Pune's draft development plan under a cloud

Juxtapose two recent news reports. First Indian Express Pune Newsline and Loksatta reported that thousands of farmers of village Maan near Pune battled with police, opposing acquisition of over 464 hectares of their livelihood farm land for the Rajiv Gandhi IT Park Phase IV. The land was being acquired at confiscatory rates. Two villagers were admitted to hospital with police bullet wounds, and many hurt in the lathi charge. Protests continue. The adjoining hills and 587 hectares of agricultural land from villages Hinjewadi, Marunji, Wasve Bhoirwadi and part of Maan had already been acquired by the state government for phases II and III.

Second, The Hindu and The Indian Express reported on 3 March 2006 about a US-India CEO Forum citing “absence of adequate infrastructure and the bureaucracy as the reasons for lack of excitement in American companies about investing in India.” The complaint is not new; last August in Pune, foreign diplomat-guests articulated it as well. They decried the condition of Pune’s infrastructure from a Ganapati festival podium. Later some European CEOs added their mite in interviews to the press . Do not expect Foreign Direct Investment (FDI) in Pune, they said, unless quality infrastructure is assured. That, of course, includes land.

Read together with a 2003 United Nations Industrial Development Organisation report that said Pune is a Dynamic City Region because of, among other things, “the availability of huge land in prime locations coupled with the cool climate”, “Affordable Real Estate prices” and “Maharashtra government’s 3As policy (Anytime, Anyhow, Anywhere)”, the import is not lost. (The UNIDO report was ‘Dynamic City-Regions in India’, focusing on Automotive and Information Technology Industries.)

Under the Jawaharlal Nehru National Urban Renewal Mission, sixty-three cities have been identified to get thousands of crores of rupees each if the municipalities or Urban Local Bodies carry out enumerated ‘reforms’ in the by 2011.

• Bangalore’s CDP controversy

• Cutting through the urban jungle

To this, add another recent development. The Financial Institutions Reform and Expansion–Debt (FIRE-D) Project of the United States Agency for International Development (USAID) hired CRISIL (85% held by Standard & Poor Division of McGraw Hills Companies, USA), to draft Pune’s City Development Plan (CDP) under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Consenting to this are the Government of India, the Government of Maharashtra, and the local government — Pune Municipal Corporation (PMC). U.S.-owned firms are now even planning the future for the city of Pune, and, as I report in this article, governments - Centre, State and City — are agreeing to a hidden handshake on non-transparency.

Prime Minister Manmohan Singh launched JNNURM on 3 December 2005. The Mission wears its heart - urban poor - on its sleeve. Sixty-three cities have been identified to get thousands of crores of rupees each if the municipalities or Urban Local Bodies (ULBs) carry out enumerated ‘reforms’ by 2011. USAID’s Office of Economic Growth has worked out these “reforms” which include increased taxes across the board and loans to be raised from markets. Continuing the “we know what is best for you” tone, USAID has even drafted Model Municipal Act for us Indians.

Since the states have jurisdiction over local bodies under the Constitution, the Maharashtra state government’s Urban Development Department (UDD) is part of the hierarchical linking. The Centre contributes 50% of development costs. State governments will put in 20% and municipalities 30%. The City Development Plan will be the blueprint. The CDP designer gets 5% of the project costs.

In all this, the procedure followed thus far to develop Pune’s draft CDP has been a facade.

Why the iron curtain on the CRISIL deal?

Maharashtra’s UDD had already asked Delhi for Rs.8037 crores for Pune for the next five years, according to a CRISIL-PMC presentation to the state Chief Minister Vilasrao Deshmukh on 31 January 2006. It was my critique of this presentation that compelled PMC Commissioner Nitin Kareer to admit at the CDP Workshop convened by PMC and CRISIL on 3 March 2006 that a CDP proposal undisclosed to Pune’s citizens, had been forwarded to JNNURM in Delhi a month ago on 2 February. I posted my critique to both PMC and CRISIL via email and Kareer had to explain the PMC-CRISIL relationship. PMC did not choose or hire CRISIL, he said. UDD did, he claimed. In a telephonic conversation, UDD’s top bureaucrat, Principal Secretary Ramandand Tiwari admitted to me that the CRISIL deal was secret. (1 crore = 10 million)

Farzana Cooper

Earlier in response to my questioning on telephone and during in-person conference on 23 February, CRISIL’s Brijgopal Ladda also admitted that CRISIL was hired by USAID-FIRE-D but he was not free to disclose anything else. The CRISIL contract to draft Pune CDP was for 3 months. “Ask the client, PMC Commissioner,” he said. One may point out that USAID and CRISIL have both asserted that in the new municipal governance scenario, ‘transparency’ would have to be a vital value.

