Session 2: Innovations in Government: Experiences of Other States

Chair: Sandip Poundrik, Secretary, Urban Development Department, Government of Bihar

This session included two presentations: the first addressed solid waste management, the second addressed Indian states’ management of debt. Though covering very different challenges, the two issues drew out a conversation about India’s federal system and the practical work of governing within it.

Presenting ‘Challenges in Solid Waste Management,’ Dr. G.P. Mohapatra (Municipal Commissioner, Ahmedabad) discussed the city of Ahmedabad’s strategies for improving its treatment of solid waste.

He identified four major hurdles ‘typical of all Indian cities’:

– Non-segregation of waste at the source

– A low recycling percentage

– Current composting/RDF plants produce rejects >20% for landfill site

– Shortage of land for landfills/not-in-my-backyard problems

Mohapatra stressed the need for funding and better technologies for addressing solid waste problems, while discussion also highlighted the need to create the right incentives for improvement and the right ‘civic culture’. Though there are nationally-issued rules for solid waste disposal, ‘not a single city in India follows even 25% of these rules,’ Mohapatra said, given the small fees collected and the higher costs involved. However, he viewed the relative independence allowed to municipalities as an opportunity for government innovation to address an issue of the highest priority.

The second presentation, from Abhirup Sarkar (Indian Statistical Institute, Kolkata) addressed the ‘Relative state of public finance in Bihar and West Bengal.’ In the 1995-6 and 1999-2000 period, Bihar was among the most indebted states, and West Bengal held an average level of debt, Sarkar said. By the end of March 2013, however, their positions were reversed: Bihar had about an average level of debt, while West Bengal’s indebtedness had increased.

Sarkar emphasized the importance of understanding the performance of these two states, the role of the Federal Responsibility and Budget Management Act, and the degrees of deconcentration which could be appropriate in the Indian federal system. Transfer payments from the Central government are much higher in Bihar than in West Bengal, due to Bihar’s low development indicators. Sarkar identified this as a new and ‘different phenomenon’ in which ‘development became much more centralized’ and spending was administered through centrally-run programmes.

Discussant Rathin Roy (Director, NIPFP– National Institute for Public Finance and Policy) argued more simply that Bihar’s high level of debt in the 1990s meant that the state could not borrow at reasonable rates. It then stopped borrowing, but also ‘stopped functioning,’ said Roy. Increasing transfers to states might affect fiscal federalism, said Roy, but would not necessarily do so.

By Mari Oye, Country Economist, IGC Myanmar