The Election Commission has announced the schedule for the election of the President of India. The last date for nominations is June 30, elections will be held on July 19, and counting will take place on July 22. The BJD and AIADMK have proposed the name of Mr. P.A. Sangma. The Samajwadi Party and Trinamool Congress have suggested three names. Other parties or alliances have not announced any contenders. Our calculations show that no single party or alliance has the numbers to unilaterally elect candidates of its choice. A candidate will need 5,48,507 votes to be elected as the President. If the UPA were to vote as a consolidated block, its vote tally would reach 4,49,847 (41% of the total votes). Among the Congress allies, Trinamool holds the largest number of votes (47,898). If Trinamool decides to support some other candidate, the UPA tally will fall to 4,01,949 votes (37% of the total). The votes held by the major alliances are given in the table below:
Coalition | Value of votes | Percentage of total votes |
UPA |
4,49,847 |
41.0% |
NDA |
3,03,912 |
27.7% |
Left |
52,282 |
4.8% |
Bahujan Samaj Party |
43,723 |
4.0% |
Samajwadi Party |
68,943 |
6.3% |
Biju Janata Dal |
30,215 |
2.8% |
AIADMK |
36,216 |
3.3% |
Others |
1,11,874 |
10.2% |
Total |
10,97,012 |
|
Minimum required to be elected |
5,48,507 |
|
A detailed break-up of votes held by each party is given in the table below:
Party | Value of votes | Percentage of total votes |
Indian National Congress |
3,31,855 |
30.30% |
Bharatiya Janata Party |
2,32,454 |
21.20% |
Samajwadi Party |
68,943 |
6.30% |
All India Trinamool Congress |
47,898 |
4.40% |
Bahujan Samaj Party |
43,723 |
4.00% |
Janata Dal (United) |
41,574 |
3.80% |
All India Anna Dravida Munnetra Kazhagam (AIADMK) |
36,216 |
3.30% |
Communist Party of India (Marxist) |
35,734 |
3.30% |
Biju Janata Dal |
30,215 |
2.80% |
Nationalist Congress Party |
24,058 |
2.20% |
Independent |
23,830 |
2.20% |
Dravida Munnetra Kazhagam (DMK) |
21,780 |
2.00% |
Telugu Desam Party |
21,256 |
1.90% |
Shiv Sena |
18,320 |
1.70% |
Shiromani Akali Dal |
11,564 |
1.10% |
Communist Party of India |
9,758 |
0.90% |
Rashtriya Janata Dal |
8,816 |
0.80% |
Others |
7,420 |
0.70% |
Janata Dal (Secular) |
6,138 |
0.60% |
Jammu and Kashmir National Conference |
5,556 |
0.50% |
Rashtriya Lok Dal |
5,412 |
0.50% |
Desiya Murpokku Dravida Kazhaga (DMDK) |
5,104 |
0.50% |
Jharkhand Mukti Morcha |
4,584 |
0.40% |
Muslim League Kerala State Committee |
4,456 |
0.40% |
Indian National Lok Dal |
4,068 |
0.40% |
All India Forward Bloc |
3,961 |
0.40% |
Jharkhand Vikas Morcha |
3,352 |
0.30% |
Asom Gana Parishad |
3,284 |
0.30% |
Telangana Rashtra Samiti |
3,044 |
0.30% |
Revolutionary Socialist Party |
2,829 |
0.30% |
Bodoland People's Front |
2,808 |
0.30% |
All India United Democratic Front |
2,796 |
0.30% |
Praja Rajyam Party |
2,664 |
0.20% |
Maharashtra Navnirman Sena |
2,275 |
0.20% |
Kerala Congress (M) |
2,076 |
0.20% |
All India Majlis-e-Ittehadul Muslimeen |
1,744 |
0.20% |
Nagaland People's Front |
1,722 |
0.20% |
Sikkim Democratic Front |
1,640 |
0.10% |
Peoples Democratic Party |
1,512 |
0.10% |
Bahujan Vikas Aaghadi |
1,058 |
0.10% |
Lok Janasakti Party |
957 |
0.10% |
All Jharkhand Students Union |
880 |
0.10% |
Haryana Janhit Congress |
820 |
0.10% |
Mizo National Front |
732 |
0.10% |
Marumalarchi Dravida Munnetra Kazhagam |
708 |
0.10% |
Swabhimani Paksha |
708 |
0.10% |
Viduthalai Chiruthaigal Katchi |
708 |
0.10% |
YSR Congress Party |
708 |
0.10% |
Peasants and Workers Party |
700 |
0.10% |
Pattali Makkal Katchi |
528 |
0.00% |
Manithaneya Makkal Katch |
352 |
0.00% |
Puthiya Tamilaga |
352 |
0.00% |
All India NR Congress |
240 |
0.00% |
J&K National Panthers Party |
216 |
0.00% |
Communist Party of India (Marxist-Leninist) |
176 |
0.00% |
United Democratic Party |
153 |
0.00% |
Lok Satta Party |
148 |
0.00% |
Loktantrik Samajwadi Party |
129 |
0.00% |
J&K Democratic Party Nationalist |
72 |
0.00% |
People's Democratic Front |
72 |
0.00% |
Uttarakhand Kranti Dal |
64 |
0.00% |
Maharashtrawadi Gomantak Party |
60 |
0.00% |
People's Party of Arunachal |
32 |
0.00% |
Total |
10,97,012 |
|
Notes: The electoral college for the Presidential election consists of the elected members of Lok Sabha, Rajya Sabha and all Legislative Assemblies. The winning candidate must secure at least 50% of the total value of votes polled. Each MP/ MLA’s vote has a pre-determined value based on the population they represent. For instance, an MP’s vote has a value of 708, an MLA from UP has a vote value of 208 and an MLA from Sikkim has a vote value of 7 (Note that all MPs, irrespective of the constituency or State they represent, have equal vote value). Parties in various coalitions: UPA: Congress, Trinamool, DMK, NCP,Rashtriya Lok Dal, J&K National Conference, Muslim League Kerala State Committee, Kerala Congress (M), All India Majlis-e-Ittehadul Muslimeen, Sikkim Democratic Front, Praja Rajyam Party, Viduthalai Chiruthaigal Katchi NDA: BJP, JD(U), Shiv Sena, Shiromani Akali Dal, Janata Party Left: CPI(M), CPI, Revolutionary Socialist Party, All India Forward Bloc
