The focus on India’s Urban Infrastructure

Recently, a report by World Bank has estimated that India will need to invest about $840 billion over the next 15 years into urban infrastructure to meet the needs of its fast-growing urban population.

Key Points of the Report:

• The report was titled “Financing India’s Urban Infrastructure Needs: Constraints to Commercial Financing and Prospects for Policy Action“.
• Aim: It underlines the urgent need to leverage more private and commercial investments to meet emerging financial gaps.
• Points discussed:
  • About 600 million people will be living in urban cities in India, representing 40 percent of the population by
  • This is likely to put additional pressure on the already stretched urban infrastructure and services of Indian cities.
  • There will be a burden of more demand for clean drinking water, reliable power supply, and efficient and safe road transport amongst others.
  • Currently, the central and state governments finance over 75 percent of city infrastructure, while urban local bodies (ULB) finance 15 percent through their surplus revenues.
  • Only 5 percent of the infrastructure needs of Indian cities are currently being financed through private sources.
  • With the government’s current (2018) annual urban infrastructure investments topping $16 billion will require private financing to fill the gaps.

What are the concerns associated with the Urban Infrastructure in India?

Planning:

• Many urban governments lack a modern planning framework.
• The multiplicity of local bodies obstructs efficient planning and land use.
• Rigid master plans and restrictive zoning regulations limit the land available for building, constricting cities’ abilities to grow by changing needs.

Housing:

• Building regulations that limit urban density – such as floor space indexes – reduce the number of houses available, thereby pushing up property prices
• Policy, planning, and regulation deficiencies lead to a proliferation of slums
• Weak finances of urban local bodies and service providers leave them unable to expand the trunk infrastructure that housing developers need to develop new sites.

Service delivery:

• Most services are delivered by city governments with unclear lines of accountability
• There are a strong bias towards adding physical infrastructure rather than providing financially and environmentally sustainable services

Infrastructure:

• Most urban bodies do not generate the revenues needed to renew infrastructure, nor do they have the creditworthiness to access capital markets for funds
• Urban transport planning needs to be more holistic – there is a focus on moving vehicles rather than meeting the needs of the large numbers of people who walk or ride bicycles in India’s towns and cities.

Migration:

• There is a large population influx to urban centers is causing new cities to emerge and existing ones to expand. This is causing rapid urbanization. Therefore, India needs to develop satellite cities for which the need is for mass-transport systems.

Other Challenges:

• Land Acquisition
• Clearances from numerous agencies
• Environmental Impact Assessment (EIA)
• Poor pre-construction planning

Government Interventions:

• The Smart Cities Mission: The Smart Cities Mission is a major urban renewal program launched by the Government to develop and upgrade living conditions and infrastructure in selected 100 cities all over the country.
  • The objective of the program is to modernize cities by providing core infrastructure and giving a decent quality of life to its citizens, a clean and sustainable environment, and the application of ‘Smart’ Solutions.
  • The Ministry of Urban Development is the anchoring agency for the implementation of the project.
• Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Project: Atal Mission for Rejuvenation and Urban Transformation (AMRUT) along with smart cities were jointly planned and launched by the government to transform urban living conditions through infrastructure gradation.
  • AMRUT is aimed at transforming 500 cities and towns into efficient urban living spaces over five years.
  • Ministry of Urban Development has selected the five hundred cities with the help of state governments.