Pune's draft development plan under a cloud
A Standard & Poor-controlled firm is appointed to draft Pune's city development plan (CDP) in secrecy. An iron curtain of "don't ask us questions" appears when information about the contract is asked for. And then,
the plan itself is botched up, violating the 74th Constitutional Amendment.
07 April 2006 -
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
ExpansionDebt (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
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
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
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
month ago on 2 February. I posted my critique to both PMC and CRISIL via email
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
Tiwari admitted to me that the CRISIL deal was secret. (1 crore = 10 million)
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?
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
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?"
All the parties CRISIL, PMC and the state government -- have rebuffed
to disclose the date of the consultancy contract and the fee involved.
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.
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
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
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".
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
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
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
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