan

Committee Report (1996) on infrastructure, (mentioned in the LC Jain commission on the 74th

.

CAA in Tamil Nadu) recommends that the sole responsibility of supplying urban infrastructure

vests with the ULBs and they remain as co-coordinating agenciesix

. This is echoed in the Approach

Paper to the Ninth Five-Year Plan. The LC Jain Report on the 74th

. CAA in the context of Tamil

Nadu further reinforces this position. Without explicitly recommending closure or change in


38

operations of parastatals, this Report recommends the functional level at which decentralization

should take place, and suggests how these may be transferred to the municipal administration and

the Wardsx.

In the context of Bangalore, the Chandrashekar Commission was constituted by the Government of

Karnataka to address the various issues concerning the management of Bangalore metropolis and to

suggest measures, which would result in more efficient delivery of public services. This Report is

more explicit, stating under the heading of 'the problems of the municipal management, which need

to be set right by governmental action in decentralizing these servicesxi

. The above text shows that

there is strong consensus on this issue.

Despite this, in the case of Chennai, we observe that this has been diluted and the actual operational

powers been actually diminished. KP Subramanian (2000) in a detailed comparison of the Tamil

Nadu Urban Local Bodies Act 1998 and Building rules 2000, points out how different provisions

embedded in the Building Rules 2000 show a centralization tendency. In particular, these have a

distinct bias to seeking the Commissioner's approval for various building activities related to

building permits. This negates the trend of political empowerment that intended to move away

from a "commissioner" centred local body that existed in colonial times representing an

exploitative form of governance. Similarly, he shows via detailed points how the existing

municipal practices allowed for active engagement of civic society but the new rules effectively

centralize these and link them to the Master Planning approach. It is also significant that the

broader issue weakened by new legislation relates to land development and building regulation.

Thus, actual practice suggests that land issues and ULBs are an important domain and likely to be

poached upon in an effort of centralization.

f) Conflicts between Development Authorities and Municipal Corporations

In the case of Chennai, the L C Jain Committee clearly suggested that the functions of Planning,

supervision and implementation of the Master Plan and detailed development be entrusted to the

Municipal bodies, with Ward Committees assisting in identification, assistance and co-operation in

the task. Since these functions are presently being handled by the CMDA in Chennai, it would

imply a different role for the CMDA in Chennai. The DMK government, in 1996, transferred the

urban planning functions to the Chennai City Municipal Corporation (CCMC) through a

subsequent amendment to the local authorities Act in 1996. Thus, urban planning became the

obligatory responsibility of the CCMC. However, it is seen that not only is the CMDA carrying out

these functions, it is at loggerheads with the CCMC over their respective roles in the planning

process. Though there is a well-defined protocol for interactions between the CMDA and the

CCMC (see box), they are constantly at loggerheads over the rights and responsibilities of each.

For example, the CCMC refused building permits to more than 100 multi-storeyed residential

buildings, which had been given building permission by the CMDA, on the grounds that the

parking space provided was not sufficient. The CMDA claimed that it was its prerogative to issue

permission for such buildings, the CCMC asserted that the planning permission was of no

significance unless the civic body granted building permits. This row spilled over to the State

Government, which had to intervene in the matter. It is possible that the issue Subramanian (2000)

writes about was an outcome of this conflict -- tipping the balance in favour of the CMDA.

Rsistance to abolish parastatals arise from both the bureaucracy and the political parties. A


39

popular argument, particularly from the bureaucracy is that the municipalities are incapable of

fulfilling the city’s function.

“Quote from CMDA chairman’s interview” and TNSCB planners interview

“The municipality is geared more towards administrative function… it does not have the

technical capacity or the resources to plan and implement individual sectors”.

Another line of argument for continuation of parastatals agency is the inability of corporations to

think holistically about the city growth.

"..While in the present municipal system, given the party political dynamics there are serious

difficulties for councilors or the MLAs in negotiating across the wards, there is no reason as to why

agencies such as CMDA be democratized." (Quote from the interview of CMDA chairman).

A similar conflict has existed in Bangalore between the BDA and BCC (like most other cities in

India). However, the state government, via its highest political office, has initiated government

orders, which took responsibility for the implementation of civic works away from the BCC to the

hands of the BDA and other special purpose agencies. Secondly, there was a move to reduce the

powers of the corporators and make the commissioner a permanent official.

g) Planning functions to be focused at the local level

What is of significance here is much of municipal planning and earlier regulatory frameworks were

locally responsive. A temple town would have developed specific conventions of civic

management that also responded to the local economy. A trading town on the coast would have

evolved other specificity. The zeal for Master Planning has removed such contextual references and

with it, diluted possibilities for civic participation. There is important institutional politics behind

such trends -- as seen in the case of Chennai below.