As non-binding advice to the state governments, the central government’s Ministry of Urban Development empanelled 29 organisations in January 2006 for preparation of ‘City Development Plans’ under JNNURM. CRISIL Infrastructure Advisory Services is one of the empanelled consultants.

The MUD said this in its note: “The State Governments/Urban Local Bodies should undertake transparent and due process in selection of organisations along with assessment of technical capacity.” (Emphasis added.) What kind of arrangement is this where USAID hires CRISIL for the PMC? Ladda repeats, “Ask your government.” The only statement Kareer made on 3 March 2006 in response to my critique and warning to use the RTI Act or the courts to pry out more information, is that PMC has not hired CRISIL, but the state government had. This itself was a change from what Kareer told some NGOs earlier that the package deal had come from Delhi! To me, Kareer asserted, “I cannot tell you, ask UDD.” And UDD’s response? Secretary Tiwari grumbled. “Why do you want to ask? I cannot tell you.” “If CRISIL gives us a good proposal, why should we go into the hiring process?” Tiwari asked.

All the parties – CRISIL, PMC and the state government — have rebuffed requests to disclose the date of the consultancy contract and the fee involved. They refuse to share any consultancy document or explain any element of the agreement or “arrangement.” They want citizens not to bother about the secrecy. I have sent queries to PMC and UDD under the Right to Information Act 2005.

The CRISIL appointment was kept out of public information domain as long as it could be. In August 2005, Kareer initiated a city development strategy (CDS) process with chosen citizens and NGOs. He did this without defining their terms of reference and nature of their work or role in the larger development planning scenario. The members included Center for Environment Education (Sanskriti Menon), Pune Transport and Traffic Forum and PARISAR (Sujit Patwardhan), Heritage Committee (Sujit Patwardhan, Arati Kirloskar), SHELTER (Pratima Joshi), National Society for Clean Cities (Gita Vir), and PMC’s city Mohalla Committees (Gita Vir and Satish Khot). Sub-groups were also formed in Water and Sanitation, Slums and land uses, Traffic, Finance and Governance, Heritage, and Environment.

The majority of the CDS members knew about the CRISIL appointment in November 2005, much before the Prime Minister announced JNNURM, but did not question the decision then. When a few activists raised questions, the CDS members rushed to Kareer and accepted foggy answers.

Then came the inevitable time when CRISIL had to come out in the open with a workshop for PMC, which was required. On the morning of 28 December 2005, Ladda rang up the CDS members, chosen as he disclosed to me, by Kareer, for a one-to-one meeting the next day. The CDS members agreed and also participated in “workshop” on 11 January 2006. Two or three CDS members then wrote a letter to Kareer questioning his decision appointing CRISIL, but he did not bother to reply. The NGOs chose not to go public on the issue or resort to the Right to Information Act.

CRISIL’s work to craft Pune’s CDP

The PMC commissioner has been extra gracious to CRISIL giving them office space and other support services. But I have been challenging CRISIL’s competence as strongly as the secrecy of the deal. CRISIL has worked with the government(s) in violating Constitutional dictates, norms of transparency and equitable opportunity for citizens and all constitutionally identified agencies/stakeholders to participate. At their last workshop on 3 March 2006 to “finalise” the CDP, both Kareer and a CRISIL team of 4 executives gave blank stares when I opened the Constitution of India and referred to the 74th Amendment.