India’s urban population has grown by 32% from 2001 to 2011 as compared to 18% growth in total population of the country.[1] As per Census 2011, 31% of the country’s population (377 million people) live in cities, and contribute to 63% of the country’s GDP.[2] The urban population is projected to grow up to 600 million by 2031.2 With increasing urban population, the need for providing better infrastructure and services in cities is increasing.[3] The government has introduced several schemes to address different urban issues. These include the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart Cities Mission, Heritage City Development and Augmentation Yojana (HRIDAY), Pradhan Mantri Awas Yojana – Housing for All (Urban) (PMAY-U), and Swachh Bharat Mission (Urban).
Last week the Ministry of Urban Development released the next batch of winners under the Smart Cities Mission.[4] This takes the number of smart cities to 90. The government has also announced a few policies and released data indicators to help with the implementation of the urban schemes. In light of all this, we discuss how the new schemes are changing the mandate of urban development, the fiscal challenge of implementing such schemes, and the policies that are trying to address some of these challenges.
Urbanisation in India
The Jawaharlal Nehru National Urban Renewal Mission (JnNURM), launched in 2005, was one of the first urban development schemes implemented by the central government. Under JnNURM, the central government specified certain mandatory and optional reforms for cities, and provided assistance to the state governments and cities that were linked to the implementation of these reforms. JnNURM focused on improving urban infrastructure and service delivery, community participation, and accountability of city governments towards citizens.
In comparison, the new urban schemes move beyond the mandate that was set by JnNURM. While AMRUT captures most of the objectives under JnNURM, the other schemes seek to address issues around sanitation (through Swachh Bharat), affordable housing (through PMAY-U), and technology innovation (through Smart Cities). Further, the new schemes seek to decentralize the planning process to the city and state level, by giving them more decision making powers.2 So, while earlier, majority of the funding came from the central and state governments, now, a significant share of the funding needs to be raised by the cities themselves.
For example, under the Smart Cities Mission, the total cost of projects proposed by the 60 smart cities (winners from the earlier rounds) is Rs 1.3 lakh crore.[5] About 42% of this amount will come from central and state funding towards the Mission, and the rest will be raised by the cities.[6]
The new schemes suggest that cities may raise these funds through: (i) their own resources such as collection of user fees, land monetization, property taxes, etc., (ii) finance mechanisms such as municipal bonds, (iii) leveraging borrowings from financial institutions, and (iv) the private sector through Public Private Partnerships (PPPs).[7]
In 2011, an Expert Committee on Indian Urban Infrastructure and Services (HPEC) had projected that creation of the required urban infrastructure would translate into an investment of Rs 97,500 crore to Rs 1,95,000 crore annually.[8] The current urban schemes are investing around Rs 32,500 crore annually.
Financial capacity of cities
Currently, the different sources of revenue that municipal corporations have access to include: (i) tax revenue (property tax, tax on electricity, toll tax, entertainment tax), (ii) non-tax revenue (user charges, building permission fees, sale and hire charges), (iii) grants-in-aid (from state and central governments), and (iv) debt (loans borrowed from financial institutions and banks, and municipal bonds).
While cities are now required to raise more financing for urban projects, they do not have the required fiscal and technical capacity.8,[9] The HPEC had observed that cities in India are among the weakest in the world, both in terms of capacity to raise resources and financial autonomy. Even though cities have been getting higher allocations from the centre and states, their own tax bases are narrow.8 Further, several taxes that cities can levy are still mandated by the state government. Because of their poor governance and financial situation, cities also find it difficult to access external financing.8,7
In order to help cities improve their finances, the government has introduced a few policies, and released a few indicators. Some of these are discussed below:
Policy proposals and data indicators
Value Capture Financing (VCF): The VCF policy framework was introduced by the Ministry of Urban Development in February 2017.[10] VCF is a principle that states that people benefiting from public investments in infrastructure should pay for it. Currently when governments invest in roads, airports and industries in an area, private property owners in that area benefit from it. However, governments recover only a limited value from such investments, constraining their ability to make further public investments elsewhere. VCF helps in capturing a part of the increment in the value of land due to such investments, and use it to fund new infrastructure projects.
