Recent developments in Bangalore and other major municipalities have brought an old demon to the surface again. The chief minister's ABIDe's committee has released its reports on the Plan for Bengaluru 2020 into the public domain. One hears regularly about ABIDe's support or non-support to several plans, such as that for a High Speed Rail Link to the new Bengaluru International Airport said to cost between Rs.4,000-10,000 crores.

In the name of good governance, decision-making powers in Karnataka are being given to parastatal organizations and non-elected task forces. Para-statals are semi-government organisations, companies or agencies owned or controlled wholly or partly by the government, which have their own governing boards. There definitely is a need for parastatals or other agencies to provide the technical data, expertise and support to elected representatives to enable them to take suitable policy decisions. But what if they are given the power of decision-making itself?

Most of the reforms adopted by Karnataka to bring in such so-called good governance measures, are mandatory conditions to loans provided by International Financial Institutions (IFIs). According to the World Bank, good governance needs good institutions; the Bank has pushed for the creation of parastatals. Only tokenistic approvals for the projects and programmes of parastatals were obtained from elected bodies. A recent brainstorming on the issue by several activist groups provided much food for thought. People, in general seem to believe that good governance refers to government agencies which work on behalf of the people.

"The democratic state is like your mother. If your mother is ill, will you take her to hospital and get her cured or exchange her for another?"
Nandini, ActionAid

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The real intent of creating multiple parastatals by the IFIs was to keep at bay what was considered to be "unwanted politicians' interference", undermining the very basis of democracy, says Lalitha Kamath, an independent urban researcher. Kamath, formerly a trustee of Bangalore-based CASUMM (Collaborative for the Advancement of Studies on Urbanism through Multi-Media), is the author of a number of research papers including urban governance and public-private partnerships.

Out-sourcing of governance functions happens in a variety of ways. "Special Purpose Vehicles (SPVs) set up for specific purposes, such as the Karnataka Urban Infrastructure Development & Finance Corporation (KUIDFC), the Bangalore International Airports Authority (BIAA) set up to plan for a specific area that falls under the planning authority of BBMP, Project Management Units, Public-Private-Partnerships, intermediaries to route funds, such as NUIF, intermediaries to mobilise people's participation, such as 'Sustain' in Chennai, all reinforce privatisation of governance. Increased participation of the private sector in consultancies, credit-rating agencies, etc., turns the focus of governance on financial viability of government institutions and not on citizens' needs," says Kamath.

In exchange of loans from foreign banks, KUIDFC gets the state government to sign up to associated conditionalities including amendments to state laws and policies that protect corporate interests at the cost of the larger social security of the people of the state. KUIDFC pays Rs. 25,000 per day to consultants who are usually outsiders and know nothing of local realities. KUIDFC deals with projects worth Rs.60,000 crores which should, in fact, have been routed through the government's line departments, which have their own internal checks and balance systems. Though KUIDFC does come under the state's Urban Development Department, it is not accountable to the urban local bodies for whom it prepares projects and policies.

"The Karnataka Urban Poor Water & Sanitation Policy was prepared by an American Ph D student for KUIDFC," says Isaac Arul Selva of the Campaign Against Water Privatisation.

Now almost 70 per cent tasks, according to Kamath, and even functions such as planning, are being outsourced - a case in point being that of Price-Waterhouse-Coopers which is doing the planning for the Karnataka Government, a task which used to be done by the State Planning Board. The nineties had already seen an increase in the number and forms of parastatals along with an increase in outsourcing of government activities to the private sector.

Vinod Vyasulu of the Bangalore-based Centre for Budget & Policy Studies (CBPS) points out that Sarva Shiksha Abhiyan is an avatar of the State Education Department and it has taken over the functions that the department should have been performing. "The SSA is a parallel body to the elected local bodies and does not come under the Zilla, Taluk or Grama Panchayats," says Lalitha Chandrashekar, another urban researcher. A case against parallel bodies has reportedly been made by a Parliamentary Standing Committee in August 2005.

Even in the implementation of the Jawaharlal Nehru National Urban Renewal Mission, the role of the urban local bodies (ULBs) (city municipalities) in planning for their cities is minimal. A National Steering Group, a Technical Advisory Group (TAG), appraisal agencies such as the National Institute of Urban Affairs (NIUA), NIFPF, and independent consultants are appraising city plans, which are not sufficiently publicized. Similar is the situation at state level with a state-level steering group and TAG.