The 74th Amendment mandates wide ranging consultations among citizens and relevant government bodies, such as connected panchayats, forest departments, etc. As a consultant to draft the CDP, CRISIL did nothing of the sort. Worse, they do not seem to know what the city is about and how to plan for a city. Pune is quartered into areas under jurisdiction of different authorities. One fourth of the core city is administered by the Cantonment Authority and the rest by the PMC. The industry-dominated Pimpri-Chinchwad has its own Municipal Commissioner. About 3 years ago, 23 villages were added to the city described as Extended Areas (EA).

CRISIL-PMC did not consult with even the Cantonment Authority, which has jurisdiction over the most famous of Pune’s areas, known as the Camp. No stakeholder from even the oldest core of the city known as the Peths was contacted, and likewise, no one from the EA. Evidence of this is in the details of CRISIL meetings with “stakeholders” the outcomes of which are posted on the PMC website, which has the draft CDP. (www.egovpmc.com/tp/cdp.asp)

In the 31 January presentation, CRISIL-PMC slated a budget of Rs.2812.50 lakhs for “Parks & Play grounds”. When I called Yashwant Khaire, Pune’s famous Garden Chief, he said he was not aware of this and CRISIL did not interact with him on the subject. (10 lakh = 1 million)

Furthermore, typical introductions of Pune in official documents begins with description of the city as ‘Culture Capital of Maharashtra” and as the “Oxford of the East.” CRISIL has conveniently used these terms, but has not held stakeholder seminars with cultural groups or even the prestigious, internationally renowned performing arts organisations. That speaks for itself.

It is not that there was no consultation at all. PMC Commissioner Kareer chose, and invited, a number of NGOs as stakeholders to work alongside CRISIL. But there was no response from to the critique that CRISIL-PMC have not gone through a larger consultation process with stakeholders such as those noted above.

When I called the Chief Minister’s Secretary Subhash Lalla to talk to him about violation of the Constitution by PMC and UDD, he chose not to take the call.

Kareer and Ladda assured me on 3 March, a month after secretly submitting the draft plan to JNNURM, that all the potential stakeholders such as educationists, Peth residents, etc., would be consulted. The next day Ladda went back to his office in Hyderabad and four working days after the public promise, Kareer was in Delhi and Mumbai for the final touches to the proposal. And while CRISIL-PMC has been continuing to go through “consultation workshops” with the NGOs, the USAID-CRISIL-JNNURM-UDD-PMC “city development” agenda stayed under the public radar screen, moving through a secret channel since 31 January 2006.

Ultimately, the “development” plan that CRISIL has drafted is for construction of flyovers, tunnels, wider roads and slum relocation (read “demolition”). The cost? Increase in taxes on property, water, roads, etc., plus additional “user” levies on water, sanitation and other such taxes.

The data and research

CRISIL-PMC’s data is itself admittedly secondary. Recording this in their final draft itself is a nice trick – it enables to shrug off flaws and discrepancies. In some cases, they have not even bothered disclose the source.

For instance, in the CRISIL-PMC presentation to the Chief Minister and the State Level JNNURM Committee on 31 January, it is claimed that 33% of 3,500,000 Puneites live in slums. In the Action Plan Draft posted on PMC website, it is recorded that 40.38% population is in slums. A difference of 2,60,000 people! The PMC like all urban local bodies sets cut-off dates for slums, which defines tenure. Does the difference in the numbers mean constructing or demolishing 57800 dwelling units? (PMC surveys indicate that there 4.5 persons per slum household, and hence this number.) The process of demolishing “unauthorised” slums on select sites is already on.

CRISIL had appointed a research organisation HANSA which has offices in Mumbai, Chennai and Delhi, to survey citizens on a mixed bag of questions. HANSA claims to have surveyed 3700 persons from all 14 wards of Pune across all economic classes - from slums to the high earners. The survey concludes that all classes across the board are quite satisfied with PMC services and have the same expectations! CRISIL could not answer questions on the survey raised by economists and academicians.

For example, in some wards the slum or low-income-group population is greater than middle class and in some wards high rise buildings and multilevel housing societies rule the roast. The questioners wanted to know how these differentials were dealt with both for sample selection and service satisfaction. Also for the alleged 65% satisfaction with municipal services – what was the community, class and ward wise response and how was this brought into the statistical method? Eventually, Commissioner Kareer took over to promise answers on method and data. So what, then, is CRISIL’s expertise? And how credible is HANSA?

