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23 January 2023 – The Hindu

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India’s Urbanisation Policies

Context:

  • A World Bank research on financing India’s urban infrastructure needs from November 2022 emphasises the value of private investments in tackling urban concerns. For India’s urban policy paradigm, the drive to draw private investment has been problematic since the 1990s. Urban improvements during the United Progressive Alliance I government, the Smart City goal, and now this study came after this work.

 Funding for cities:

  • Has the process of reforming been successful in enticing private investment to urban infrastructure? After three decades of reforms, the government currently provides the majority of urban funding. 48 percent, 24 percent, and 15 percent, respectively, of the money required to finance urban capital expenditures are provided by the federal, state, and local governments. Public-private partnerships and commercial loans each provide 3% of the funding for a project.
  • In recent years, it has been estimated that funding for urban infrastructure will require a substantial sum of money; the Isher Judge Ahluwalia report estimated that by 2030, this value will be close to 39.2 lakh crore. According to a McKinsey analysis, the price of urbanisation is $1.2 trillion, or 90 lakh crore.

 The forecasts from the World Bank:

  • According to the World Bank, urban India will require investments of $840 billion (almost 70 lakh crore), of which $55 billion will be required yearly to meet the rising demands of the population.
  • The Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the Pradhan Mantri Awas Yojana (PMAY), and other government flagship programmes have a combined budget of no more than 2 lakh crore (that too for a period of five years).

How, then, will a supply-demand gap be filled?

  • Building up the financial foundation and creditworthiness of Indian cities is one of the report’s primary topics and recommendations. Cities must establish a strong financial base and be able to pay for the services they provide. In plainer terms, it involves raising service charges, user fees, and property taxes, to mention a few.
  • 85% of government revenue comes from local governments, as our analysis has already shown. This implies that urban residents are making sizable financial contributions despite the World Bank report’s focus on rising costs such user fees for energy and other services. Will expanding the tax base be enough to meet the cities’ increasing need for urban infrastructure?
  • The answer is that it won’t.

 The Shimla case study:

  • In 2016–17, the Shimla Water Works were taken over by the Greater Shimla Water Supply and Sewage Circle, a solitary service run by the Shimla Municipal Corporation. (GSWSSC). The Shimla Municipal Corporation was in charge of running the utility, but the Bank provided assistance in the form of a soft loan to make sure there was enough water and that it was distributed properly.
  • On the other hand, it established the Shimla Jal Prabandhan Nigam Limited in 2017–18, which is currently governed by a board of directors but operates outside the jurisdiction of the municipality, and transformed GSWSSC into a business. Such tricks are useless and put India’s primary goal of urbanisation in jeopardy.

 Identifying detours:

  • The fundamental issue with this report, as well as papers of a similar nature from the past, is that they were developed via a top-down process and overemphasise technologically centred solutions that require extremely costly and capital-intensive equipment.
  • The population must be engaged with in order to determine their requirements before creating any plans for the urban environment.
  • Giving local governments and the broader public more power is the second objective. The national task force headed by K.C. Sivaramakrishnan that looked at the 74th Constitutional Amendment made a number of recommendations, including the following:
  • Enhancing the people’s power
  • Ceding some areas to local government control.
  • It is suggested that cities receive 10% of the income tax revenue.
  • Ensuring that the corpus fund was only applied to building infrastructure. If this were done, city governments would be in a stronger position to ensure quick change.
  • Urban governance is another crucial component of urban infrastructure, but it is in disarray across the majority of the nation. To give cities additional authority and allow for regular elections, the three Fs—finances, functions, and functionaries—need to be transferred.
  • Local governments have relatively little control over how well these parastatals run cities, which are frequently managed by them.

Mission for a Smart City (SCM):

  • The Indian government’s ground-breaking Smart Cities Mission was introduced in 2015 with the goal of fostering regional development and improving people’s quality of life by utilising technology to provide citizens with smart outcomes.
  • A “smart city” is one that has the fundamental infrastructure necessary to provide a decent level of living and a safe, sustainable environment.
  • The fundamental infrastructure is covered, including reliable access to water and energy, solid waste management that respects the environment, effective urban transportation, moderately affordable housing, and strong IT connectivity.
  • The most urgent requirements and potential to improve quality of life are at the centre of smart cities. In order to alter things, they use a variety of strategies, including public-private partnerships, best practises in urban planning, digital and information technologies, and policy change. They consistently give people priority.

 About AMRUT:

  • In 500 carefully chosen cities and towns spread across all States and Union Territories, the government started implementing AMRUT in 2015. (UTs). Building infrastructure for water supply, sewage management, storm water drainage, non-motorized urban transit, and green areas and parks is the main goal of AMRUT. The Mission also includes reforms and capacity building.

Conclusion:

  • The World Bank report serves as yet another reminder of the tragic urbanisation of India, which has been labelled as “policy paralysis from the top.” We need to allocate adequate funds in order to revitalise our metropolitan environment.

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