Sample Material of Current Public Administration Magazine
Urban Development
Good Urban Governance - Municipal Management Perspective
The term or the concept of ‘Good Governance’ is not a new one. It is one of
the basic concepts, which the human society has confronted with political
discourse throughout the course of history. The discipline of political science
has developed with the changing meaning of this concept. The present context of
the term or concept of ‘Good Governance’ is quite different and much broader. It
is shadowed and shaped by the process of globalization, economic liberalization
and privatization.
The process of globalization, economic liberalization and privatization that
world is witnessing since 1980 (in India since 1991) is bringing about landslide
change in the philosophy behind the role of government, and in the relationship
between the state and its citizens. Citizens are perceiving themselves more as
consumers than a ‘subjects’ with respect to the government (State). Governance
is increasingly being seen as a participatory and contractual process in which
citizens wish to play a prominent role in designing, implementing and monitoring
public policies. The fact that the productivity and well being of an individual
now depends not only on his own talents and hard work, but also largely on the
quality of governance and the quality of life made possible by the government is
a new dimension acting heavily on the concept of ‘Good Governance’.
In this changing context, it has become increasingly necessary for the
government to respond to the needs of its citizens, who are now to be looked
upon as its customers, by measuring their responses to its initiatives. The
government is, now expected and is actually forced to pursue ‘Good Governance’
based on objectives of transparency, accountability and efficiency for
fulfilling its ultimate objective of the citizens’ welfare at large.
The case for ‘Good Governance’ is becoming stronger as the philosophy of
governance is changing with the rise of expectations and competitiveness in
society (especially in the urban society).
An urban local government (ULG) is a public institution concerned with
community welfare, social justice and economic prosperity of its people. The
urban local body is supposed to manage resources in public trust and (among all
tiers of government) is closest to the people. These two aspects play a prime
role in deciding the quality of the urban life and thereby the level of urban
productivity. They make the three sutras of new millennium – accountability,
transparency and efficiency, indispensable for the ‘Good Governance’ of urban
local bodies. Thus by its very nature or by its constitution it has to be
efficient, transparent and accountable to the public. The objective of ‘Good
Governance’ is not only philosophically relevant but has become a compelling
necessity for urban local bodies.
Though the philosophically relevant concept of ‘Good Urban Governance’ has
become compelling necessity, in practice it has not taken firm root in ULGs of
India. The Government of India launched this movement two years ago, but most of
the State Governments and almost all ULGs have failed to take this movement
forward. ‘Good Urban Governance’ is equated with the technology savvy cosmetic
efforts like starting single window system or GIS based information center or
automated voice response system or making some information or services available
on web or internet or putting up hi-fi touch screen kiosk etc. Good urban
governance should not be something external or cosmetic, it has to spring
internally from every aspect of an ULG and needs to integrate into its culture.
This paper is broadly divided in the four parts – Part one attempts to
describe the concepts of ‘Good Governance and Good Urban Governance’, while part
two tries to outline the management and finance function perspective of ‘Good
Urban Governance’. Part three of the paper examines management and finance
function of Indian urban local government and enumerates how it fails to deliver
‘Good Urban Governance’. The last part of the paper enlists suggested municipal
reforms from the management and finance function perspective for attaining ‘Good
Urban Governance’.
Part I
Concept of ‘Good Governance’ and ‘Good Urban Governance
Governance is "the manner in which power is exercised in the management of a
country's economic and social resources for development." For a city, governance
is the exercise of power to manage a city's economic and social development.
Traditionally governance is equated to ‘everything that government does
attain general welfare of the people. The present concept of governance is quite
different and broader. Governance is now viewed as a broader notion than
government. It involves governments (exercise of power) but also civil society
(citizens, civic institutions, etc) and management of resources. When we talk
about governance in the urban management context we are talking about all the
formal and informal laws, regulations, frameworks, systems and processes that
shape the way in which an urban local government operates.
The formal governance structures relate to the political and legal framework
in which a city operates. The informal governance structure refers to behavior,
systems and processes that have become part of the way the city does business
through non legal (informal) influences such as culture, historical traditions,
social norms, business practices etc.
From an urban local government perspective good governance means:
- Involving the community in identifying their wants and needs - this
implies that the city government will uphold democratic processes and be
accountable to the people of the city
- Developing policies and approaches to meet community needs with the
involvement of the community in the process. (For example, involving the
community in developing the strategic vision for the city)
- Making sure that all levels of the government system understand their
roles and responsibilities (and the community should also know what each
level of government is responsible for)
- Developing effective intergovernmental relationships
- Ensuring that the allocation of resources across levels of government is
fair and equitable
- Encouraging innovative management that contributes to successful
outcomes for the community
- Determining ethical standards of behavior for those working within
government (as politicians or administrators) and monitoring people's
performance to make sure they do meet those standards.