Master planning has been pitched at the state government level, and in Chennai this is via the

CMDA. With increasing size of cities like Chennai into large metro-conglomerations, the CMDA

was seen to institute into a super planning body-taking control over rural lands notified for urban

expansion. The LC Jain Commission notes that for cities with population more than 10 lakhs, a

Metropolitan Planning Committee is recommended by the 74th Amendment. The composition of

the MPC had not been included in the TN ULBs Act, 1998 (verify). However, the role of the MPC,

as originally conceived, was intended to be larger and wider in scope relating to socio-economic

planning. The Commission suggested that, the CMDA, the Single Local Planning Authority, carry

out the task of preparation of Master Plan, and detailed Development Plan for urban development

as per the present arrangement, but should be brought under the control of the ULBs and be

responsible to them in all respects. (Jain 1997: 36, 38).

With respect to institutional linkages, the commission suggested that the functions of Planning,

supervision and implementation of the Master Plan and detailed development may be entrusted to

the Municipal bodies, with Ward Committees assisting in identification, assistance and co-

operation in the task. (ibid: 40). Further more, these would be aggregated to be incorporated in the

larger metro plan -- visioning a federated process.

Despite these visionary suggestions, a task force consisting of senior officials was set up under the

Director of Town and Country Planning, on June 4, 1993. This Task Force opined that the powers

for urban planning and development would not be transferred to local bodies. Based on these

recommendations, Amendments were made to the TN Municipal Corporations Act, TN


40

Municipalities Act, and the TN Panchayat Act in 1993. The Amendment suggested that 15 out of

the 18 subjects listed in the 12th Schedule of the Constitution of India, would be transferred to the

local authorities. The three excluded subjects were:

• Urban planning including town planning;

• Regulation of land use and construction of buildings and

• Fire fighting

This implied that the functions and powers of the CMDA would remain intact. But the DMK

government, in 1996, transferred these three functions to the Chennai City Municipal Corporation

(CCMC) through a subsequent amendment to the local authorities Act in 1996. Thus, urban

planning has become the obligatory responsibility of all elected local bodies from Nagar panchayat

to municipal corporations. Faced with a situation where the ULBs have wide jurisdiction over most

of the subjects in the local body, the exact nature of separation of the duties and rationale for the

existence of the parastatal organizations has to be redefined. However, this issue remains highly

political and subject to the complex "three party" system where the mayor, the state government,

and the local government, can be from different parties and subject to political fractures.

Similar cases are cited for the relationships between other parastatals and the CCMC. The

CMMWSB controls the sewerage system, with the CMCC looking after the storm water drains.

During monsoon, frequent controversies erupt, with each agency accusing the other of not

maintaining the system. In 1996, maintenance of storm water drains was directed to be handed over

to the CMWSSB from the CCMC, which went entirely against the grain of slogans of

empowerment of ULBs being bandied about. However, this decision was aborted in the wake of

elections to the local bodies, and the installation of a popular council. Provision of Water supply

was the responsibilities of the ULBs in Tamil Nadu till 1971, in which year a parastatal body called

"Tamil Nadu Water Supply and Sewerage Board" was constituted, followed by the setting up of the

Madras (now Chennai) Metropolitan Water Supply and Sewerage Board in 1978.it is suggested that

the TWAD and CMWSSB supply the technical expertise to the ULBs, in project identification and

the ULB take up the task of implementation. MetroWater (CMWSSB) to have close co-ordination

with the CCMC, and assist the CCMC with all the technical expertise necessary for implementation

and maintenance of water supply schemes.

This situation needs to be viewed in the context of two issues. First, water has been a serious

political issue between the two major political parties. Second, both these parties are organized via

a strong cadre system to the grassroots. Both issues imply a strong centralized political pressure to

ensure that a parastatal is responsive to grassroots demands on key services that may need

resolution in a centralized way. However, this does not preclude the CMWSSB to operate under the

CCMC. Though there is a clear shortage of water in the city (last year, it was feared that some

residents would have to leave the city in the face of continued water shortages), it did not become

an election issue in the elections to the CCMC. Some experts attribute this to the remarkably low

control that the elected representatives have on the parastatals and the increasing influence of party

politics as we discuss as a major theme in the Chennai case. Two of the authors had conducted

detailed studies of local level politics in Bangalore’s western wards to highlight the key role of

party politics in influencing institutional access by poorer groups, and as a consequence, facing

repressive state actions promoting an elitist development (Benjamin & Bhuvaneswari 2000). While

some authors like Subraminium (1999) provide useful accounts at the state level, there are very few


41

local level accounts – although it is at this level of detail that one gets a sense of the operational

position of municipal bodies.

