At present, there are several very large and very small states in India. The diversity with respect to size especially in economic, linguistic, demographic and area terms is truly staggering. For a union government to understand and make policies taking into account all needs of all states is simply an exercise in vain. This would even go against the principles of decentralization and delegation of authority as envisaged in the 73rd amendment to the constitution, which calls for greater autonomy to not the second but the third level of governance. How can we ensure autonomy to the third level when it is missing at the second level?

The prime minister is well aware of this critical point and it will be worthwhile if he works with the states in building an atmosphere of trust where states can be made partners in development. Areas where the state could do much good to improve include necessities like food, electricity, access to healthcare, access to banking, access to clean water and affordable housing. While working on these basic realities, the states would also do a greater good in trying to foster investments from corporations which will give a boost to not just local firms, clusters and industry, but will also provide people with much need employment in that particular state. In time, these people could also set up their companies that may make these states not only competitive, but also self-reliant and prosperous in the long run.

Cities are the other building block of competitiveness which are often neglected. They are places of increased economic activity and prosperity. Cities, the world over have stood the test of time and are seen to be harbingers of economic prosperity and growth. They also are representative of identity and civilizational ethos. In India, adequate attention is not given to cities, which lie at the third level of governance. It is in lieu of the fact that municipal finances are in a pathetic state of affairs in India. This has led to several problems like non-availability of necessities like proper sanitation, proper housing and lack of proper infrastructure within the city. Cities, when they have proper finances, have sufficient wherewithal to absorb the increasing influx of people to urban areas. They also have greater chances of improvement in implementation as political opposition is lesser at the level of cities as compared to the state or at the central government level. In India, the 100 new smart cities initiative is a step in the right direction but much will depend on not just branding but improvements in finances, infrastructure and governance at this third level. What is required is not just ‘smart’ cities, but enabling cities with proper ‘hard’ and ‘soft’ elements to come together for creating both environmentally livable and economic viable cities. The focus will have to move away from either human elements or economy or environment and will have to incorporate elements of all the three else the point of 100 ‘smart’ cities is just an eyewash.

One sincerely hopes that a focus truly on the second and third tiers of government, and more importantly, governance will do greater good not only to the Institutional framework of India but will also empower people to practice participative governance that forms the basis of India’s democracy.

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(This article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness & Editor of Thinkers. The views expressed are personal. He can reached at amit.kapoor at competitiveness.in and tweets @kautiliya)