A critical element of good governance at the urban local government level is
the establishment of an inter-governmental institutional framework that:
- Clearly specifies the responsibilities of each level of government
- Provides the appropriate authority to support the delegated
responsibilities
- Specifies and enforces a code of conduct to underpin administration
- Encourages private sector and civil actors to participate in development
or management.
In addition, good urban governance requires:
- A sound public - private partnership
- Effective government and citizen interaction
Thus ‘Good Urban Governance’ refers to the legal, political and networking
framework in which good management flourishes and in which public – private
partnership and peoples participation has sufficient legitimate space. An urban
local government is now required to perform both governance and management roles
in partnership with private sector and civil societies (citizens, civil
institutions) in order to attain good urban governance.
Part II
Municipal Management Perspective of Good Urban Governance
The modern concept of Good Governance (and of-course of good urban
governance) is not confined only to improving the regulatory, maintenance and
development function of a government. Besides this governing role, it includes a
management (attaining goals by using resources efficiently and effectively)
role, partnership with private institutions and participation of civil
societies.
The concept of Good Governance essentially postulates that the government is an
organization working in social ecology and is confronted by the problems of
employing limited resources (four ‘M”s – man, machine, material and money and
now information) judiciously to achieve maximum common goals and objectives.
Thus the concept of good governance has, besides legal, political and social
perspectives two additional perspectives - one, management perspective and two,
peoples’ participation (private and civil institutions) perspective. Every
endeavour to achieve good governance inevitably must have management and
peoples’ participation perspective. This paper, as mentioned earlier, deals only
with the management perspective of good governance.
The management improvement perspective of the good governance concept has not
received due attention in India in all forms of government and governmental
organizations. The management perspective (which includes the finance function)
of good governance is much more relevant in case of urban local government than
any other level of government. This is because of its pronounced dual character.
Urban local government is not only a ‘miniature body politic’ but at the same
time it is also a ‘body corporate’. It is this ‘body corporate’ character of an
urban local government which makes management improvement perspective most
essential for attaining good urban governance. Before we outline management
perspective of good urban governance let us describe what term management and
governance mean. How can they be separated to have focused attention? And what
are the elements of good governance.
Management Role
- Management is defined as the process that ensures the goals of an
organization are achieved and resources are used efficiently and
effectively. Good management involves:
- Ensuring that the vision, goals and strategies for the organization are
determined in consultation with key stakeholders and the governing body
- Developing plans to ensure the vision, goals and strategies are achieved
- Ensuring the objective consideration of options and choices; of
advantages and disadvantages, costs and benefits and of risks
- Effectively managing the resources of the organization (people,
financial, physical) to achieve results
- Monitoring the performance of the organization and of individuals
- Adjusting strategy when the environment changes
- Accepting responsibility for performance.
Good management requires a wide range of skills and abilities including:
- The capacity to listen and learn from stakeholders and others
- The ability to provide leadership and direction in the development and
achievement of the vision
- The ability to identify issues and solve problems
- The capacity to effectively and efficiently utilize financial and
physical resources to achieve objectives i.e. Using resources in a cost
effective way to achieve the best results.
- The ability to inspire, lead and manage people (including the ability to
ensure staff have the appropriate skills, knowledge and attributes required
to do their jobs effectively.)
Governance Role
Through community driven advocacy, strategy and policymaking and through the
purchasing of products and services determined as part of the annual budget and
plan, local governments exercise their power to manage the city's economic and
social development i.e. Elected representatives perform their governance roles.
Through the delivery of quality services via contracts with public employees
or private contractors and through the enforcement of regulations, local
government management functions are performed by employees.
- Specifically, governance roles include: Strategy setting - determining,
with stakeholders, the longer term direction for the city including what
services are a priority and what are not
- Policy making - setting the framework for implementing the strategies
(for example, the city may decide its policy on transport that is it will
not provide buses; but it will support the private sector to establish an
effective bus service through subsidies, licenses etc.
- Defining service standards - this means deciding the level of service
the city will provide - For example, will the city aim for a high cost air
conditioned, frequent bus service or a low cost, basic bus type service
- Monitoring the administration's effectiveness in delivering on the
priority strategies and services
- Assuring the provision of information to the community to enable the
community to effectively participate in local government affairs.
