Introduction

• About 377 million Indians comprising of about 31% of the country’s population, live in urban areas according to Census 2011.
• This is a smaller proportion compared to other large developing countries, for example, 45% in China, 54% in Indonesia, 78% in Mexico and 87% in Brazil.
• With the more rapid growth of the Indian economy in recent years, which is expected to continue, the rate of urbanisation will increase.
• Projections are that by 2031, about 600 million Indians will reside in urban areas, an increase of over 200 million in just 20 years. Urban areas are engines of economic growth.

Role of Urban Development

• Urbanisation will be central to India’s strategy of achieving faster and more inclusive growth because agglomeration and densification of economic activities (and habitations) in urban conglomerations stimulates economic efficiencies and provides more opportunities for earning livelihoods. Thus, urbanisation increases avenues for entrepreneurship and employment compared to what is possible in dispersed rural areas. It, thereby, enables faster inclusion of more people in the process of economic growth.

Challenges in Urbanization

As stated above, the expansion of urban India is the platform for industrial and modern service sector growth and the creation of greatly improved income opportunities for the youth of this country. In order to realize the opportunities that urbanization offers and to successfully resolve its accompanying challenges, a combination of several initiatives is needed.

• 1st is to step up investment in new urban infrastructure assets and maintenance of assets. It is estimated that a total of about Rs. 40 lakh crore (2009-10 prices) as capital expenditure and another about Rs. 20 lakh crore for Operation and Maintenance (O&M) expenditure for the new and old assets will be required over the next 20 years.
• Second, is to strengthen urban governance. A unified and effective administrative framework is necessary in urban areas with clear accountability to citizens. The elective office of mayor supported by the necessary administrative powers and machinery can provide the required framework. This may require significant changes in administrative rules to delineate clear areas of accountability for elected representatives with reasonable tenures in office.
• Third, is to strengthen the ‘soft infrastructure’ simultaneously with the building of the hard infrastructure. Therefore, along with the strengthening of governance structures, the enormous weakness in the capacity of human and organisational resources to deal with the challenges posed by the sector must be addressed. Efforts must be made to redress this situation in collaboration with State Governments, Urban Local Bodies (ULBs) as well as private sector.
• Fourth, is to give adequate emphasis to long term strategic urban planning to ensure that India’s urban management agenda is not limited to ‘renewal’ of cities. It must also anticipate and plan for emergence and growth of new cities along with expansion of economic activities. The urban planning exercise, therefore, has to be situated not only in the specific context of municipal limits but also encompass the overall regional planning perspective.
• Fifth, is to address the basic needs of the urban poor who are largely employed in the informal sector and suffer from multiple deprivations and vulnerabilities that include lack of access to basic amenities such as water supply, sanitation, health care, education, social security and decent housing. They are also not sufficiently represented in the urban governance process.
• Sixth, is to ensure the environmental sustainability of urban development. As this is a complex process, which requires co-ordinated action on different facets of urban development; the strategy would require creation of an institutional mechanism for convergent decision-making so that, cities become environmentally sustainable. Such an approach would be in line with the objectives of the National Mission on Sustainable Habitats which seeks to make cities sustainable through improvements in energy efficient buildings, management of solid waste and a shift to public transport.
• According to the World Bank, the challenges have arisen from the following governance deficits:

a) Empowerment deficit: Limited, overlapping and fragmented functional assignments resulting in unclear accountability at the city level.
b) Resource deficit: Limited revenue-generation powers and inappropriately targeted inter-governmental transfers resulting in inadequate local government financial resources.
c) Accountability deficit: Despite elections and the right to information, transparency structures, roles and mandates are unclear.
d) Delivery deficit: Insufficient provision and maintenance of municipal services and networks.

New Indian Urban Development Projects

A. Smart Cities Programme

The Smart Cities programme aims to revolutionize India’s urban landscape.

The objective is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions.

The focus is on sustainable and inclusive development and the idea is to look at compact areas, create a replicable model which will act like a light house to other aspiring cities.

The Smart Cities Mission of the Government is a bold, new initiative. It is meant to set examples that can be replicated both within and outside the Smart City, catalysing the creation of similar Smart Cities in various regions and parts of the country.

