A scale to apply eco-rating

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Urbanisation has not been an unmixed blessing; it brings in its wake many undesirable problems.
Urbanisation has not been an unmixed blessing; it brings in its wake many undesirable problems.

Just as credit rating decides interest rates, eco-rating may be used to decide how much budget support any particular town should get from the State, says P. V. INDIRESAN.

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of Science, whatever the matter may be.” These are the thoughts of Lord Kelvin.

Traditionally, the value of any project is measured by the amount of money it costs — we talk of a hundred-crore or a thousand-crore project but not what good it does. That is understandable; it is a simple matter to measure the cost; it is quite another matter to estimate how good a project is.

As the famous quotation of Lord Kelvin given above states, the problem lies in our inability to give numbers to various aspects of quality of the outcomes. In the absence of a numerical measure, the assessment becomes subjective, subject to multiple interpretations.

That is the problem with our evaluation committees: They offer only subjective assessments. Further, a post-mortem by a committee — after the project is completed — does not help implementers to make it good.

Quantitative measures

In the previous two articles, we have been considering the Finance Minister, Mr P. Chidambaram’s dream of making India 85 per cent urbanised. As sad experience has demonstrated, urbanisation has not been an unmixed blessing; it brings in its wake many undesirable problems.

Hence, it would be useful, and important, for us to know how to measure how good a new town is.

In order to initiate a debate on this topic, I suggest below a few quantitative measures. I have picked a few good practices and for each one of them I have suggested a numerical measure. Ideally, each number should be zero; the higher the number, the worse the rating.

Water Harvesting — Proportion of water imported to the amount consumed in the community.

Water Recycling — Proportion of untreated sewage let out to amount of water consumed

Waste Recycling — Proportion of material sent to landfill to amount brought from outside

Minimising Commuting — Proportion of employees commuting from outside to locally resident employees

Minimising traffic congestion — Ratio of private cars entering the business district to the number of public vehicles doing so.

Including the Poor — Proportion of dwellings without either running water or sanitation.

Safe Design — Ratio of people employed for security to those engaged for conservancy.

Please observe that, in each case, the suggested measure is a ratio, a pure number. That is the only way we can combine diverse factors, as is popularly said, combine oranges with apples.

We cannot directly combine, for instance, water quality with time wasted in commuting. However, if each factor is represented by a number, those numbers can be added in any desired proportion to get a composite measure — a measure that can be treated as the eco-rating of the town. Incidentally, each measurement I have suggested is simple, unambiguous, and hence, transparent.

Once we have a measure for the eco-rating of the town, we can use it to decide objectively how far that town should be encouraged. Just as credit rating decides interest rates, eco-rating may be used to decide how much budget support any particular town should get from the state.

In this connection, a caveat is in order: Our government has a peculiar trait; it gives most support to the least competent and least help (even most discouragement) to the most competent. It will pour money into cities that condemn more and more people to live in slums and will offer nothing to a town where the poor live in dignity.

It never occurs to our policy makers that the former need to be punished and the latter to be encouraged. What they practice is perverted socialism; it does not occur to them that the poor benefit best when the state supports good institutions and not bad ones, when it encourages well-managed towns and not bad ones.

Once town planners realise that the financial support depends on good performance, performance measured by objective standards, and only then, will they strive to make their eco-rating as high as possible.

When they know how the numbers are calculated, they will also know how to make their ratings high. There will be transparent competition; all-round improvement in quality will then evolve naturally.

Adopt two-part approach

Most urban development these days is by private developers. As businesses survive only so long as they make profits, they cannot offer the poor any dwelling (let alone dwellings of acceptable quality). That is why slums are the fastest growing segment of urban expansion and erupt outside every gated community. Urban development based on uncontrolled expansion of slums cannot be a dream; it will only be a nightmare. In this connection, let us recall that, in all our cities, builders tempt house owners to surrender their houses with an offer to repay with two-three flats out of the three-four flats they build in that space. That means the price of developed (including urban infrastructure) urban land is two-three times the cost of constructing a residence.

Till a few decades ago, the state met the entire cost of infrastructure out of its revenues and house owners met only the cost of brick and mortar that went into their buildings. In the latest fancy gated colonies, the owners have to bear the cost of both that of constructing the buildings and of the infrastructure that goes with them.

As a result, the cost of dwellings is now three-four times what they would have been if the state had done its duty. That is why not only the poor but the lower middle class also has been thrust into slums, why even senior government officials cannot afford decent accommodation.

For a solution to this problem, I suggest that the government adopt a two-part approach: One, it passes through the low interest loans (half per cent a year or less for 20-30 years) it can get from international banks to real-estate developers but only to meet infrastructure costs and not the construction costs of buildings. Two, as a quid pro quo, it offers this facility only when the developer accepts the 80-20 principle — half the space for the top 20 per cent and the other half reserved for the bottom 80 per cent as an entitlement.

As matters stand, in our new towns, the entire space goes to the rich and none for the poor. Just imagine how our gated towns will be transformed if half their space have 80 per cent dwellings — dwellings that have to be small and hence attractive only to the less fortunate. The poor may have small dwellings but will have the benefit of sharing the infrastructure with the rich. Such inclusive habitations will be so safe that they will need no elaborate security.

Here is a plan that is simple to implement, one that helps the poor to live in dignity and the rich to live without fear. It will cost the government nothing extra.


(Response may be sent to: is 229th in the Vision 2020 series. The previous article appeared on June 23.)

Related Stories:
‘Eco-rating’ as a social leveller
Urban planning needs long-term vision
Development blues in Urban India

(This article was published in the Business Line print edition dated July 7, 2008)
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