The urban local government administration develops its strategies and
policies based on the direction for the city set by the municipal council
(usually determined by the political wing). The management role of local
government thus lies in the service delivery and enforcement of regulations.
Management roles are usually in:
- Delivery of services - this means actually making sure the services are
provided to the city either by public service provision or through private
sector provision. For example, a city may decide it will not operate a bus
system but will contract the private sector to deliver. The city will take
on the role of defining exactly what is required of the private sector
provider and select suitable providers based on their requirement. The city
will monitor the performance of all service providers and intervene when
there are problems.
- Enforcement of regulations - cities usually have rules and regulations
that they are required to administer and enforce. This may be in relation to
building (permits to build, inspections to ensure quality etc) or parking
rules or ……
Management's job is to ensure services are delivered in an efficient and
effective way to the standard required.
Elements of good government –
These elements should be reflected in the governance and management
structures and processes of the city. Good government requires
- Accountability
- Transparency
- Contestability
Accountability – Accountability means decision makers accept
responsibility for their decisions. Good governance and management requires
clarity about where responsibilities lie. Accountability means having
information available and processes applied so that those responsible for
decision-making can be called to account for their decisions.
The hierarchy of accountability for local governments will usually be - the
elected Mayor and Councilors are accountable to the public • the Municipal
Commissioner is accountable to the Mayor and Councilors • Local government staff
are responsible to the Municipal Commissioner. Being accountable means: •
Articulating collective and individual responsibilities through plans and
performance agreements • Reporting openly and honestly on progress against
achievement of those plans and performance agreements using performance
measurement of indicators • Being prepared to accept responsibility when things
go wrong (it also means receiving recognition for success.)
Transparency - Transparency relies on a presumption of access to
information about how the government works i.e. transparency means operating in
a manner that is open, honest and amenable to questions, provided there is ready
access to information...A transparent government is characterized by:
- Public ability to influence decision processes
- Public involvement on all plans and significant issues
- The development of annual plans
- Monitoring against agreed performance indicators
- Separation of strategy, policy development, regulation setting and
funding, from provision and enforcement.
Contestability - Contestability is about using competition to achieve
value for money in service delivery. There is greater evidence to suggest that
services provided by the public sector are more expensive than those provided by
the private sector. There are many reasons for this. Sometimes it is because the
public service is very inefficient; sometimes it is because the private sector
has better access to technology or resources.
Whatever be the reasons, an ULG has a responsibility to ensure that services
are provided in the most cost effective manner.
Contestability means choice in the provision of services through open
competition between potential providers. This may compel an ULG to make a choice
between public and private service provision. The outcome of contestability is
more efficient use of community resources to deliver services required by the
public. Contestability means
- There is competitive bidding for delivery of services and functions to
ensure services are delivered by the most efficient and effective means and
to the standard required
- Contracts are established between the purchaser of services (an ULG) and
the deliverers of services i.e. business (public or private)
- Creation of choices for communities for different kinds of local
facilities and services through having a mixture of providers.
- The above discussed management perspective of municipal reforms for good
urban governance can be graphically presented as shown in Figure A. Let us
now examine its functioning in the Indian urban local governments.
Part III
Management Function in Urban Local Governments
The management function described above constitutes ‘maintenance factor’ as
defined in the ‘two factor theory of motivation’ in management science. This
theory states that the presence of ‘maintenance factors’ of motivation does not
bring great fortune or employee motivation but their absence brings disaster or
great employee de-motivation to an organisation. Similarly absence of efficient
management function in Indian urban local governments is really acting against
the delivery of good urban governance to the people. The presence of efficient
management function may not bring 100 per cent good urban governance but will
certainly bring considerable good urban governance and more importantly lay
foundation or pave way for other reforms like participation of people (private
and civil institutions) to attain and to sustain good urban governance. In
following passages an attempt is made to describe the present status of
management function in Indian urban local governments and how it is hindering
good urban governance.
Planning Function
The most basic and pervasive process of human activities, it refers to
deciding in advance what actions to take and when and how to take them. It may
be a shocking statement to say that there is almost absence of planning in
Indian ULGs but it is true. How can a ULG having hundreds of employees and doing
multiple of jobs be without a planning function? There does exist planning in
ULGs but as a part of reactive or crisis management. What ULGs lack is proactive
planning culture. Vision planning or strategic planning is almost absent and
operational planning exists in a grossly inadequate manner in ULGs.
