Smart city templates can enhance local governance
The mission can provide civic authorities with stable leadership to improve administration and services
The Smart Cities Mission (SCM) promises to bring India into the 21st century of governance and this is no mean feat given the negative perception of municipalities. The SCM requires each smart city to create a parallel institution called a ‘Special Purpose Vehicle’ (SPV), which is delegated the ‘rights and obligations’ of the municipality.
The two institutions are interrelated but the exact terms of their hierarchy are unclear. This ambiguity could hamper collaborative efforts between the bodies and democratic processes. Thus, it is imperative to ask: How can SCM create efficiencies in local governance while strengthening democracy?
An SPV is registered as a limited company and is composed of a small board of people. According to a study by the Centre for Policy Research, the board comprises bureaucrats, with a smattering of municipal-level elected representatives. The SPV is a powerful idea in boosting the efficiency of urban governance, however, without clarity on its relationship with the municipality and how citizens can hold it accountable, it risks failure.
First, the strongest asset the SPV offers is stable leadership. Indian cities are governed by municipal commissioners who are transferred regularly. The lack of institutional memory in municipalities prevents projects from being implemented in a timely manner, even if the leadership changes. The SPV, however, will hire a CEO to implement the mission and could have more stable leadership to ensure that the plan is implemented better.
Second, the SPV has the liberty to develop new processes between people and departments and streamline decision-making to ensure better coordination between departments. Municipalities are often restricted from achieving similar forms of efficiency as they are encumbered by their size and propensity to work in silos. Third, most municipalities do not have strong finances while SPVs could generate higher credit ratings and allow cities to have greater access to funding, through fees and the debt market.
The SPV structure was created to circumvent the problems associated with municipalities and ensure greater efficiency in planning, implementing urban development projects and accessing finance in Indian smart cities. If cities utilise SPVs as a means of demonstrating to India the need for interactive departments, stable leadership and finances which could then be transferred to an elected official in the future, like a mayor, there is hope of ensuring that the ‘rights and obligations’ are utilised efficiently and smartly to better both urban governance and deepen democracy, both in value and practice.