Functioning in a democratic vacuum

Elected representatives or councils have no role in these. This while the legitimate planning bodies under the 74th Constitutional Amendment, such as the District Planning Committees and the Metropolitan Planning Committee for Bangalore comprising elected representatives, which are supposed to consolidate grassroots plans, have either not been set up or are dysfunctional. In Bengaluru, which has not had an elected council for nearly two years, the city municipal administration (BBMP) is really not functioning as a local self-government and ward committees are dysfunctional.

Planning bodies such as the Bangalore Development Authority (BDA) and the Karnataka Industrial Areas Development Board (KIADB) also have no elected representatives on their boards and are not accountable to local governments. "The plans being made by these bodies, such as the creation of industrial parks, SEZs, and toll roads such as the Bangalore-Mysore Infrastructure Corridor (BMIC) built by NICE, are resulting in a net transfer of land from poorer to richer groups. With land rates going up, land is becoming increasingly unaffordable for the poor," says Lalitha Kamath.

The IFIs are constantly looking for agencies who can borrow money from them. By lending to parastatals, they are able to by-pass resistance to loans that might otherwise come up through grassroots movements and elected bodies, as such loans to parastatals never get discussed in the legislature. Vinod Vyasulu calls bureaucrats heading parastatals "peons of the IFIs". "Parastatals are neo-colonial companies for profit," says Y J Rajendra, social activist and faculty of St.Joseph's College, Bangalore. Kshitij Urs, Regional Director, Action Aid, calls them "the arms of imperialism".

The Karnataka Urban Development and Coastal Management Project (KUDCEMP), pushed by KUIDFC and supported by the ADB took on work in the amount of Rs.3,000 crores. This resulted in several unviable projects in cities like Karwar, Ramanagaram, Channapatna and Tumkur, says Gururaj Budhya of the Urban Research Centre based in Mangalore. Several municipalities thought the money was a grant whereas it was a loan. If some municipalities resisted signing up to the loans, they were often bulldozed into passing the resolutions and threatened with supercession if they did not. Finally they ended up being unable to re-pay the loans.

"What needs to be seriously questioned is also the fact that parastatals are not subject to government laws and that their accounts are not audited by the Accountant-General but by private chartered accountants," says Vyasulu. Hence the slogan being coined by activists is: "Shut down parastatals; empower local governments".

Task Forces, such as the Bangalore (erstwhile) and Mysore Agenda Task Forces (BATF, MATF), IT Task Force, etc, and now ABIDe, are increasingly taking decisions that should be taken by elected representatives of urban local bodies (ULBs). These task-forces have not been created through any legislation. Further, such task forces often represent one section of society to the exclusion of others. BATF, for instance, had representatives only from the corporate sector.

Take the case of ABIDe's report. The governance reform report prepared by ABIDe does not even make a reference to the 74th constitutional amendment on local government reforms. While the governance report has several good points, it is also silent on several key aspects. For instance, what is the relation between the ward committee and the Neighbourhood Area Committee? What are their respective functions? How do they fulfill the key function of ULBs envisaged in the 74th CA? The Kasturirangan Committee was also set up to make recommendations on Bangalore's governance. What happened to that report? Now why another report co-authored by Dr A Ravindra, former state chief secretary who was a member of the Kasturirangan committee as well?

Whatever has been recommended by ABIDE or Kasturirangan Committee or other groups would have to be discussed and debated by the public and their suggestions taken, and not just on the internet. The drafts would then have to be discussed in the state legislature, and may be by a joint legislative committee, which would again consult citizens/groups. Right now the democratic process is completely missing.

A senior Bruhath Bengaluru Mahanagara Palike (BBMP) official referred to the members of the newly formed ABIDe (Agenda for Bangalore's Infrastructure Development) as "the elite" of society, almost implying that other stakeholders in society are not "elite". He was speaking at a meeting of a Karnataka High Court-setup committee on road-widening, in response to a PIL filed by city-based NGOs. These task forces often have no representatives from mass-based organizations/movements of the urban poor, dalits, farmers, etc. They may have individuals representing non-governmental organizations who cannot be said to represent the poor themselves.

