Chinese cities streets ahead of ours

Many scholars and academics say that India and China are two large economies of the world which are comparable in many ways ��� both are countries with a billion-plus population and large land area. In addition, the shares of GDP by sector are also similar, with agriculture contributing to 23% of GDP in the case of India, slightly less in China at 15%. While manufacturing contributes a greater proportion of China���s GDP (52%), services contribute a much higher proportion of India���s GDP (at 53%). So there are many similarities and symmetries between the two large economies. However, the comparison ends there.

This writer recently visited China, primarily three cities located in the eastern part of that country ��� Beijing, the political capital, Shanghai, the financial capital and Jinan, a city of about seven million population, which is home to Shandong University. Cities are quite important in China as they contribute to nearly 70% of the country���s GDP, quite similar to our cities which contribute nearly half of our GDP. Hence it must be the case that a large part of China���s economic growth is attributable to the cities. Several features of China���s urban development and their differences with Indian urban development are worth noting.

The urban density in terms of persons per hectare is much lower, being only 146 persons per hectare in Chinese cities (Beijing, Shanghai, Tianjin, Guangzhou, Hangzhou, and Ningbo) compared with nearly 204 persons per hectare in Indian cities such as Mumbai and Chennai. It is possible that this is directly an outcome of the household registration system in China ��� the hukou system which restricts rural-urban migration by limiting the benefits of migrants into cities.

The total length of China���s expressways, much the same as in the United States and Europe, was 60,300 km at the end of 2008, whereas the nearly 5,161 towns in India had a total of 224,352 km of both kaccha (27%) as well as pucca roads (73%) according to data from the Census of India town directory 2001. The national highways in India have a total length of 66,590 km. There are no expressways in India ��� the Road Information System (nhai-ris.org) at the NHAI website unfortunately does not work. While it is useful to note that expressways greatly increase the speed of travel and cut down on travel time significantly, their near conspicuous absence in India���s cities and towns testifies to the poor quality of public services citizens receive.

The average occupancy per public transport vehicle in Chinese cities is very high at 53 persons per vehicle on average, compared with 38 in low income Asian cities such as Mumbai. This is because public transport is very affordable, provides connectivity to various parts of the city, convenient and has high frequency in Chinese cities.

For example, in Beijing, one can travel on a city bus from anywhere in the city to anywhere else for just 1 yuan. But this is not so in India���s context. For India, some research shows that the minimum cost of public transport use accounts for 20% to 30% of the family income for nearly 50% of the city population living in unauthorised settlements.

With the exception of the Mumbai local train network, Delhi metro and Bangalore Metropolitan Transport Corporation���s volvo buses (there was only an experiment in Bangalore recently to allow commuters to use these buses at Re 1 which received an unprecedented response), there are no examples of affordable public transport in Indian cities.

Prof Anthony Yeh of the University of Hong Kong at the closing session on urban development at Shanghai Forum 2009 (where this writer was present) pointed out that in China, there is inter-city competition for investment such as Shenzhen competing with Guangzhou. However, this is something that has not been happening in India yet. Indian cities, while they are entrusted with responsibilities of planning for economic development by the 74th Constitutional Amendment Act, do not have many independent sources of revenue apart from the property tax.

Nor have they been able to tap the capital market for long-term funds except a few cases such as Ahmedabad. The result is that the city governments are dependent on state governments for grants, based on recommendations made by state finance commissions, and on state and central programmes which provide earmarked funds for specific purposes.

While there are significant disparities between urban and rural areas in China, a large part of why and how China has been able to achieve its level of urban development is through its government which apparently is highly efficient (although corrupt) in providing necessary infrastructure and amenities for urban dwellers. In India, municipal governments lack any professionalism in their management of cities; practices are archaic; their finances are in poor condition, quite similar to the county and township governments in China (for instance, the per capita fiscal revenue of Yunnan province is 11 times greater than the per capita revenue of the county governments).

However, the various levels of government in China, even with their totalitarianism are quite efficient. It must be the case that the leakages in the taxes paid by residents should be minimal. The ratio of local government revenues to GDP is 6% in China, when compared with 8% for the US and 9% for Canada, but only 0.75% of GDP for India���s ULBs. Otherwise, with poor sub-national finances, Chinese cities must have been similar to India���s cities. So governance must explain the disparities between Indian and Chinese urban development.

Hence the UPA should focus on governance and better administration of the tax money that is flowing into government coffers so that they are channelled to appropriate uses. Only then can we look forward to a resurgent urban India with the requisite infrastructure such as expressways, public transport and decent dwellings which would sustain our country���s macroeconomic growth on a higher trajectory.

(The author is Senior Research Fellow, Public Affairs Centre, Bangalore. Views are personal.)