In GDA We Trust? – Friday Gurgaon – Nov-14-2014

November 17, 2014 - Uncategorized

After serving as a fiefdom of the builders and bureaucrats for the last decade, Gurgaon is eagerly waiting for redemption. The City wants an end to the political indifference, bureaucratic apathy and lack of development. The City is hoping that the new BJP government will soon deliver. However, on the way forward there are two schools of thought; both want change to happen, but in their different ways. Both are working on the same objective, of how to reduce the financial and political over-dependence on Chandigarh, and on how to get things done efficiently and effectively with the City’s own funds. However, experts suggest that unless the feudal and parochial mindset undergoes a change, there can be no renaissance in the State or in the City. Civil society activists and political watchers ascribe the civic and governance failure of Gurgaon to primarily the lack of local decision making power. Almost every proposal needs to be ‘requested for approval’ from Chandigarh. In such a scenario, some key people in Gurgaon, and surprisingly even the politicians, believe that the setting up of a Gurgaon Development Authority (GDA), on the lines of the NOIDA model of governance, is the need of the hour. The proponents of GDA want an overarching authority, headed by a CEO (like NOIDA), to be appointed, and given all the civic and social responsibilities for the City. This will be an executive Authority that will be manned by the ‘right’ bureaucrats. However, there are strong critics of the idea of GDA in Gurgaon itself, and they include a number of civil society activists, municipal councillors and urban government experts. Their argument is that an agency like GDA will continue to be headed by a bureaucrat, and will be answerable to a bureaucrat, who will finally  report to the Chief Minister. The GDA, for them, is nothing more than an improvised version of a combination of HUDA (Haryana Urban Development Authority) and DTCP (Department of Town & Country Planning), with all levers still in the hands of bureaucrats – and no accountability to the people. They thus prefer and recommend the greater empowerment and the corporatisation of the MCG (Municipal Corporation of Gurgaon), and want it headed by an elected and accountable Mayor; they believe that this would be a far more effective mechanism to help deliver the goods. 

It seems, broadly, that the civil society in Gurgaon backs the MCG model, while the political class more or less favours the setting up of a GDA. Some of the corporate citizens also have a preference for a GDA, and opine that the civic administration should move towards a corporate governance structure. Unfortunately, most of the citizens don’t seem to have a clue about this debate or issue. Ramesh Menon, a consultant, says that the management of the City through the Municipal Corporation model hasn’t worked, owing largely to two factors: the City has grown much faster than the expectations, and there is a lack of accountability. “The ideal model of governance for Gurgaon would be a corporate structure, wherein the economic generators (the corporate houses), the residents and the administration combine their intellectual & implementation capabilities to help evolve Gurgaon city as a ‘self governance’ model’,” says Menon. The proponents of GDA further state that while the development authority should preferably have bureaucrats heading various functions, they should tap community resources for advice and functional partnerships. Citizen members and companies could be co-opted onto projects, as per need. Menon further suggests that the co-opted corporate houses could assist the Authority on e-governance projects, both on the structuring and implementation. The Administration can focus largely on infrastructure projects in Education, Health and Transport, and the utilisation of public places and open spaces. The Authority should first prepare the ‘Vision’ for the City, and draft volunteer experts to be part of the planning & execution. The economically e=weaker sections have just not been planned for, or even recognised, and this aspect needs to now be well-integrated into any future plan or vision. Anurag Bakshi, Convenor of the BJP Economic Cell, Haryana, who was also involved in making the Party manifesto for the MP and MLA elections, says that the Gurgaon Development Authority has been accepted in principle by the BJP, as it would ensure a more inclusive development and growth. “The proposed agency will ensure decentralization of power. Decisions will be taken locally, and in time,” asserts Batra. Many residents, Gurgaon who had voted for the BJP and supported Gurgaon MP Rao Inderjit Singh, Badshahpur MLA Rao Narbir Singh and Gurgaon MLA Umesh Agarwal, are now hoping that the promise of a ‘unified agency’, which the Party had made during the polls, would be fulfilled.Sanjay Sharma, a real estate consultant, says that Gurgaon needs an authority that can ensure the implementation of the rule of law. “The laws are there, but the problem is that there is no one to implement them with resolve, including taking coercive measures,” says Sharma, adding that there is need to have a single interpretation of regulations, so that builders, officials and others do not take people for a ride – as is happening now.