Annex 3: The “rational” world of para-statals: Reflections on the ELRTS

By an Phd canditate IIM

This note reflects on my Ph.D. at the Indian Institute of Management, Bangalore, where I focused

on issues of mass transportation in Bangalore. When I undertook my basic coursework in

preparation for my thesis in urban management, I was struck by the multiplicity of views on

infrastructure projects project. In the post-1991 era, privatization was the key element of

infrastructure development policy. There were arguments for and against the policy approach - the

Enron Power Company in Dabhol, Maharashtra being a typical example there were strident protests

against the projects, as well as logical analysis explaining why the project was beneficial.

Arguments forwarded by either side were each as convincing as the other. Mega-investments in

transport have often yielded very little revenues. For example, the MRTS in Chennai was built to

serve nearly 3 lakh people, but is having traffic of only about 6000 persons per day at present.

Given the divergent opinions and views, arriving at a methodology to show how and why one

project was “better” seemed an interesting area to work on. I undertook a study of typical models

or methods of evaluation, primarily being used in developing countries. These models fell into

three categories - One, inspired by the Social Cost-Benefit Analysis; Second group of models

considers goal-achievement for different groups; Third, models related project alternatives to the

nature of location decisions to grounded the alternatives in the traditional realms of planning i.e.

urban growth and development. However, in undertaking this investigation, I came across the

following issues:

a) There is no underlying civic process to decide on basic assumptions underlying technical

choices.

Instead technical choices were defined by the TORs issued by the State Governments and

influenced by the speciality of the agency undertaking that work. Thus, this was open to

professional interests of the agency rather than a broader public debate. For example, a study

conducted by Metropolitan Transport Project a division of Indian Railways, recommended the

construction of a ring railway around the city. Another study by Central Road Research Institute,

argued for improvement of road network. These studies often concluded with project

recommendations, along with fairly detailed cost estimates. The data that is used for arriving at a

decision is often incomplete and open to debate. For instance, the Infrastructure Leasing and

Financial Services Ltd. (IL&FS), an organisation set up by several leading financial institutions for

aiding privatisation of infrastructure projects, was commissioned by the Government of Karnataka

to conduct a study. They looked at two sets of data, supplementing it by market research -- but

already pre-determined by the range of technical choices chosen. Significantly, in the method of

data generation or analysis, there was little by way of a larger public consultation nor did have

elected representatives on its board to review the main technical assumptions influencing data sets

and the survey methods. In the recent past, some studies were also made to check out if the traffic

studies were still valid. But this was more to lend additional comfort to possible lenders rather than

to get more correct information related to the city and its needs. Crucially, there was no attempt


42

again to rephrase the transportation project in terms of urban growth and development that would

be engendered by it. The reality that such a project involved about 25% equity contribution from

the state on a total cost of about Rs.8000 crores (Year 2000 estimates), and that the state's financial

position was too precarious to think of such a mega-investment was not a part of these studies.

b) Politics of decision making Prior to the project, it was assumed that Bangalore is to be

modernized along the lines of Singapore. As one mentioned, if Bangalore had to look like

Singapore, than it also had to have the kind of ELRTS that Singapore had! The detailed cost

calculations were then made based on this premise, and data from the willingness-to-pay was used

to arrive at estimates of revenues and profits. It may be mentioned at this stage that this was by far

the most capital-intensive option. The surprising issue was that this choice was not based on any

evaluation of detailed data sets. On the contrary, after the decision was made a implementation

parastatal was established Bangalore Mass Rapid Transit Limited (BMRTL) as per the

recommendation of the IL &FS. Further, the technical team clearly saw their mandate as

implementators, as advised by the GoK, and hence not in questioning the basis premise of how and

why the ELRTS was chosen. As a senior official of the BMRTL explained in a personal

discussion:

It is not my job to question why ELRTS was chosen, and whether it is the best choice or

not…my job is to see that the ELRTS is implemented in the best possible manner, at the

least cost. I am also a Bangalorean, and I think I am as proud a citizen as any member of a

civic group. So I would also do my utmost to see that the system is built such that it is best

for Bangalore.

The task of technical experts clearly consisted of detailing the system and prepares for taking up its

implementation. Data was collected only for the purpose of immediate use of the BMRTL in

project implementation and maybe to seek out funding. Political representatives response to this

project was limited and diffused. For example, the then Urban Development Minister for Bangalore

attended one of these meetings, where he read out a prepared text, but left before the completion of

the meeting, leaving the task of answering queries to the professionals in charge of the parastatals.