Usually one does not find a department, a section or a person in ULG
responsible specifically for planning. Rarely one can find a ULG engaged in
preparation of long-term or medium term physical planning of the city or a
development planning for urban services or even maintenance planning for
existing infrastructure or a man-power planning for ULG itself.
The proximity to the people and ever-changing day-to-day field situation has
put ULGs into crisis management or reactive management mode and kept them away
from planning. But precisely for these two reasons ULGs should have strong
planning function as it can help them to plan routine works and be ready for
exigencies or non-programmable activities.
In recent years some ULGs have shown recognition of planning aspects by
getting urban services related technical master plans and in few cases even city
development strategy from professional consultancy firms. This initiative has
paid rich dividend to these ULGs. For example preparation of technical master
plan for services development has helped ULGs of Ahmedabad, Surat and Vadodara
to bring in focus in their infrastructure development. Still it cannot be said
that planning has become integral part or culture of their management.
Organizing Function
Orgnising refers to the formal grouping of people and activities to
facilitate achievement of the organizations objectives. It’s a vehicle to
actualize plans prepared to attain common objectives. In ULGs this function is
found inadequate and evolved in an unplanned manner as explained below.
Organisation structure refers to the specific manner in which people are
grouped. Usually people are grouped on the basis of the various functions or
geographical territories or by product or service lines etc. In ULGs it is
possible to group people in different way but such grouping must have inherent
logic. In most of the municipal bodies we find mixing up of various basis of
structuring organization (grouping people). Another characteristic of municipal
organization structure in ULGs is flatness, which means that it lacks various
levels of management and has high degree of centralization. For example in
Vadodara Municipal Corporation hardly 35 officers control an organization
employing more than 11000 peoples. Similarly there is a high degree of
centralization, for example in most of the ULGs no officer other than the chief
accountant has powers to make payment. The flatness and centralization increases
the span of management of municipal officers enormously. There is absence of
clear unity of command and appropriate delegation of authority. For example the
engineering, health and field level administrative departments handle the solid
waste management function simultaneously in many ULGs.
Similarly in ULGs, which have gone for zonal administration
(decentralization) the revenue function has become subject to ambiguous unity of
command. All these problems associated with organizing are the direct outcome of
the fact that organizing function in ULGs is an evolved one rather than
structured or planned one. The net result is absence of an appropriate vehicle
to carry forward concept of good urban governance.
Staffing Function
An organization may draw up any number of ambitious plans and may structure
its organizing function logically and scientifically but if it does not have
right kind of people, it can never succeed in implementing these plans. One of
the biggest challenges is matching right people with the right jobs. ULGs
traditionally suffer in this respect. There are several reasons for this
Achilles’ heel of ULGs. To start with there does not exists formal defining of
the job, then there was rampant nepotism in earlier days, even today the
recruitment process is highly politicized. Most importantly the ULG jobs do not
have social status and are on lowest preference scale of job aspirants. In
earlier days and even today in case of many ULGs the employment or service terms
are inferior compare to other governments and governmental form of
organizations. The flatness of organsation structure has resulted in virtual
absence of ‘vertical or upward movement motivation and the excessive job
security associated with government job has put them beyond the operation of
‘positive and negative motivations‘. Motivation depends on several factors from
physical working environment, design and content of work to relationship at work
and freedom to experiment. All these factors have not been given any thought in
ULGs. There is a total absence of capacity building concept; it is very common
that a ULG employee retires after 30 years of service without getting single day
formal training. Most of the ULGs do not have in house training facility. In
simple words there is absence of concept of human resource development in most
of the ULGs. Good governance has more do with mind set, attitude and culture of
human element than any other thing like resources, technology etc. The
underdeveloped and inappropriate human element of ULGs is considerably
responsible for lack of good urban governance in India.
Decision Making Function
Underlying the processes of planning, controlling, organizing, staffing, and
leading is the all-important process of decision-making. This function implies
making rational choice between alternations. It involves defining the issue or
situation, searching of alternative solutions, evaluation of alternatives,
taking the decision and collecting feedbacks.
The legal structure of ULGs in India is such that policy-making powers are
with the elected wing represented by the council and various committees made up
of elected representatives, while executive powers or operational powers lie
with the executive, which is represented by Municipal Commissioner. This
separation of operational decisions with executive wing and policy decisions
with elected wing has truncated the decision-making process and decapitated
accountability for decisions made in ULGs. It has become conflict of human egos,
reactive (as every body waits other wing to move first), long drawn and more
importantly inconclusive. The quality of decision-making can be improved by
using modern information technology but Indian ULGs have not harnessed this
source. Non-existence of formal management information system is a common
feature one can observe in ULGs. Good governance essentially requires quick,
rational and conclusive decision-making but it is lacking in ULGs.
