[Reader-list] interview of sheila dikshit in McKinsey Quuarterly

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>From the Mckinsey Quarterly:

Interview
						

						
						
						
						
						Creating a  modern Indian city:  An interview with Delhi’s chief minister
						
						
						
						Sheila Dikshit discusses the challenge of urban development in India.

						
						
						Shirish Sankhe

						
						Web exclusive, October 2007

						
						
						    

Delhi is a rarity on the Indian landscape: a
symbol of urban progress rather than urban decay. And for almost a
decade, Sheila Dikshit has presided over the nation’s capital as its
chief minister.


Dikshit, nearing the end of an unprecedented second term, has helped
guide an array of economic and political changes. Under her watch, the
first phase of the Delhi Metro was completed on budget and on time—a
feat heralded as belying the stereotype of the Indian government’s
inefficiency. The second phase is on track to be completed in time for
the Commonwealth Games, scheduled to take place in the city in 2010.


Also during her tenure, power distribution has been privatized,
pollution reduced, and green areas throughout the city increased.
Students at government schools are performing better. In addition,
Dikshit has attempted to lessen the tensions between the bureaucracy
and citizens through an initiative that brings both sides together for
regular discussions. Bhagidari, as it is called, has been held up as an
international model of good governance.


Yet Dikshit would be among the first to acknowledge that progress has
not come fast enough or without snags. Delhi is straining under the
weight of a vast and growing population. More than 13 million1
people live there, and half a million more move in every year. Decision
making can be excruciatingly slow, especially since her administration
shares authority in the city with elected municipal leaders and a
lieutenant governor appointed by India’s president.


Recently, Shirish Sankhe, a director in McKinsey’s Delhi office, met
with Dikshit in her residence and discussed the challenges of urban
development in India, as well as some of her successes.


The Quarterly: Have India’s recent economic gains surprised you?


Sheila Dikshit: I think we stopped being
surprised a while back. There is a lot of confidence throughout India
regarding Prime Minister Manmohan Singh’s economic capabilities, his
understanding of the Indian economy, and how you integrate the Indian
economy into the world economy. It also helps that the government is
growth oriented and is moving toward a more open economy. Many current
policy makers understand economics and have tried to take the economy
out of the shackles where everything had to be cleared by the
government before anything could take place.


People are feeling very comfortable with the growth. It’s amazing how
the buoyancy comes in. You see it in art, you see it in culture, in our
theater, in our films. And among the youth there is the recognition: I
am proud of my country. They no longer feel they have to go abroad for
better opportunities. They’re getting very good salaries here.






SHIELA DIKSHIT




Vital statistics

Born March 31, 1938, in Kapurthala, Punjab


Wife of the late Mr. Vinod Dikshit, a widely respected member of Indian Administrative Service, she has two children




Education

Received her MA in history from Miranda House, University of Delhi, after schooling at Convent of Jesus and Mary


Career highlights

Government of National Capital Territory of Delhi

Chief minister (1998–present)


Government of India

Union minister of state for parliamentary affairs (1986–89)Minister of state in prime minister’s office (1986–89)Member of Lower House of Parliament, representing Kannauj (1984–89)


Fast facts

Serves as secretary of Indira Gandhi Memorial Trust, which awards Indira Gandhi Prize for efforts in international peace


Launched Stree Shakti in Delhi, a program which aims to empower women
by providing employment training, financial aid, and access to health
care and medicine


Represented India on UN Commission on Status of Women (1984–89)







 




The Quarterly: What can slow down India’s growth? 


Sheila Dikshit: We have people with
outstanding and very innovative minds. This country is not short of
wealth. This country is not short of skills. This country is not short
of brains. What we lack, and I think what we always have lacked in this
country, is effective management in the government.


I can give you a very interesting example. Government schools in Delhi
were performing very badly. The pass percentage on standardized tests
was 35 to 37 percent. We looked into it and found that the government
spent 900 rupees per child per month, while nongovernment schools,
which were performing better, were spending a maximum of 700 to 800
rupees per child. We brought the teachers together and asked,
“Obviously, you are the best paid, so why are you not delivering? What
do we need to do to motivate you?” And when the teachers got motivated,
children performed better. Today the pass percentage has risen to 82
percent, half a percentage point more than nongovernment schools.


I can give you another example concerning the problem of exporting.
There were 17 different forms that had to be filled out to export
something. So we had a talk with the relevant authorities and said,
“Please, let’s reduce this.” Other countries have 2 or 3 forms, and
it’s done with. So they set up this committee, and when they came back
with a solution, instead of 17 forms, 25 forms had to be filled out. So
you see it’s the mind-set, especially in administration, that needs to
be changed. We are addressing it, but I don’t think we are addressing
it seriously enough.