In such an atmosphere, planning for the ELRTS went on in the absence of its implications for the

city at large. The vision of the ELRTS as being a modern system, suitable for the Silicon Valley of

India (as Bangalore is often referred to) seemed to seduce those who were in positions of political

power, and seemed to guide the development of the ELRTS as a natural choice for Bangalore.

(Interestingly, my primary research showed that some people were also in favour of this "hi-fi"

vision for Bangalore rather than in having a system that met the requirements in as simple and

inexpensive a manner as possible.

c) Fragmented parastatals. None of the agencies -- planning or transport had a complete data set

on the socio-economic profile of residents their present mode of travel, their transit routes and their

expectations from the new scheme. Technical analysis was hampered by the plethora of

institutions, and their different ways of dividing the city for their administration. It was clear that

the whole information structure of the organisations was not oriented to use, but for record-

keeping, inward-looking rather than being visualised as a part of the decision-making apparatus.

This is compounded by the very little communication between parastatal agencies. For example,

the Bangalore Development Authority (BDA) revised its Comprehensive Development Plan

(CDP), a long-term planning document for development and growth of the urban conurbation, in

1995. The CDP, though made nearly at the same time as that of IL&FS Report, discussed a


43

transportation system outlined by the Railways in 1983 as the basis for city growth and

development. The possible implementation of ELRTS and its ramifications for city growth as well

as citizens mobility patterns was not discussed. Indeed, a senior level planning officer declined to

speculate on the land use effects of the ELRTS, saying that it was better to discuss it with the

BMRTL, rather than with the BDA! Thus, there is a this lack of a comprehensive view of the

implications of their actions on the city and its residents. What this effectively does is to confuse

any attempt to rationalise the process in the civic domain. One could argue that while its irrational

in the technical sense, such a situation would open up the ground to the promoters of the projects to

move ahead un-opposed.

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Politics on an Industrial Cluster in Delhi, India. Un-published PhD dissertation submitted

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Setting, and the Politics of Governance" In a special issue of Geo Forum on urban

change.

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Nagarlok 17 (4), 46-52.

Chandrashekar, B.K.(1997) 'The Committee on Urban Management of Bangalore city", Report

submitted to the Government of Karnataka', Bangalore.

Chakravarty, S., 2000. The Big Foul-up: Violent protests against a bid to shift polluting units leave

the Government groping for an alternative. India Today, December 17th 2000.

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DELPHI, 2000. Study of the Silk Weaving Cluster at Kanchipuram, Tamil Nadu for the Swiss

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Leftword books: New Delhi.

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Jayaraman, S. (undated) 'Role and functions of urban local bodies under 74 Constitution

Amendment Act and State Finance Commission',

http://www.tn.nic.in/TN74thAmendment.pdf

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END NOTES

i See for instance, Pinto 2000, Benjamin and Abhaya Kumar 1999, Benjamin 2000; LC Jain Commission 1993;

Mohanty 1986; Subramanian 2000a; Subramanian 2000b; Chandrashekar, B.K. et al., (1997). Jayaraman, S. Some of

these are more academic works (Pinto, Benjamin & Kumar, Subramanian), others focus on specific policy issues

including commissions set up by the state government (Jain, Chandrashekar, Jayaraman). ii This issue came up within civic groups and local politicians in Mangalore protesting against the detrimental impact of

ADB funded large infrastructure projects. Despite the regressive impact to local political constituencies, the ruling

Cong I municipal councilors were constrained by their party directives on these projects, and the opposition BJP

councilors bound by the party HQs in Delhi which had supported these projects. The Ex-deputy Mayor mentioned to

one of the authors how one of the factors which led to her ouster via illegal means may have been her opposition to this

project and instituting a municipal resolution which argued that the Mangalore Municipal Corporation should go for

funds loaned by local banks at 2% rather than ADB funds being loaned at 12% not counting any penalty charges. iii

Subramaniam (1999) analyses the reasons for congress's decline in Tamilnadu. During congress regime, under the

chief ministership of Kamraj, the state witnessed rapid economic growth. Policies were centered on heavy industries.