The different instruments of VCF include: land value tax, fee for changing land use, betterment levy, development charges, transfer of development rights, and land pooling systems.10 For example, Karnataka uses certain value capture methods to fund its mass transit projects. The Mumbai Metropolitan Region Development Authority (MMRDA), and City and Industrial Development Corporation Limited (CIDCO) have used betterment levy (tax levied on land that has gained in value because of public infrastructure investments) to finance infrastructure projects.
Municipal bonds: Municipal bonds are bonds issued by urban local bodies (municipal corporations or entities owned by municipal bodies) to raise money for financing specific projects such as infrastructure projects. The Securities and Exchange Board of India regulations (2015) regarding municipal bonds provide that, to issue such bonds, municipalities must: (i) not have negative net worth in any of the three preceding financial years, and (ii) not have defaulted in any loan repayments in the last one year.[11] Therefore, a city’s performance in the bond market depends on its fiscal performance. One of the ways to determine a city’s financial health is through credit ratings.
Credit rating of cities: In September 2016, the Ministry of Urban Development started assigning cities with credit ratings.[12] These credit ratings were assigned based on assets and liabilities of the cities, revenue streams, resources available for capital investments, accounting practices, and other governance practices.
Of the total 20 ratings ranging from AAA to D, BBB– is the ‘Investment Grade’ rating and cities rated below BBB– need to undertake necessary interventions to improve their ratings for obtaining positive response to the Municipal Bonds to be issued. By March 2017, 94 cities were assigned credit ratings, 55 of which got ‘investment grade’ ratings.[13]
Credit ratings indicate what projects might be more lucrative for investments. This, in turn, helps investors decide where to invest and determine the terms of such investments (based on the expected returns).
Earlier this month, the Pune Municipal Corporation raised Rs 200 crore through the sale of municipal bonds, to finance water supply projects under the Smart Cities Mission.[14] The city had received an AA+ credit rating (second highest rating) in the recent credit rankings assigned by the central government.
Other than credit ratings, the Ministry of Urban Development has also come up with other data indicators around cities such as the Swachh Bharat rankings, and the City Liveability Index (measuring mobility, access to healthcare and education, employment opportunities, etc). These rankings seek to foster a sense of competition across cities, and also help them map their performances year on year.
Some financing mechanisms, such as municipal bonds, have been around in India for the last two decades, but cities haven’t been able to make much use of them. It remains to be seen whether the introduction of indicators such as credit ratings helps the municipal bond market take off. While these mechanisms may improve the finances of cities, the question is would more funding solve the cities’ problems. Or would it require municipal government to take a different approach to problem solving.
[1] Census of India, 2011.
[2] Mission Statement and Guidelines, Smart Cities, Ministry of Urban Development, June 2015, http://smartcities.gov.in/writereaddata/SmartCityGuidelines.pdf.
[3] Report on Indian Urban Infrastructure and Services, March, 2011, The High Powered Expert Committee for estimating the investment requirements for urban infrastructure services, http://icrier.org/pdf/FinalReport-hpec.pdf.
[4] “30 more smart cities announced; takes the total to 90 so far”, Press Information Bureau, Ministry of Urban Development, June 23, 2017.
[5] Smart Cities Mission, Ministry of Urban Development, last accessed on June 30, 2017, http://smartcities.gov.in/content/.
[6] Smart City Plans, Last accessed in June 2017.
[7] “Financing of Smart Cities”, Smart Cities Mission, Ministry of Urban Development, http://smartcities.gov.in/upload/uploadfiles/files/Financing%20of%20Smart%20Cities.pdf.
[8] “Report on Indian Urban Infrastructure and Services”, March, 2011, The High Powered Expert Committee for estimating the investment requirements for urban infrastructure services, http://icrier.org/pdf/FinalReport-hpec.pdf.
[9] Fourteenth Finance Commission, Ministry of Finance, February 2015, http://finmin.nic.in/14fincomm/14fcrengVol1.pdf.
[10] Value Capture Finance Policy Framework, Ministry of Urban Development, February 2017, http://smartcities.gov.in/upload/5901982d9e461VCFPolicyFrameworkFINAL.pdf.
[11] Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015, Securities and Exchange Board of India, July 15, 2015, http://www.sebi.gov.in/sebi_data/attachdocs/1436964571729.pdf.
[12] “Credit rating of cities under urban reforms begins”, Press Information Bureau, Ministry of Urban Development, September 6, 2016.
[13] “Credit Rating of Urban Local Bodies gain Momentum”, Press Information Bureau, Ministry of Urban Development, March 26, 2017.
[14] “Pune civic body raises Rs200 crore via municipal bonds”, LiveMint, June 19, 2017, http://www.livemint.com/Money/JOOzaSTKnC6k1EZGeFh8LJ/Pune-civic-body-raises-Rs200-crore-via-municipal-bonds.html.