The strong critics of GDA argue that, apart from NOIDA, there is no other similar working model of governance, which can be studied for the setting up of the framework and contours of the proposed body. Also, it would be difficult to replicate the NOIDA version in Gurgaon, as this City is already ‘developed’, and now needs to be mainly ‘retrofitted’; it cannot be rebuilt from scratch. Questions are also being raised, that even if HUDA is replaced by GDA, its future course of action and impact – including the sources of income and expenditure – will anyway be decided by the State government. While the sale of land in the many ‘new’ sectors will also generate large revenue, there is no guarantee that GDA will be allowed to spend the money on the City itself. Further, MCG, being a constitutional body, cannot be superseded by a ‘Special Purpose Vehicle’-like GDA. Gurgaon Councillor Nisha Singh, who is a strong votary of an empowered MCG, says that it is important to understand the nomenclature and the ‘functional style’ of the proposed GDA. She has lucidly explained he views in detail (see Box). However, GL Sharma, a senior BJP leader, argues against giving primacy to MCG, saying that the municipal bodies in Haryana, and particularly in Gurgaon, neither have the ability nor the capacity to serve large cities. “In Gurgaon the MCG has a limited mandate in just the ‘old’ city and the urban villages. Even here the MCG has failed to deliver, and unless the government sets up an over-arching body for the entire Gurgaon urban complex, there is little hope that things will improve,” asserts Sharma. An interesting argument put forth by him is that the enormous corpus of around Rs 14,000 crores, which is lying with HUDA as EDC/IDC, could be transferred to the proposed GDA. In comparison, MCG has a budgeted annual income of only Rs 1,000 crores, including property tax – which at present is being disputed by many. When asked whether the new dispensation led by CM Manohar Lal Khattar would deliver the promised GDA, Sharma says, “The elected leaders have to play an important role in delivering on the promises made to the people.”  The proponents of MCG question this argument strongly, and opine that the role of a development authority is mainly the initial development of a city – of laying down the basic civic infrastructure and facilitating the setting up of new residences and commercial establishment. However, after a new city is ‘set up’, or an existing city is expanded, the role of HUDA (or a GDA) becomes limited. In fact HUDA has wrongly taken on the role of a maintenance agency in the sectors that it has developed decades earlier; this role should be performed by a local self government body (which is MCG, in Gurgaon). Bhawani Shanker Tripathy, founder of Mission Gurgaon Development, says, “For me it is a big No to GDA. I would strongly propose the empowerment of the MCG. MCG is the constitutionally mandated institute of local governance….to be run by democratically elected representatives. How can a parastatal organisation like the proposed GDA supersede a democratically elected governance structure? Can a HUDA Administrator be ‘superior’ to an MP/MLA? Are the people pushing for a GDA even aware (forget knowledgeable) of public and city governance structures? Their key concern seems to be that ‘development’ decisions should be taken in Gurgaon (with just a few files going to Chandigarh). But they are missing the point; they are being myopic. The CM will remain the chairperson of a GDA by default, and it will be led by a bureaucrat (as is HUDA currently). Bureaucrats are part of the Executive wing, and they should be the ones to execute, but the decision making power must remain with the people – through their representative(s). This is best taken care of by an empowered MCG. This ‘solution’ will also be congruent with the spirit of the Constitution,” asserts Tripathy. Civil society activists also assert that while there is no ready framework for a GDA, the municipal corporation model is a tried and tested one, encompassing the role and functions of a complete city government. 

At a top-of-head level, the choice is between a revitalised Corporation led by a Mayor who is elected by the people, and an all-powerful new Development Authority led by a CEO who is backed by a Chief Minister. It is also between a Corporation that would generate its own funds, and an agency that is backed by a State government; between a decentralised agency and a powerful extension of the State. For MCG votaries it is a choice between having a platform for engaging and solving our problems or being a spectator. But the GDA-walas say that the choice is between a corporate-like government structure in which a powerful CEO will ensure delivery, and a government model that has just not worked. While there is some confusion on which alternative is better, the people are absolutely sure that governance must change, and the administrators of this City need to be more transparent, accessible and accountable. The choice of the new governance model may well decide the future of Gurgaon. 


DDA is the second best solution to Gurgaon’s governance issues and it does not even come remotely close to the best solution – which is that of an empowered autonomous Municipal Corporation of Gurgaon (MCG) headed by an empowered but accountable Mayor of Gurgaon. while development authorities like HUDA (and the proposed GDA) clearly have an important purpose, they often become tools to undermine urban local self governance, with the State deploying their funds in any location and for any purpose, in an opaque and discretionary manner – thus keeping the urban residents confused about who is in charge of their city. A State Development Authority’s role is basically to acquire land for the proposed new urban areas and develop these areas as per a design (including the setting up of basic civic infrastructure for residential, commercial and industrial purposes). The Authority’s source of funds comes from selling plots in the newly developed city and from collecting one-time External Development Charges (EDC) from buyers. What a development authority like HUDA is not intended for is to be a maintenance agency in perpetuity – even for the infrastructure that it develops. That is because the Constitution of India mandates that when an urban area becomes of a certain size, population wise, a local self-government (like a Municipal Corporation) is to be formed and all further development (and maintenance) functions are to be handed over to it. The Municipal Corporation is supposed to carry out a full spectrum of functions and to deliver services as mandated by our Constitution.  The delivery of these services determines the quality of life of the residents of the city and defines the character of the city.  The aim is to build a sustainable, thriving city.