The popularity and rapid growth of DMK in part was linked to questioning of the narrow distribution benefits to elites. iv

For example in the case of Chennai municipality, according to party activists and MLA of zone 11, of the 155

councilors more than 65% were associated with trading sector, and the remaining professional politicians but with links

to local service industry. Similarly, De wit (1995) found that a majority of employment was linked to textiles, small

manufacturing and trade. Moreover our information a majority of councillors derive their political clout from these

economies and land development that service them. v Subramaniam (1998) points to the wide divergence of policy interest and activities at the top and at the lower levels

in the case of Tamilnadu. Partly due to this, the policies of parastatals influenced heavily by the State political parties

and the World Bank of the 70s and 80s was focussed until recently on regularization. Similarly in Bangalore, during

Janta Dal regime, in the late 80s and early 90s, the period of a spectacular real estate boom, policies were related to

land regularization, re-conveyance, and a strong emphasis on small-scale infrastructure development. vi

This viewpoint is found across ideological divides. Putam’s work, attractive to the conservative and the large NGO

community, has been influential to promote a “de-politicized” benevolent society. Harris, in a well-founded critique,

however, also views local politics as being one of the capture by the local elite (John Harris 2000; Also see Beall 2002

on the issue). Tendler, in looking at this issue in Brazil, justifies the interventions of the higher level state institutions

and bureaucrats to overcome capture by local elite. These positions complement the social movements literature,

centered around Castell’s work on the need to mobilize the poor outside the influence of political parties. vii

If one were to take a cynical view of the issue, it is hardly surprising that the TOR of commissions to “decentralize

development” remain so broad based to include various functions of municipal state governance rather than specifically

focus on the core issue of land. This merely serves to confuse the issue and provide a way out by the commissioning

authority to select and choose the easier options and not address the core issues. viii

There are some issues specific to Chennai which may be of interest. A third issue is the control wielded by state

government on municipality even after 74th

amendment act. The current conflict between the state -local government in

Chennai illustrates this. With ADMK’s accession to power, and in particular since the present chief minister assuming

office, mayor’s functioning has been affected. The present conflict between the state and the local government centers

on holding of two posts by an elected member. The present mayor also holds an MLA seat. The bill prohibiting elected

representatives to hold two offices was introduced in the legislative assembly on the 22nd

of April. The opposition

party DMK met it with stiff resistance. Within the council this has affected the relationship between the mayor and the

deputy mayor, the latter belonging to the ADMK party. Senior politicians and media report suggest that this is a move

to increase ruling parties control over the council. In the present system, the mayor has more powers and can veto the

council and the commissioner. The meetings of joint development council were abandoned. According to an

opposition councilor, the council has come under the control of ADMK party, with the mayor keeping away from the

council business and other DMK councilors having not much space to maneuver the system.

“For the last one month meetings are chaired by the deputy mayor… who is new to this office. Often there is

considerable confusion in these meetings. …Being elected by the citizens, he is not “directly accountable to

the council It is hence difficult for the ruling party to control the council via party machinery. If S is moved,

the deputy mayor, an ADMK candidate with not much experience can be manipulated.

(Councilor in Chennai).

The ongoing political conflict in Chennai illustrates the limitations of 74th

amendment act in empowering local

representatives. Although senior bureaucrats and politicians point to the procedural lacunae,


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… Either the mayor should be given more powers to conduct business or the system of mayor’s election need

to be changed. In the present system, it is hardly possible for the council to conduct any business… parties

will continue to influence… probably it is better for a mayor to be selected/elected by the majority party as in

other states”

(MLA)

ix

The text is particularly clear on this issue:

‘The setting up of multiple parallel agencies leads to increased costs without commensurate benefits. The

ULBs will perform the overall function of planning and co-ordination of all infrastructure services. As has

been pointed out earlier, proper co-ordination of projects can reduce wastage, cost and improve project

viability. This task should be taken up at the city level by ULBs, in consonance with the metropolitan or

regional plan. The ULBs will be responsible for assessing the infrastructure needs of the region, setting up

priorities and schedules for inter-related services. Wherever required, ULBs will co-ordinate with each other

for the provisioning of services (page 15)

x .An excerpt from pg.196, Chapter IV:

'..in the field of development, there exist a larger potential in the Urban Local Bodies to be harnessed than

merely outlining some of their existing functions and powers. We are restructuring and rationalizing the

schemes (of different agencies and Departments of the State Government) to fit into local priorities, to avoid

wasteful expenditure, and speedy execution with full accountability to the urban local bodies which is also an

insurance against avoiding leakage and unwanted corruption'

xi

The multiplicity of agencies in the city, creating problems of co-ordination in an environment where public

satisfaction with civic services and public confidence in the bodies, which provide them, are lacking.

The Report then recommends that:

'the functions of civic amenities should be placed under the city Corporation. These should include, apart

from the existing functions of the Corporation, the areas of water supply and sewerage, slum improvement,

environmental protection, poverty alleviation programs and fire services.'

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