More municipal corporations in Himachal Pradesh is not a smart idea

Urbanisation in India differs significantly from the classical urbanisation seen in the Global North

The Himachal Pradesh government’s proposal to establish three more municipal corporations in Hamirpur, Una, and Baddi-Barotiwala may not be the best approach for managing urban governance in a small Himalayan state.

Until a decade ago, Shimla was the only municipal corporation in the state. In 2012, Sudhir Sharma, then urban development minister under the Virbhadra Singh government, laid the foundation for converting Dharamshala’s municipal council into a municipal corporation, primarily to secure a ‘smart city’ designation after the Narendra Modi government launched the Smart Cities Mission in 2015.

However, this move was controversial, as neighbouring villages were forced to merge into Dharamshala’s municipal limits, causing discontent among residents. Sharma ultimately lost the subsequent election, and his decision was challenged in the high court, which later awarded Shimla a ‘smart city’ status as well. Since then, additional municipal councils — such as Solan, Mandi, and Palampur — have been converted into corporations.

Is this approach truly beneficial for urban governance and planned urbanisation? Let’s examine this trend and its implications.

Why is there a push for such transformation?

Urbanisation in India, including in Himachal Pradesh, differs significantly from the classical urbanisation seen in the Global North. In the West, urbanisation followed industrialisation, which absorbed surplus labour from rural areas into expanding cities, bolstered by economic transfers from colonies. Economist Utsa Patnaik has highlighted that India alone contributed over $45 trillion to England’s economy during colonial rule.

In contrast, India’s urbanisation is driven primarily by economic distress, with migration from rural to urban, and also from urban to urban areas resulting in ‘poverty-driven urbanisation’. This process often overwhelms planning institutions, as demonstrated by the reverse migration trends seen during the Covid-19 pandemic. The plan fails both spatially and temporally.

Similarly, Himachal Pradesh’s urbanisation is influenced by administrative, political, and educational factors, along with migration from rural areas. Additionally, another major driver for urban growth in the state is education, and the sheer number of young people entering the urban ecosystem for higher education is amazing. Some settlements, while still classified as rural, exhibit urban characteristics — a phenomenon that could be documented through a thorough ‘Settlement Commission’ study, should the government choose to initiate one.

This context sheds light on why converting municipal councils into corporations might not be the best solution. The primary drivers behind this transformation include:

State Financial Pressures: Himachal Pradesh faces a severe fiscal crisis, with a debt exceeding Rs 90,000 crore, which is roughly 42.5% of the GSDP. The government views the expansion of municipal boundaries as an opportunity to increase tax revenues, especially property taxes, by incorporating more villages.

For the state government, the primary motivation is not improved governance but rather increased fiscal mobilisation. Another significant driver is the desire to bring more land under planning and real estate development, which could generate additional revenue through forced urbanisation.

Public Opinion: Public sentiment about merging areas into corporations is mixed. Many residents within existing municipal boundaries are dissatisfied with poor utility services, particularly in waste management. This includes, both solid and liquid waste. The towns are turning into trash bins, where heaps of waste can be seen all around. Likewise, the untreated liquid waste is resulting in these towns badly stinking. None of the proposed towns have successful models for solid or liquid waste treatment, and they hope that gaining municipal corporation status will attract additional funding to address these issues.

Conversely, many agricultural residents believe that the process is simply a land-control exercise that offers little benefit to local governance. The already existing robust local body governance in the villages gets taken over by very heterogenous groups where the local population have little say.

The experience so far

Apart from Shimla, which also suffers from limited capacity, the newly established municipal corporations (Solan, Palampur, and Mandi) lack the staff and resources necessary to handle civic issues effectively. For instance, the highly publicised but expensive ‘underground dustbin’ scheme introduced by Sharma, the urban development minister in his constituency, in Dharamshala was recently scrapped, and there has been no investigation into its failure. These newer municipal corporations rely heavily on district administration officials, as they lack dedicated municipal personnel.

Urban governance reforms began with the 74th Constitutional Amendment, which assigned 18 subjects (including urban planning) to local bodies under the 12th Schedule. Yet, in Himachal Pradesh, only three subjects have been transferred to municipal corporations, and even fewer to municipal councils. Consequently, cities continue to be run by parastatal organisations, with local MLAs or ministers often serving as ‘de facto mayors’: Dhani Ram Shandil (minister taking calls for Solan), Ashish Butail (for Palampur), and likewise, previously Sudhir for Dharamshala.

These towns are not seen as independent governance structures, rather as adjuncts of the state or the political power in the city. Converting municipal councils into corporations without transferring the necessary functions, staff, and finances undermines the intended benefits of these changes, leaving them as mere fiscal instruments.

Empower town governments

Simply converting municipal councils into corporations without adequately empowering them will not address the urbanisation challenges in Himachal Pradesh. Instead, it risks exacerbating existing issues. True decentralisation, coupled with improved governance capacity, is essential to tackle the pressing issues facing Himachal’s urban areas.

(Tikender Singh Panwar is former deputy mayor, Shimla, and member, Kerala Urban Commission.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.