While there is need to get people's participation in decision-making, this needs to be through institutionalised mechanisms and transparent processes and not through ad hoc and non-transparent measures. "Who are the members of these task forces, whom do they represent, what is the process through which they are selected, what is their agenda, what is their right and who gave it to them, and to whom are they accountable?" are the questions being raised by activists. "Why can't we have people's taskforces?" questions Rajendra.

Parastatals are illegitimate and unaccountable, even as they are created by people elected to high-office such as chief ministers themselves. But one needs to ask whether parastatals have been set up to deliberately by-pass democratic and statutory institutions, given the fact that these (democratic and statutory) institutions have degenerated and abdicated their functions.

Degeneration - local elected governments

If policies and projects are not being debated by the municipal councils and legislatures, whose fault is it? There is overall decline in the way elected institutions are functioning. During the last year, Parliament, for instance, met only for 50 days and passed almost all bills without discussion. The same could be true of most State Assemblies.

The elected council of Mangalore demanded minutes of all the meetings between the parastatal KUIDFC and the funding IFI, the ADB, and the signed agreement documents under the KUDCEM Project approved in 1999.

The council studied them, opposed the sewerage project as conceived, and sought changes. Finally, local engineers helped to prepare alternative reports, which were more acceptable.

 •  Street fight over road-widening
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Has the approval by legitimate institutions of the state for projects of the parastatals become "tokenistic" because elected representatives are failing to do their homework regarding them? That elected councillors do not do their homework was accepted by the former deputy mayor of Mysore, Pushpavalli, who narrated that only 10 councillors knew of the water supply privatisation project for Mysore and the Mayor was happily ignorant of the possible consequences. Documents of the privatisation agreements are still not available with councillors. There was no quorum when the discussion was held in the council.

A rare case of a local elected government standing up to a bullying parastatal comes from Mangalore. Suresh Shetty, an ex-corporator, relates how the then elected council of Mangalore demanded minutes of all the meetings between the parastatal KUIDFC and the funding IFI, the ADB, and the signed agreement documents under the KUDCEM Project approved in 1999. The council studied them, opposed the sewerage project as conceived, and sought changes. Finally, local engineers helped to prepare alternative reports, which were more acceptable. This is an example of what a local council can do to protect the interests of the city when it does its homework thoroughly, said Suresh Shetty.

But all elected bodies are not like the Mangalore council. Our leaders have a history of abdicating their responsibilities. The story is told of how the Nawab of Oudh spent his time singing ghazals and watching dancing girls, while his courtiers were busy playing chess, which provided a fertile ground for Lord Dalhousie to grab his kingdom. Are we facing a similar situation? With their preoccupation with dividing and sub-dividing people on the basis of caste, creed, language, region and religion, etc., creating imaginary demons and scoring political points over opponents, do elected bodies even have the time to discuss serious policy matters?

Are the parastatals, IFIs and MNCs taking up contracts with the state government merely filling the vacuum and occupying the space vacated by the abdication of responsibilities by the democratically elected representatives?

Closing the loop: political birth of parastatals and task-forces

Moreover, one needs to recall that the BATF and ABIDe were set up by none other than the democratically elected CMs of the State. And the major resistance to decentralisation and the empowerment of local governments is coming from the state-level elected representatives themselves.

A case in point is that Bangalore has been without an elected city council for the past two years, thanks to the failure of the elected government at state level to order elections, despite High Court directives and contempt notices. Resistance to institutionalised people's participation through ward committees, and grama sabhas, etc., is also coming from elected local councillors and MLAs.

Activists, such as Nandini of ActionAid counter by asking, "The democratic state is like your mother. If your mother is ill, will you take her to hospital and get her cured or exchange her for another?"

But mere parastatal and task-force bashing will not do. We need to recognise the complicity of democratically elected institutions with the parastatals, task forces, IFIs and the corporate sector in continuing to undermine constitutionally-sanctioned accountability mechanisms.

We take much pride in being a democratic country and state. But who is really running our state? Are the elected representatives, the kern of our democracy, really running it? Or have we mortgaged our decision-making powers to persons and institutions unaccountable to the people? These questions are being raised increasingly.