Outsourcing governance- Is the new “inn” thing? – Parastatals

In the class on democracy and ecology, I have always had an alternate possition from that of the course instructor. While he upholds the constitution ( although he is not a lawyer, but still! ) above everything, I feel there have be changes in ways of state’s doing business in the context of the larger world.  While I had my reasons to question his point of views, I did agree to his reasoning in certain matters. One of them is the case of parastatal agencies.  The funny thing is when I did agree with him this time, he was unable to see it as he is tuned to believe that I wont agree with him.

Parastatal agencies , what are they? They are agencies that “aid” state in doing its job well by doing certain specific , specialized jobs that generic state can not be expected to do. For example an ISRO (Indian Space Research Organisation)is a parastatal agency. At the same time a KUIDFC (Karnataka Urban Infrastructure Development & Finance Corporation) is also a parastatal agency. And there exist other parastatal agencies that are neither an offshoot of government bodies, nor are non-governmental organizations. They are somewhere inbetween. They ( in the name of helping the state) play the role of state and also not stay answerable to the public that has elected its local representatives – councilors/ corporators / MLAs.  There is a requirement for a parastatal agency like a ISRO to provide and implement experitse, as it is a very specialized task. Whereas requirement of a KUIDFC does exist too, but to provide expertise through advocacy but not implementation. Why this distinction?


  1. The activities that KUIDFC plans/implemented are constitutionally mandated by the Urban Local Bodies to do it by themselves , on behalf of the citizens of the urban area. 
  2. Also agencies like KUIDFC are given the trump card to override these constitutionally guaranteed powers vested with the ULBs. (See image below , snippet from KUIDFC-Municiapl corporation contract).
  3. KUIDFC then takes loans from IFIs (International Financial Institutions) on behalf of the city corporation and further imposes the rules from the IFIs on the city and in this process also changing the laws and policies of the state.


The KUIDFC atleast is a parastatal agency constituted by the state, they can be questioned at some point by the state.

There are other type of parastatal agencies that are set up by  influencial citizens “to do good” for the larger city. In the case of Bangalore one of them is Janagraha. Janagarha, one of the urban specialist NGOs is one example. Bangalore has a handful of such influenctial agencies. I have worked for one of them in the past ( I guess!). The point is all of them intend well, but why are they bestowed with powers that are mandated to the state bodies? Why are they given them without being asked to be accountable for the same?  The questions raised by the instructor were pertinent- why is  a Janagraha a signing authortity for the city plans that cities were supposed to put together under JNNURM?  And who funds these agencies? Do these organizations even know the landscape of politics and governnance? They do not engage with areas that are asthetically not apealign for them in their “citizen engagement assigment” they assign themselves. Like the BATF did not want to engage with the slum board as it ” is a political cesspool” while doing the City Development Plan for the BDA.

It definitely is not a bad idea to have parastatals help state in an advisory role, but they definitely can not be engaged to “do” things without being held accountable.

Also another intersting thing about Bangalore- there was a report commissioned under Kasturirangan on how the Bangalore metropolitan should be governend. But is not available on any goverment website but on archive.org.- https://ia801001.us.archive.org/18/items/DrKasturiranganCommitteeReportOnBBMP/Dr-Kasturirangan-Committee-Report-on-BBMP.pdf


That, that!!!!