There is also a feeling of mistrust between government and
nongovernment sectors. The bureaucrat always presumes that the person
coming to him for help must be a crook, that he wants me to do
something against the rules. But that poor person doesn’t know the
rules. That fellow sitting across the table has come in for help or
information, and he’s just wished away or told 100 reasons why he
cannot be given what he wants.


The Right to Information Act2
is helping by making things more transparent. When we started it in
Delhi, we found a lot of skepticism about it. But now the people are
starting to get used to that power. Also, I started an unusual program
in Delhi called Bhagidari, which focuses on governance through
partnership and received a best-practice award from the United Nations.
Citizens’ groups and the government interact with each other every week
or every month in little groups. We train the citizens in what
governance is about, since not all of them understand governing
institutions. And the bureaucrats come to understand citizens better,
that a citizen comes to you only because he is in some distress or
needs something. This coming together has helped us a lot.


The Quarterly: Is social disparity becoming a bigger problem?


Sheila Dikshit: Yes, social disparity is
there, perhaps not as much in the cities, which attract migration, as
in the divide felt between the agrarian areas and the cities. Growth
seems to have ignited in services and industry, but in the beginning
that growth was not paying much attention to agriculture. That
aberration has now been corrected, and it will come naturally.


I was in Himachal3 just about four weeks ago. One panchayat,4
which is the lowest level of government, told me that several years ago
they were poverty stricken. They couldn’t get even two square meals a
day. In the past three years they made nine crores5 exporting flowers. So they’re beginning to learn. Where the income of 60 to 80 families was virtually zero it came up to nine crores. They’ve tasted it. And there’s going to be no stopping them from becoming role models for the rest of the panchayat—year round.


The Quarterly: How has Delhi changed during your two terms in office?


Sheila Dikshit: If you look at the physical
achievements, the infrastructure is much better, the power is much
better, water is much better, and transport is better because of the
Metro, although not terribly so. I would say it needs another two to
three years to put it right. When I look at human development, I think
Delhi has changed from a cynical city to a city of hope. And it
attracts not just people who seek jobs but also culture now. Almost the
entire television industry, for instance, is located in Delhi, whereas
Bombay6 used to be the top city.


That infrastructure—the dozens and dozens and dozens of flyovers that
have come up, the underpasses that have come up—has attracted a lot of
labor from outside. Meanwhile, those who were living here were not
terribly interested in doing manual labor. So the labor came in, and
those who are local have become better educated and are looking for
jobs in the service sector. A bit more economic growth has meant more
migration, and more migration has meant that we almost keep standing
where we are.


The Quarterly: Has infrastructure been able to keep pace with growth in the city?


Sheila Dikshit: It is keeping pace now, but
we should be ahead. The fact that we have been able to cater to the
half million people coming into the city each year in everything except
housing is the good point. The bad point is that it’s slow. For me,
it’s not fast enough. With the technologies we have today, we should be
able to build infrastructure much faster.


Archaic systems and a great multiplicity of authorities in Delhi are
slowing us down. You have the federal government. You have my
government. You have the municipality. We are a state government
without, for instance, the power of owning land. It’s a great problem.
We have a lieutenant governor here representing the government of
India, which no other state has. We work with our hands tied. It’s very
unique.


The Quarterly: Yet Delhi was able to complete the first phase of its subway on time and on budget. How do you explain that?


Sheila Dikshit: First, there’s Sreedharan.7
He’s a good manager, a good conceptualizer, and a good implementer. You
can have and you will probably have lots and lots of Sreedharans in
India, but they are unable to get the kind of freedom he was given to
operate.


We gave him that space. For example, nothing that concerned the Metro
was negotiable in a court of law, so it could not get stuck. Take land,
for instance. Subways need land for stations, and you have to shift a
lot of buildings, a lot of shops, and a lot of people. And when the
Metro said, “We need land,” and we said, “All right, this land you will
get.” And whatever else was reasonably asked for by them—for instance,
not to pay excise, not to pay VAT,8
et cetera—we gave them that because it was important to complete this
project. Also, to this day we have not taken a single person to the
Metro and said, “Please employ him.” There was no pressure at all, and
they were totally on their own.


Now I can say to my other departments, if Mr. Sreedharan can do it, and
if I promise I won’t interfere, you do it. It was important to make the
Metro project a role model, so that others would feel that they could
get projects done too.


The Quarterly: Housing, especially low-income housing, has been less successful. Why?


Sheila Dikshit: Part of the problem with
housing stems from the strict land laws that we have, and the very
strict, archaic usage of land. Go to any European country, and you’ll
find a road and buildings right against the pavement. We say, if you
have a plotted piece of land, set your building back 30 feet or 20 feet
or whatever. These are luxuries which we cannot afford anymore—the FSI
law, the FAR law, and all that.9 


But what we are doing now, and what I hope to be able to complete
before we go into the next election, is to bring in more housing for
the poor. This means building 200,000-plus units for the poorer people.
This could be a two-room tenement with a washroom for 2 lakh10
that would be subsidized. We will divide these tenements into
communities that have their own little shopping area, a school, and
little gardens in between. We’ll have to change some laws, and we are
working on that. But that is not stopping me at least from starting to
build the houses.


