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Harness urban opportunity

Harness urban opportunity
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First Published: Sun, Aug 09 2009. 10 18 PM IST
Updated: Sun, Aug 09 2009. 10 18 PM IST
Pranab Mukherjee’s Budget speech last week was a wind vane of this government’s views on urban India— and it’s not complimentary. The Rs12,887 crore allocation for the Jawarharlal Nehru National Urban Renewal Mission (JNNURM) as an 87% jump was smoke and mirrors—in reality, it was only a small increase from last year’s revised estimates, and represented less than 4% of the Plan budget.
Compare this with the National Rural Employment Guarantee Act (NREGA), which will spend Rs39,000 crore in giving a man a fish. This isn’t about the money, but the thinking it betrays about the urban sector within the highest levels of the government in our country.
Every rupee of investment in the urban sector is productive—it increases economic activity, creates a multiplier effect on jobs, increases productivity, and leads to greater private investments. These spur development, thereby unleashing a virtuous cycle of progress and increasing tax flows for the government.
My argument has less to do with the funds per se, but more with the strategic vacuum about the potential of the urban sector in the highest echelons of our government—the Prime Minister’s Office, the Planning Commission, the ministries of urban development and housing and poverty alleviation, the finance ministry, and also the many ministries that intersect heavily with urban India—surface transport, defence, railways and industries, to name a few.
There isn’t any coherent, integrated articulation on the potential of India’s urban sector. The subliminal, unstated view is that urban is a social sector, not a core sector that drives the economic engine of the country, unlike power, ports, highways and airports. This is why JNNURM is clubbed with NREGA, the National Rural Health Mission or the Sarva Shiksha Abhiyan.
The reality is that the urban sector is unique—it spans economic and social sectors. Urban is the flywheel of our economic story—at least 60% of our gross domestic product comes from urban India, it occupies only 2% of our landmass, and houses 30% of our people. It is also a social sector, with millions of urban poor living in squalor, without access to affordable housing or basic services; and millions more of the middle class, who suffer from poor quality of life.
The reality also is that urban India is an opportunity waiting to be harnessed, not a problem that needs to be solved.
Four years ago, the same Congress leadership flagged off JNNURM as the largest urban initiative in India’s history. JNNURM was a milestone, but a milestone is precisely what the word means—meant to be passed, to proceed from, not to look back on. I was there when JNNURM was conceived—it was meant to BEGIN the focus of the Union government’s attention on the urban sector, not become a one-time token gesture.
Harnessing the urban opportunity will require JNNURM plus-plus, with well-thought-out interventions to address the duality of the urban proposition, both economic and social: addressing the affordable housing problem; bringing in public-private partnership in urban infrastructure development; providing more fiscal handles for cities; improving urban capacities, and a whole range of such issues.
Think about the years of debate and detailing it took to get some semblance of sense in other core sectors such as power and highways (with the struggle still going on). We haven’t even started this process in the urban sector. Today, no self-respecting large infrastructure company wants to bid for urban projects because of a range of uncertainties— non-standard tender systems, lack of clarity on payments, uncertainty over whether the next city government will renege on the contract, and so on.
At the other end, we have urban citizens across the spectrum—rich, middle-class and poor—who suffer from poor quality of life and, worse still, don’t have any voice in determining the destinies of their cities.
The net result is that urban challenges are running at 100km an hour, and we are patting ourselves on the back that our solutions are going from 10km to 20km an hour; in reality, the problems are actually going further away.
The urban sector needs to be seen as a central linchpin of India’s development story. In doing this, we should have the maturity to move the debate beyond the tired clichés of rural-versus-urban or rich-versus-poor where addressing one somehow means depriving the other. We should also not get trapped in pusillanimous hand-wringing that we cannot do more. We NEED to address ALL our challenges, and harness ALL our opportunities, and have the courage and audacity to do these simultaneously.
The first Budget of the new Union government does not bear good news for urban India. We need to move with urgency, to articulate an integrated urban strategy for our country. We need this soon, so that we can harness the urban opportunity before it becomes an urban problem.
Ramesh Ramanathan is co-founder, Janaagraha. Möbius Strip, much like its mathematical origins, blurs boundaries. It is about the continuum between the state, market and our society. Comments are welcome atmobiusstrip@livemint.com
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First Published: Sun, Aug 09 2009. 10 18 PM IST