The controversy over the Centre allegedly putting up conditions for releasing funds to Tamil Nadu needs to be objectively analysed. The moot question is not about the three-language formula or the so-called Hindi imposition on the south. It’s whether states or municipal bodies can be allowed to use central funds with strings attached in the form of legitimate conditions.
It may not be the case all the time, but it’s true that at times even the Tamil Nadu government releases state grants to municipal bodies while laying down some conditions. Hence, there seems to be more politics than any genuine debate here.
True, the funds belong to taxpayers from every part of India. However, since a plurality of people have elected the BJP-led government at the Centre, it not only has the authority, but also an onerous responsibility to take decisions as promised in its manifesto.
There also does not seem to be any record to suggest that the Tamil Nadu chief minister or his party had actively opposed the three-language formula when the National Education Policy 2020 was being given its final shape through a participative process. So the state leadership should not stretch this language issue too far, especially given that, like many indigenous languages, Tamil is facing the threat of encroachment from English above all.
The bigger question is about how the national mandate needs to be dealt with by states in a federal set-up. Although delicate, this critical balance between regional and unitary approaches always comes into play when central governments, mandated to govern nationally, try to implement some policies and programmes, and a few recalcitrant states put up stiff opposition. As a result, the implementation of national agendas often go unattended. States can always blame the Centre, but then they can’t escape the blame coming from local bodies on similar grounds.
Take the Smart Cities Mission. A decade after it was launched and having been given three extensions, it’s set to end this March 31. The experience of implementing this scheme could well be described as a textbook case of how municipal corporations spend central grants recklessly. Poor planning, shoddy implementation, near-zero accountability and the habit of state governments to turn a Nelson’s eye to such things have contributed to the present situation where about 7 percent of the projects are incomplete even after the extensions.
The Parliamentary Standing Committee on Housing and Urban Affairs in 2024 took a dim view of the use of funds by local bodies, saying, “Such low utilisation of funds in the first half year is against the principle of financial propriety and also give an indication that the ministry will be forced either to reduce the scheme-wise allocations at [revised estimate] stage or will have to hasten utilisation of funds in the last quarter of the financial year.”
The report recommended the ministry to have “proper coordination with states and implementing agencies to improve the precision and reliability of budgetary projections as well as anticipating unforeseen challenges or delays”. The committee also has called upon the ministry to establish regular monitoring and feedback loops to ensure that funds are allocated efficiently and used optimally throughout the fiscal year.
Prime Minister Narendra Modi clearly stated his vision for Smart Cities at the scheme’s launch in June 2015, saying the goal was “to improve the quality of life in 100 cities by providing efficient services, robust infrastructure and sustainable solutions”. It was further stated that the scheme would be focused on economic growth, inclusivity and sustainability, and address diverse needs such as housing, transport, education, healthcare and recreation “with the goal of creating adaptable urban spaces that serve as models for other cities”.
But sadly, the net effect of the lackadaisical approach of the implementers has hampered the quality of urban life. It continues to be poor and, for no fault of its own, the blame comes to the central government.
Let’s look at the big picture. Since 2016, the central government has started an annual cleanliness survey and Indore has steadily held the first position as the cleanest city. But sadly, most municipal corporations have failed to emulate Indore’s practices.
Not just on administration, but municipalities’ financial discipline is abysmal as well. A 2023 analysis by Bengaluru-based think tank Janagraha showed that only 28 percent of Indian cities released audited financial statements, which is mandated by law. The same report also makes the shocking revelation that 39 percent of capital cities lacked active climate master plans, exposing them to heat and floods.
City-dwellers in India are craving for a reasonably good quality of urban governance. And unless we fix it, their day-to-day lives would not have a prominent feel-good factor. It’s this factor that always contributes to popular narratives.
Take the case of the 74th Constitutional Amendment—which provided constitutional status to urban local bodies—in Kerala, where the chief minister seems more eager to lambast the Centre. A 2022 report by the Comptroller and Auditor General brought out several loopholes, including that “municipalities did not use the budget as a tool for financial control and formulated unrealistic receipt and expenditure budgets”. It pointed out that out of the recommended 17, the state government had handed over only seven functions to urban local bodies.
To turn the ease of living in urban areas into a reality, municipal performance needs to be upgraded. To that end, the Centre could launch a competitive benchmarking system. Cities would be ranked on key performance indicators like waste treatment, water coverage, pedestrian encroachments and citizen satisfaction. The top performers—say, the top 20 percent evaluated—would unlock bonus funding of, say, 10 percent more than the base grants and receive faster project approvals, while the bottom-tier cities would receive only technical aid to climb up the ranks. Annual scorecards, on the lines of South Korea’s city competitiveness index, would help highlight progress, and spark healthy rivalry and accountability. This certainly would go a long way in establishing synergy with the PM’s vision of measuring action and rewarding excellence.
