Urban governance, the Lee Kuan Yew way

Lee Kuan Yew remains one of Asia’s most consequential statesmen. Among his many views on governance, one stands out for India and deserves attention on his 11th death anniversary.

In 2008, when the then deputy chief minister of Maharashtra, R R Patil, asked how Mumbai could be turned into Singapore, the former prime minister of Singapore gave a blunt answer. Mumbai could not achieve that unless it was separated from Maharashtra and governed as a distinct unit. The problem, he noted, was simple. Maharashtra depended too much on Mumbai’s revenue.

This raises two questions. Do state governments favour their highest-growth cities? And does that preference limit those same cities? The answer to both is yes.

Across India, development tends to cluster around cities that are already doing well. Karnataka is a recent example. Despite efforts to push investment into Kittur and Kalyana regions, more than half of the projects cleared in the recent years were concentrated in just four districts: Bengaluru Urban, Bengaluru Rural, Kolar and Tumakuru. Thus, even when a state claims to be broad-basing development, capital and administrative attention continue to cluster around the dominant metropolitan region.

The effects are visible. Regions that are left behind begin to demand separate statehood. Be it Vidarbha in Maharashtra, North Karnataka in Karnataka, Kongu Nadu in Tamil Nadu or Barak Pradesh in Assam. They all point to uneven development within states, for discontent follows, when growth is concentrated in one place.

There is also a broader pattern behind this. Society in India often follows a “top-performer” approach. As a result, more support goes to places that are already succeeding, and less attention is given to weaker regions. But this approach does not work well. The Nobel Prize-winning work of Abhijit Banerjee, Esther Duflo and Michael Kremer shows that targeted support for weaker groups produces better results than focusing on top performers alone.

By that logic, states gain more by strengthening Tier 2 cities than by repeatedly investing in one dominant city. This also spreads risk. A state with multiple growth centres is more stable than one that depends on a single city. In Tamil Nadu, for example, growth is spread across Chennai, Coimbatore, Madurai, Tiruchirappalli and Hosur.

But the problem does not stop there. When a state depends heavily on a single urban centre, that city starts being treated as a fiscal asset instead of a place that needs its own governance. Cities like Mumbai have complex needs. Issues such as transport and housing require focused and flexible administration.

A study by Harvard University on regional economic inequality in the United Kingdom shows that when growth is concentrated in one dominant region, underperforming cities elsewhere drag down overall productivity, while the leading city itself faces mounting structural pressures.

It is in this context that Lee Kuan Yew’s suggestion gains relevance. If a city such as Mumbai is expected to function as a global financial and commercial hub, it may require a governance framework different from that of an ordinary city. Granting select high-growth cities greater autonomy, potentially as Union Territories with legislative assemblies, could allow them to govern in alignment with their economic complexity. India already has a constitutional template in the model of Delhi under Article 239AA.

But this also calls for caution. Should every high-growth city that crosses a certain threshold be carved out as a union territory? And if so, what would that threshold even be? Population or revenue alone is not enough. Administrative capacity, regional linkages and the fiscal impact on the parent state matter too. 

This model also reveals the limits of autonomy, as the Supreme Court has categorically held in State (NCT of Delhi) vs Union of India that subjects such as public order, police and land remain under Union control, which continues to remain a point of contention between elected governments of UTs and the Centre. Any move in this direction would therefore have to be designed by balancing local self-government and national oversight. 

There is also the question of revenue. States rely heavily on their largest cities. Removing that source creates real concerns. Transitional revenue-sharing arrangements between the Union and concerned states can ease the shift.

If India wants globally competitive cities without deepening regional resentment, it must do two things at once: strengthen weaker cities and rethink whether a very small number of exceptionally complex urban agglomerations require a distinct constitutional status. 

(The writer is research fellow, Vidhi Centre for Legal Policy, Karnataka)