Finance Function
It involves the procurement of funds and their effective utilization in
business. It covers financial planning, forecasting of cash receipts and
disbursements, the realization and recovery of funds, allocation of funds, and
utilization of funds in the best possible manner, and financial control. It
deals with the three basic decisions - investment decision, financing decision,
and dividend decision. These decisions are interrelated and hence, their joint
impact must be taken into account. Management in this context means evolving
optimal combination (mix) of these decisions to maximize the wealth of the firm.
Investment Decision - Capital budgeting, a major aspect of this
decision, is the allocation of capital to investment proposals whose benefits
are to be realized in future. It also includes decision to reallocate capital
when an asset no longer economically justifies the capital committed to it.
Efficient management of current assets, liquidity etc. also forms part of this
area.
In ULGs this area of decision-making is much less than satisfactory. For
example in ULGs allocation of resources (investment decision) to various
activities is done in an adhoc manner. It lacks scientific project appraisal and
selection procedure. As a result, resources are allocated to non-priority,
non-essential or wasteful activities, while obligatory, essential works get
neglected. ULGs are not only expected to attain the objective of maximizing the
return but also the objectives of equity and social transformation (good urban
governance). The defective functioning of the investment decision-making area
has defeated this basic purpose and has drained ULGs resources through wasteful
and non-priority expenditure.
Financing Decision - This is concerned with determining the best
financing mix or capital structure for an organization. This involves deciding
upon needs and sources of new external financing. Risk, return and control are
the most crucial factors relevant in formulating the financing decision.
The financing decision area (resource augmentation) is a glaring failure of
Indian ULGs. Indian ULGs have failed to optimize whatever tax resources they
have. They have also failed to raise/develop non-tax resources. Similarly ULGs
have failed to raise adequate loans from appropriate sources at minimum possible
cost. This total failure of the financing decision-making area has left them too
starved of resources to be able to go for good urban governance.
Dividend Decision - This area of decision-making includes the
percentage of earnings paid to stockholders (citizens in case of governments),
the stability of absolute dividends over time, stock dividends and the
repurchase of stock. The value of a dividend (return) to the citizen must be
balanced against the opportunity cost of the savings lost by way of tax payment
to government.
The dividend decision area of the finance function is, many times, wrongly
considered to be non-relevant for the ULGs. The term dividend should be
understood in generic term - return. ULGs function using public money and they
provide return to the people in the form of various urban services and social
welfare activities. Thus the way a business enterprise strives to maximize the
wealth of its shareholders, municipal bodies should also strive to maximize
return or wealth to the citizens under its jurisdiction. Again this has not
happen, like other governments, ULGs have provided negative rates of return to
the people at large that is they have failed to provide good governance.
The finance function is an all-pervasive function and hence equally relevant
for ULGs. Unfortunately since the working of its three constituent decision
areas is defective, it is non-existent in all the ULGs. Other reasons for its
non-existence in ULGs are described subsequently.
Absence of Scientific and Appropriate Accounting System - Accounting
is recording, classifying and summarizing events & transactions in a meaningful
manner and interpreting the results thereof. It is a process of identifying,
measuring and communicating information to permit judgment and decision by the
users of the accounts. As the accounting system is inadequate and defective, in
ULGs it has becomes non-transparent not only to the outsiders but also to
insiders who often happen to be decision makers, and incapable of identifying
(or locating) accountability for inefficient performance. This lack of
accountability and transparency is ultimately hindering good urban governance.
Inadequate Auditing - Auditing is a corollary to the accounting
system. An independent, professional auditing system lends sanctity and
credibility to the correctness and transparency of the accounts written.
Auditing specifically serves the accountability objective as it unearths
irregularities, lapses and inefficiencies and indicates persons and events
accountable for them. The positive and constructive use of the auditing system
ultimately helps management and stakeholders to spot and remove inefficiencies.
Inadequate auditing has allowed inefficiency to perpetuate and thus indirectly
hindered good urban governance.