The core infrastructure elements in a Smart City would include:

i. Adequate water supply,
ii. Assured electricity supply,
iii. Sanitation, including solid waste management,
iv. Efficient urban mobility and public transport,
v. Affordable housing, especially for the poor,
vi. Robust IT connectivity and digitalization,
vii. Good governance, especially e-Governance and citizen participation,
viii. Sustainable environment,
ix. Safety and security of citizens, particularly women, children and the elderly,
x. Health and education.

Accordingly, the purpose of the Smart Cities Mission is to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes. Area-based development will transform existing areas (retrofit and redevelop), including slums, into better planned ones, thereby improving liveability of the whole City. New areas (greenfield) will be developed around citiesin order to accommodate the expanding population in urban areas.

Application of Smart Solutions will enable cities to use technology, information and data to improve infrastructure and services. Comprehensive develop-ment in this way will improve quality of life, create employment and enhance incomes for all, especially the poor and the disadvantaged, leading to inclusive Cities.

The GOI funds and the matching contribution by the States/ULB will meet only a part of the project cost. Balance funds are expected to be mobilized from:

i. States/ ULBs own resources from collection of user fees, beneficiary charges and impact fees, land monetization, debt, loans, etc.
ii. Additional resources transferred due to acceptance of the recommendations of the 14th Finance Commission (FFC).
iii. Innovative finance mechanisms such as municipal bonds with credit rating of ULBs, Pooled Finance Mechanism, Tax Increment Financing (TIF).
iv. Other Central Government schemes like Swachh Bharat Mission, AMRUT, National Heritage City Development and Augmentation Yojana (HRIDAY).
v. Leverage borrowings from financial institutions, including bilateral and multilateral institutions, both domestic and external sources.
vi. States/UTs may also access the National Investment and Infrastructure Fund (NIIF), which was announced by the Finance Minister in his 2015 Budget Speech, and is likely to be set up this year.
vii. Private Sector through PPPs.

B. Country-Specific Tie-ups

The new administration has entered into various country specific agreements since taking office in May 2014. A memorandum of understanding has been signed between India and Japan to turn Varanasi into a smart city with help from the city of Kyoto. The United States has expressed interest in developing three smart cities (Allahabad, Ajmer and Vishakhapatnam). India and China have also signed 3 Gujarat-specific pacts.

C. National Heritage City Development and Augmentation Yojana

• The National Heritage City Development and Augmentation Yojana (HRIDAY) was launched in 2015 with an initial coverage of 12 cities.
• The scheme is aimed at preserving and revitalizing the soul and unique character of the heritage cities in the country.
• The Mission is being operated as a Central Sector Scheme and is initially being implemented in 12 identified cities namely, Ajmer, Amaravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram, Mathura, Puri, Varanasi, Velankanni and Warangal.

D. Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

The Objective of the Mission:

• To improve basic urban infrastructure in 500 cities/ towns which would be known as Mission cities/ towns. The Mission is being operated as a Centrally Sponsored Scheme (CSS).
• It aims to cover all cities and towns with a population of over one lakh with notified Municipalities, including Cantonment Boards (Civilian areas) and certain other cities like capital towns, some cities on stem of main rivers and tourist and hill destinations.

The Purpose of AMRUT:

• Ensure that every household has access to a tap with assured supply of water and a sewerage connection;
• Increase the amenity value of cities by developing greenery and well maintained open spaces (e.g. parks); and
• Reduce pollution by switching to public transport or constructing facilities for non-motorized transport (e.g., walking and cycling).
• AMRUT makes states equal partners in planning and implementation of projects, thus actualizing the spirit of cooperative federalism. As of now, 497 cities/ towns have been selected under this Mission.

An advance of 25.00 lakh per city or as per eligibility wherever it comes below 25.00 lakh, has been released to states/UTs for preparation of Service Level Improvement Plans (SLIP) by ULBs.

On the basis of SLIP, states will prepare the State Annual Action Plan (SAAP). As an advance of 123.38 crore has been released to states/UTs for preparation of SLIP under A&OE of this Mission.