From urban to urbane PDF Print E-mail
Tuesday, 08 March 2011 00:00
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With a fifth of India’s urban population coming from migration each year, and the population of urban India set to rise almost three-fourths over the next two decades, a revolution is in the making. Urban India always earned a lot more than rural India, citizens in even small towns earn 50% more than their rural counterparts, but the scale is truly huge (NCAER analysis shows

Top 20 cities account for 10% of India’s population, 20% of expenditure, 30% of income and 60% of surplus income!). With 40% of India’s population likely to live in cities that will generate 75% of the country’s income in the next two decades, the most obvious point is that the future has never been brighter for urban politicians. It is equally obvious that if urban India doesn’t rise to the challenge—in the next two decades, India will have to create as many cities as it has in the last several hundred years—it could look like an extended Dharavi. About a fourth of India’s urban population is in slums, and in places like Greater Mumbai the figure is as high at 54%.

The Report on Indian Urban Infrastructure and Services, chaired by Isher J Ahluwalia, puts a sum to what urban India needs—R39.2 lakh crore over a 20-year period at 2009-10 prices. Since that means little to the lay person, the committee simplifies this to say around 2.2% of GDP will have to be invested in urban areas by 2030. But as Ahluwalia has pointed out in a monthly series in FE for over a year, money is probably the least of urban India’s challenges. Cities don’t have any powers to levy taxes, and they desperately need to get their governance structures right—Pune and Chennai, among the best-run cities, meter just 16% and 4% of their water connections, respectively. Given that roughly half this amount is additionally required for O&M, the importance of getting governance structures right is critical—Ahluwalia’s Postcards of Change is precisely about cities that have made such shifts and got a payback in relatively short periods of time. Since most urban projects, whether the Delhi Metro or the new airport, have been financed by huge dollops of land—250 acres for the airport and 960 acres for the metro—availability of finance cannot be the problem.

The Report talks of other solutions such as increased FSI since urban India’s FSI is probably the lowest in the world. But the real issue is of the government ceding powers to mayor-CEOs who can design and run cities efficiently—a well-designed city can cut energy consumption by 40%; mayor-CEOs who can raise taxes to finance development … Just the land requirements and the environmental clearances required makes the mind boggle, Ahluwalia’s committee is asking for really fundamental governance reforms—empowering urban local bodies to collect taxes, for formula-based transfers from the central tax pool. At the end of the day, the Report is about whether primarily rural-centric politicians are willing to give urban India the space it needs.


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