I’m also very keen on what they call holding areas, which are kind of
like dormitories, for migrant workers. The labor that comes in here
could stay in those holding areas and go back to their villages if they
want to. They do not own the place, but they do have the right to live
there for a certain rent that can get transferred from mother to child
and child to child. Unfortunately, the Indian political mind-set is
still not able to accept this. It’s still not sinking in, but I want it
to sink in and will keep on singing until my voice is heard.


The Quarterly: How did public transportation in Delhi move to compressed natural gas (CNG) as an alternative-fuel source?


Sheila Dikshit: In 2001 we were facing a
very peculiar situation where the courts said to start using CNG, but
there was no CNG available and no vehicles were prepared to use CNG. We
spoke to all the bus producers in Delhi, all the scooter producers, car
producers. All public transport would be on CNG. So the changes that
had to be made in the vehicles’ mechanics were made. Then they would
test it: could they go over flyovers? Would they be able to take the
extreme weather we have—too much rain, too little rain, too hot, too
cold, all that?


We also had a massive publicity campaign. I personally went to each and
every person I could reach out to, as many as I could, to tell them it
was good for the common health. We also gave them an economic packet
because a CNG bus costs more than a normal bus, even though the
recurring expenses are less. Then for about eight months we had queues
as long as five kilometers of people waiting for a cylinder of CNG. But
there were no riots, and the people were patient. I am eternally
grateful to the people of Delhi for having understood, and now they are
reaping the benefits.


But it wasn’t just the courts. I am a citizen before I am chief
minister, and I’m going to remain a citizen. I grew up here, and I’ve
seen this city suffer on account of a poor environmental record. In the
past five years we’ve increased the green cover from 36 square
kilometers to 350 square kilometers. Now we are growing 19 city forests
of 10,000 to 20,000 trees. We also passed a law that says if you cut 1
tree, for whatever purpose, you plant 10 others somewhere else. It
doesn’t matter where you do it, but you do it.


The Quarterly: Is funding a critical constraint? 


Sheila Dikshit: No, funding is not a
constraint. We have very good tax collection and have urged the people
not to avoid taxes. We gave concessions where we thought we should, but
we were also one of the first states to impose the VAT. Since things
are happening here, the central government has been very kind to give
us funds. So we are never short of funds.


The Quarterly: How can other Indian cities follow Delhi’s example?


Sheila Dikshit: They should be made into city-states,11
and we should start with five cities: Kolkata, Mumbai, Chennai, and so
on. I am sure politically no one would agree with this, but I think
administratively it would be good for the country’s development. Create
city-states and give them the power to undertake development. They
should not be under the state governments but rather under their own
chief minister or chief administrator or whatever you want to call the
position. They would collect their own revenues, maybe sharing a
percentage with the other states. You have to develop your cities,
especially if you’re envisaging that in the next 20 years 55 to 60
percent of India’s population will be urban. You just can’t do it with
the same old administration where you’re dependent on various
constituents for every penny.


The Quarterly: Do you think Delhi can become a world-class city or, for instance, play host to the Olympics?


Sheila Dikshit: That’s my dream. But one of
the real problems we have is the density of the population. It’s one of
the highest in the world. And there is a paucity of land. Every other
city the size that we are has a hinterland to spread into. We don’t. We
can only go higher. And that is not always easy, because we want to see
the blue sky. But I am confident in the next eight or ten years that if
we change people’s attitudes—make everybody proud of the fact it’s our
city and we have to keep it clean and make it pollution free—we will do
it.


It will still take five or six years to put the city on a course on
which it can’t go back. Today it can go back, but once it crosses the
hump it can’t slide back. That hump has yet to be reached. We’re close,
but we haven’t reached it.


As for the Olympics, let us wait for the Commonwealth Games first. Then
there would be not just the temptation to bid for the Olympics from our
side but also a feeling in the world that Delhi could do it, that India
could do it, and therefore deserves it. 



About the Author

Shirish Sankhe is a director in McKinsey’s Mumbai office.






Notes



1 Census of India 2001.



2
An act that allows citizens to secure access to information under the
control of public authorities, with the goal of promoting transparency
and accountability.



3 Himachal Pradesh is a state in northern India.



4 Village council.



5 Ninety million rupees, or about $2.2 million.



6 Mumbai.



7 E. Sreedharan, the managing director of Delhi Metro.



8 Value-added tax. 

 

9 The Floor Space Index (FSI) and Floor Area Ratio (FAR) are among regulations that restrict land use on  a given plot.



10 Two hundred thousand rupees, or about $5,000.

 

11
Delhi, as the national capital territory, is not part of a larger
state, a unique position in India. The country’s other big cities are
part of larger states that often use taxes raised in these cities for
projects outside the urban areas.







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