Absence of Financial Reporting - Disclosure norms and financial
reporting systems ensure presentation and dissemination of data, results of an
organisation to the people at large in a transparent, comparable and
user-friendly manner. An organisation may have a good accounting and auditing
system but if the financial reporting system is inappropriate then it may not
depict real picture of an organization’s performance. Thus it acts like a
magnifying glass for the society at large, helping it to know about the
efficiency with which an organisation has worked or served the society. It
provides people with an information tool through which they can demand
accountability for its performance. There is formal financial reporting system
for ULGs; even most of the Municipal Acts are silent about it. The virtual
absence of financial reporting standards and system has robbed people of an
effective tool for pressing for good urban governance.
Unaugmented Budgeting System - Budgeting, in simple terms, is
identifying what we want and devising ways to achieve it. Though historically it
evolved as a controlling tool, today it is considered a very important
management tool encompassing both planning and controlling functions. Budget in
government (public institution) context is much more than tool for management.
It is an instrument of socio-economic reforms. It is legal authorisation, a
policy document, a financial plan, an operations guide, a communication device
and basis for performance evaluation. The transparency about an organisation’s
vision stems from the structure, format of its budget. The budget provides
benchmarks for efficiency analysis and also provides modalities for fixing up
accountability. In ULGs budgeting is a highly unaugmented, ritualistic and
non-participative process. As any government gets actualized through the medium
of budget, it has turned out to be biggest stumbling block in attaining good
urban governance.
Controlling Function
Controlling provides a means of checking the progress of the plans and
correcting any deviations that may occur along the way. Planning and controlling
go hand to hand. It is difficult to conceive one without another. There can be
no control without a plan and plans cannot be successfully implemented in the
absence of control.
The type of control depends on factors to be measured and controlled. It is
meaningful only when there is a clear-cut responsibility for activities and
results. Like the other management functions, controlling is found wanting in
the ULGs as follows.
Controlling requires standards for its operation and standards are
established on the basis of plans. As plans are not made meticulously in ULGs it
becomes difficult to set standards for performance. Having set standards it is
necessary to devise a system of measuring the performance of individuals, and
departments. ULGs have not developed performance indicators and they do not use
any formal system to measure performance. The next aspect of controlling is
correcting deviations, which depends on feedback. Feedback refers to the
information about the critical control variable of the operations or activities.
Usually ULGs do not have formal feedback system based on critical control
variables of the activity.
The budget is a traditional and widely used control process but as noted
above, it fails to work as a control devise in the ULGs. Recent years computer
technology has made it possible to use sophisticated control techniques but as
computerization level is still very minimal in ULGs, even this recourse is not
used by ULGs for controlling.
The result of such a stark absence of controlling function is obvious. One
finds cost and time overruns, lack of cost control, poor resources recovery
performance etc in ULGs Not only this weak controlling remove the concept of
accountability from the minds of people working in an organization. In the wake
of weak controlling, it has become difficult to determine what is good urban
governance for a particular ULG, how to measure it, and how far the actual
performance is deviating from the standard.
The above discussion regarding the status of management function in the ULGs
clearly indicates that each and every aspect of management function in ULGs is
ridden with deficiencies, neglect and non-augmentation. Without strengthening it
or making it efficient and effective it will not be possible to have good urban
governance. Good urban governance is not something external or cosmetic, it has
to spring internally from every aspect of an ULG. It needs to become integrated
into the culture of an ULG. Starting single window system or holding ‘Lok Darbar
at regular intervals or automated voice response system or making some
information or services available on web or internet or putting up hi-fi touch
screen kiosk etc do not necessarily lead to good urban governance, but is
unfortunately being equated to those. These things do have relevance and role to
play but they can do real quality addition to governance only if its core full
of accountability, transparency and efficiency. As noted earlier management
function is the basis, foundation, or ‘maintenance factor’ of good urban
governance and until and unless it exists in the ULGs in an efficient, effective
form, the good urban governance will remain an elusive mirage. In the next part
of the paper an attempt is made to outline municipal reforms pertaining to
management and financial systems to make good urban governance possible.
Part IV
Municipal Management Reforms for Good Urban Governance
The reforms enumerated in following pages pertain to the strengthening of the
management function in ULGs to attain good urban governance. It is difficult to
prioritise these reforms, as all of these are basic or fundamental, and have
already become overdue. Ideally an ULG should adopt all of them simultaneously
at a one go, but that seems impossible. An ULG striving to deliver good urban
governance should select some of these reforms based on its own perception of
situation, requirements, resources available and commitment. It can be observed
that most of the reforms suggested are simple and mainly pertain t to
attitudinal change and common sense at the institutional level. They do not
require sophisticated technology, sizeable financial resources or professional
support. What is most important is to get started with the reforms process
(instilling willingness to reform) and to go on expanding its scope and
composition as an ULG moves forward on the path of reforms. The municipal
reforms for good urban governance can be enumerated as follows –
Separate Governance and Management Functions
Because of considering an ULG a miniature body politic till date, attention
has been paid to its governance role only, but an ULG is a body corporate also.