Projection of revenues and land availability

At the 3 March CRISIL-PMC “workshop” to which the CDS and a few others with whom Ladda had interacted were invited, CRISIL displayed a slide showing that PMC revenues, which were at a low 29% would rise dramatically to 72% after “reforms”. When questioned, CRISIL could not explain this. Kareer intervened to say it would be through an 85% improvement in property tax collection, a double entry accounting system, higher tax rates, etc., but could not say which count would get how much. The PMC commissioner then promised to work it out! It may be recalled that the PMC has been claiming for the past few months that their property tax collection is at 85% of taxes due! “We are still discovering some unassessed properties,” Kareer claimed.

In reality, recovery of property taxes in Pune is a huge scandal. On 31 March 2006, Loksatta front- paged the recovery of several bundles of property tax bills which should have been served in October-November 2005, and were not. At a meeting convened by the NGO Nagari Chetana Manch on 12 January 2005, citizens forcefully demanded that Kareer should at least send notices for recovery from the big guns. Only then notices were sent and around Rs.35 crores were recovered in a week. The only “reform” PMC has done is to introduce a double entry accounting system.

PMC is variously described by many as an inefficient and corrupt body. Even the PMC admits to this. Top officials of PMC are accused in scams involving hundreds of crores of rupees. What would change in PMC in the next few months?

CRISIL-PMC also presented to JNNURM that a lot of land is available, but no actual figures have been given. Nor is it explained that currently land prices vary from Rs.1 crore an acre to Rs.20 crores an acre or that the land prices have risen 3-4 times last year!

The berg under the tip is that local citizens are deprived of land and pushed into joblessness, economic insecurity, to give private companies, often multinationals, their pound of flesh in return for FDI.

The IT and IT-enabled services firms get 100% additional FSI, huge stamp duty discounts, flat 4% sales tax, no electricity duty, labour at subsistence wage, and above all cheap land acquired at confiscatory rates from villagers and helpless citizens by the Maharashtra Industrial Development Corporation(MIDC).

Note that during the first land acquisition phase for the Rajiv Gandhi IT Park, Maan villagers were paid Rs.16 lakhs per hectare, i.e. about Rs.7 lakhs per acre while the builders believe they bought cheaply at Rs.30 lakhs per acre. Perhaps hidden in the “lots of land” claim is the government’s intention to use the confiscatory land laws against hapless citizens, go for hinterland village farm lands (imploding insecurity in lives of rural folks) and resort to transfer of development rights and floor space index (FSI) augmentation in return for land for works such as road widening.

Farmers are also promised industrial space for small scale units and shop units but they say they do not know industry and trade. They cannot simply change over from generations of farming to entrepreneurship. But unlike the foreign “investors” who want to expand production capacity and markets for their companies, local farmers have no choices about their kind of work, their roots, their economic security, and their future.

JNNURM Delhi thumbs down the draft plan

In one positive development, the JNNURM department at Delhi seems to have had problems with the Pune CDP. On 20 March 2006, days after they were to have wound up their work as per the 3-month contract, CRISIL’s Ladda said they were redoing their report, the CDP, the investment plan and the figures. “I cannot give you any fresh figures now we are still working them out. The final draft posted on PMC website was not really a integrated document. But I am incorporating some of your points,” he told me.

On 25 March, Indian Express Pune Newsline quoted Kareer’s claims that the CDP could not go through because corporators had not allowed him to raise property taxes! What the citizens needed to know was that JNNURM reforms are to be carried out by 2011, and that they include other actions such as accounting transparency and repeal of Urban Land Ceiling Act and Rent Act by the state government. But the Government of Maharashtra has declared that ULCA would continue apply to Pune. It has now emerged that a new workshop is being held at the PMC premises on 15 April. The National Society for Clean Cities led by Satish Khot is helping with the arrangements.

That the CRISIL-PMC deal remained shrouded in secrecy is a cause for concern. An U.S.-owned firm is planning the future for the city of Pune, under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), with all our governments — Centre, State and City — agreeing to a hidden handshake on non-transparency and violating the Constitution. If this is so in the case of Pune, it may be ditto for other cities brought under JNNURM.