A Municipal Corporation is a complete City Government, in the manner of a State (or even Central) government. It has a constitutionally defined mandate with a List of functions (just like the Union List and the State List) – see Box. It has democratically elected representatives, Councillors, for a period of five years. It has its own sources of revenue, by way of taxes and duties. However, there are two critical differences between this third tier of government and the Central and State Governments. It is these differences that undermine the ability of the Municipal Corporation to function as a truly empowered and accountable City Government. Firstly, unlike the Prime Minister and a Chief Minister, the Mayor (from among the Councillors) is not the executive head of the Municipal Corporation. That role has been reserved for a bureaucrat, the Municipal Commissioner, who reports to his seniors in the State Government and does not feel any accountability towards the Mayor or the Councillors. The second critical difference is the lack of authority and autonomy of a Municipal Corporation to be financially independent. Cities are like ATMs for a State Government, and Gurgaon is no exception. The State Government takes away a major chunk of the funds generated by the City by way of stamp duty, excise and sales tax (three main sources of funds, which from Gurgaon form roughly 50% of the Haryana Government’s total revenue!), and leaves in the Municipal Corporation’s kitty mainly property tax and an insignificant share of the stamp duty and excise. The direct fallout of these two anomalies is that MCG has seen 11 Municipal Commissioners since its formation in 2008, property tax rates have become more of a tool for appeasement by the State, and MCG’s share from stamp duty and excise has remained miniscule.

The fact is that GDA as proposed would basically ‘replace’ HUDA, but have no answer for how it would play the role, perform the functions and deliver the services, of a municipal corporation. Since the State Government cannot bring MCG under GDA (that would be a violation of our Constitution), it would mean that the multiplicity of authorities, and the resultant diffused responsibility and accountability, would remain. And corruption would continue to ooze as a vile byproduct. If at all a Gurgaon Development Authority has relevance, it is for the development of the new sectors (58 to 115) defined in the Gurgaon Master Plan 2031. The setting up of a GDA should ensure that the revenue generated from the new sectors in Gurgaon would remain with it and not get pooled into one big HUDA (Haryana) account; the thousands of crores of EDC and other revenue collected from current Gurgaon have been diverted to other cities and projects. As against this scenario, if HUDA hands over all its sectors to MCG and exits, we would effectively have one single authority in the City. MCG would of course need to be empowered with higher decision-making and financial powers. MCG should also be allowed to decide its property tax rates, get a greater share (50% or more) of stamp duty and excise, and a reasonable share of sales tax generated from Gurgaon. The City would be justified in demanding its rightful share. Further, all planning and decision-making powers, including financial, should vest with the Mayor of Gurgaon. The MCG Commissioner’s appointment, transfer and annual performance report should be decided by the Mayor (similar to what the State CM does for the Chief Secretary and the PM does for the Cabinet Secretary).

In sum, the choice between an empowered MCG and a new GDA is really one between having our own accountable city government or (continue) being remote controlled from Chandigarh; it is between taking our rightful share of the revenues generated by our city or depending on fickle largesse from the State Government; it is about making the buck stop here, not there; it is between strengthening democracy through decentralisation or weakly accepting the centralisation of power; and it is between having a platform for engaging ourselves and resolving our problems or merely becoming spectators or commentators – forever ignoring or lamenting the poor delivery and maintenance of civic and social services and amenities in the City. Indeed, many cities across the world have democratically-elected Mayors who, as executive heads, take proactive, timely and effective administrative decisions for the benefit of their cities and citizens. A recent example would vividly illustrate the point that is being made. When a pact was signed between Kyoto and Varanasi during the recent visit of PM Modi to Japan, guess who signed on behalf of Kyoto, and who for Varanasi? It was the Mayor of the city, for Kyoto; and a bureaucrat, for Varanasi. In fact India is the only G20 country (and that grouping includes Saudi Arabia) that has not adopted the system of elected and empowered City Mayors!’

This Note has been prepared by Nisha Singh,

MCG Councillor, Ward 30


The functions of the Municipal Corporation of Gurgaon, as per the Constitution and the Municipal Corporation Act of Haryana, are:

  • Urban planning, including town planning, regulation of land use and construction of buildings (including licences & approvals of building plans
  • Planning for economic and social development
  • Public amenities and services (including street lighting, street naming, road signs, parking lots, bus stops, bus stands, public conveniences, old-age homes, destitute homes, children’s homes and women’s hostels)
  • Roads, bridges, flyovers, footpaths, bus shelters, cycle lanes
  • Primary and secondary education
  • Healthcare, health centres and hospitals
  • Urban forestry, protection of the environment and promotion of ecological security
  • Parks, gardens, playgrounds, stadiums, auditoriums
  • Water supply for domestic, industrial and commercial purposes
  • Sanitation & sewerage, street cleaning and solid waste management – including recycling of waste
  • Setting up, protection, maintenance and upkeep of ponds, water bodies and rainwater harvesting systems
  • Promotion of art and culture
  • Public transport, like city bus, and regulation of auto rickshaws, cycle rickshaws and taxis
  • Street vendor licensing and regulation
  • Fire services
  • Disaster Management (natural disasters like floods and earthquakes, or manmade ones like a terrorist attack)
  • Determination and collection of house tax and other local municipal taxes
  • Vital statistics, like population census, issuance of birth, death and marriage certificates
  • Maintenance of historical monuments
  • Urban poverty alleviation
  • Control of street animals
  • Slum improvement and upgradation
  • Burials and burial grounds, cremation grounds and crematoriums


Friday Gurgaon

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