It is necessary to separate management function from governance function so that
adequate attention can be paid to it.
Benefits of separating governance and management functions –
Some argue that there is little to be gained by separating the roles of
governance and management. However it is experienced that separation of the two
functions will contribute to more effective city management. The benefits of
separating the two roles are hereby enlisted:
- The political objectives and goals for the city are clearly defined (by
the politicians)
- Politicians are free to concentrate on policy and performance and can
hold the City Manager accountable for effective achievement of objectives
- The administrative goals and objectives for the city are clearly defined
- Management of the organization is professionalized, to usher in higher
standards of performance
- Accountability is enhanced at all levels because the public knows who is
responsible and for what
- The risk of corruption and manipulation of the rules is reduced because
the public knows exactly what each office bearer (political or
administrative) should be doing
- Objective policy advice can be given by the Municipal Commissioner with
options and trade offs transparent
- There will be less volatile changes in standards of service provision at
times of change in political control.
Introduce Planning Function
The heading may appear surprising and trivial, but, as observed above, ULGs
are devoid of a planning culture. They should introduce an appropriate planning
function in each and every aspect of governance and inculcate an appropriate
planning culture. For achieving good urban governance, introduction of planning
function will not be sufficient, unless it is made real participative. 74th CAA
has provided one way in the form of ward or circle committees. Beside this
medium an ULG should explore all possible ways to involve people in its long and
medium term planning process. The specific municipal reforms under this head
would be –
- Preparation of long-term vision plan for the city with the involvement
of all its stakeholders. This exercise is also known as city development
strategy or city corporate plan. It should be updated at a regular time
intervals.
- All the plans to be linked with each other.
- Preparation of capital investment plan based on vision or city
development strategy.
- Preparation of financial and operational plan for implementing capital
investment plan.
- Beside such long and medium term strategy plans ULG should prepare
detailed operational plans each and every important aspects of urban
governance-management. For example vehicle replacement plan, manpower
recruitment plan, assets maintenance plan etc.
Rationalize Organising Function
Organising is a vehicle or medium through which plans get actualized. ULGs
will have to tune and tone up various apparatus of its organizing function. More
specifically an ULG should undertake the following reforms -
- Restructure and rationalize organization structure to make it logical.
An ULG may choose any factor for such grouping but once it is selected there
should be no mess up; only the logical structure should prevail.
- Increase levels of management that is reduce existing flatness. This
will reduce span of control and would also address the vertical motivation
problem to some extent.
- Review of jobs and responsibilities carried by different organizational
positions and the authority delegated to them. On basis of such evaluation
adequate delegation of authority should be carried out.
- Establishing clear unity of command by removing overlapping
jurisdictions of organizational positions. Organizational structure should
evolve out of a well thought out exercise, rather than by default or
accident.
Develop Human Resource
It is the human element, which ultimately carries out plans and controls by
using the organization structure. It communicates with the world. Good
governance is ultimately rendering satisfaction to the people at large and it
refers to the mutual interaction of different human elements. Beside specific
municipal reforms listed below regarding staffing function, good urban
governance will really require attitudinal change or change of mindset of the
people working in an ULG. For this appropriate capacity building and attitudinal
transformation, efforts will have to be taken on a sustained basis, and an
accountability fixing mechanism, to which even a common man can contribute to
catch errant ULG employees, will have to be put in practice. The other specific
municipal reforms should include -
- Professionalised recruitment procedure. Recently Vadodara Municipal
Corporation carried out its recruitment through professional agencies or two
years back Government of Gujarat recruited municipal chief officers through
GPSC.
- Measures to create social credibility to municipal jobs.
- Introduction of merit based promotion policy and creating adequate
levels in management to facilitate upward mobility.
- Infrastructure to conduct different types of training – induction,
refresher, technical beside above discussed attitudinal training.
- ULGs should improve physical and social work environment, relationships
at work and culture of freedom.
- Creation of a platform for sharing of experience, knowledge and
innovations. City Managers Association, which started in Gujarat and now
getting replicated in nine other states is a step in right direction. It has
tried to fill the void but such efforts should be complemented further.
- The political and more importantly executive leadership will have to
become decisive and ready to shoulder responsibility. The exemplary
experience of Surat, Ahmedabad, Thane and Nagpur testify to the tremendous
potential of decisive and responsible leadership to gain unprecedented
achievement from the very same municipal employees.
Decision-Making Function
- The decision-making process in ULGs needs overhauling. The present legal
structure separating policy making and operational or executive
decision-making should undergo an urgent change. The present structure has
given rise to the syndrome of authority without accountability. The
Mayor-in-council format has worked successfully in some ULGs. It should be
adopted widely. It will be in tune with the democratic polity we have
adopted. When political executive is given full decision-making powers, they
should be made equally accountable to the people for their decisions.
- In order to bring about informed decision-making, ULGs should install
sound management information systems and should make use of all means of
modern information technology.
- In order to speed up the decision-making process especially in the
general council and various committees made up of elected representatives,
the concept of ‘Guillotining’ should be introduced.
- In order to make decision making transparent in ULGs, state governments
should frame suitable transparency legislation binding to ULGs. For example
State of Karnataka has made a beginning in this direction.
- In order to make decision-making participative, the mechanism of ward
and circle committees envisaged in 74 CAA should be put in practice in right
earnest. Similar kind of other mechanism promoting peoples’ participation
should be adopted by ULGs.
Finance Function
There is urgent need to install a finance function in ULGs in place of the
present inadequate bookkeeping, procedural auditing, ritualistic budgeting and
zero financial reporting. The investment, financing and dividend decision-making
areas of finance function must be carried out in a scientific way. For this ULGs
will have to undertake following reforms –
- Adoption of modified accrual base fund accounting system. Ideally right
from the beginning it should be implemented on on-line computerization
basis. This reform is quite possible. More than 100 ULGs have implemented
this reform. For example accounting reforms have been implemented by all
ULGs of Tamil Nadu State and by individual ULGs like Vadodara, Indore, Surat,
Ahmedabad, Banglore and Ludhiana etc.
- Introduction of performance or efficiency auditing in place of
conventional procedural auditing.
- Financial reporting with adherence to accounting standards and
disclosure norms in a reasonable time frame. Special efforts to disseminate
financial results to the people.
- Adoption of Participative and performance budgeting practices. For
example efforts of Vadodara Municipal Corporation of Gujarat.
Controlling Function
- Setting up of controlling network for each critical activity point,
section or department or individual.
- The plans should be prepared and expressed in such a way that they
facilitate their conversion into standards for controlling.
- Identification of suitable performance indicators for measuring
performance.
- Creation of suitable database and information system to facilitate
measuring and evaluation of performance objectively.
- The possible deviations, which may take place with the plans, should be
thought out in advance and appropriate contingency plans should be kept
prepared to facilitate correcting deviation efforts of controlling function.
- Feedback essentially involve time lag, computer technology should to
used to speed up feedback process so that corrective actions regarding
deviations can be taken as early as possible.
Summing Up
The term ‘Good Governance’ has continuously evolved with the development of
human civilization. It has acquired much broader meaning recently in the wake of
globalization, economic liberalization and corporatisation.
Good Governance is a broader notion than good government. It involves
governments and also civil society (citizens, civic institutions, etc). Good
governance in the urban management context includes all of the laws,
regulations, frameworks, management systems and processes, social and cultural
surroundings in which an urban local government operates. Thus good urban
governance has now more of management and social overtones than political or
philosophical.
In recent years it’s the social perspective, which involves civil society in
governance that has received some attention. But the management perspective has
remained unattended in Indian ULGs. The management perspective (which obviously
includes finance function) of good governance is much more relevant in case of
an ULG than any other level of government as ULGs possess a dual character. An
ULG is not only miniature body politic but it is also a body corporate.
The management function described above constitutes ‘maintenance factor’
whose presence does not bring great fortune or employee motivation but their
absence brings disaster or demotivation to an organization. The absence of
hard-core municipal management system reforms efforts is the root cause of weak
urban governance situation in India.
Each and every aspect of management function in ULGs is riddled with the
deficiencies, neglect and non-augmentation. Without strengthening it or making
it efficient and effective it will not be possible to have good urban
governance.
There can be several reforms to strengthen management function in the role of
an ULG; it is difficult to list all of them. Some of them have been enumerated
in this paper. It is also difficult to prioritise them as all them have become
overdue and essential. An ULG striving to deliver good urban governance should
select some of these reforms based on its own perception of situation,
requirements, resources available and commitment.
Source : Dr. Ravikant Joshi, National Workshop on Municipal Reforms for
Good Governance
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