Home / News / India /  Indian cities need urgent reform to unlock their potential, says report

Indian cities need urgent reform in order to unlock their economic potential and transform quality of life, according to IDFC Institute’s report on Reforming Urban India. The report suggests that the new National Democratic Alliance (NDA) government needs to focus on recognising the extent of urban growth, improve land utilisation, empower urban local bodies and invest in public transport networks.

According to IDFC institute, a think-tank, Indian cities are more urban than recognised and contribute between 59% and 70% of India’s gross domestic product. The two month old NDA government in their budget for FY 2019-20 has budgeted approximately 48,000 crore for the ministry of housing and urban affairs which is a 11.8% increase since last year’s budget.

Given the rapid rate of urbanisation, the survey says that existing cities suffer from neglect due to unacknowledged development. “Air quality and congestion are worsening, house prices continue to soar, and amenities and services like clean water, public spaces, public transport, and solid waste management are severely deficient. The local bodies entrusted to govern cities do not have sufficient finances, expertise, or personnel to plan for and address these challenges," the report said.

Census 2011 estimates that 31% of India is urban. However, the report says that alternative definitions peg India’s urbanisation rate to be anywhere between 47% and 65%.

“It is worth revisiting incentives and policies that disproportionately benefit rural areas so that they do not become reasons for residents to resist conversion from rural local bodies to urban local bodies," the report suggested.

Missions such as the Smart Cities Mission, to develop 100 smart cities and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) were launched by the NDA government between 2014 and 2019.

The report suggests that the existing land use planning process should be replaced with a more flexible approach, including a mechanism to review and change plans periodically. It adds that a significant share of land in cities, owned by various public authorities, is either being used suboptimally or kept vacant. According to the survey, this use of this land should be optimised by creating a detailed inventory of land ownership and use and then identifying suitable strategies such as leasing, outright sale, providing public housing.

The survey says that Indian cities fall behind international peers on the staff-to population ratio. Janaagraha’s Annual Survey of India’s City-Systems reports that Mumbai has approximately 1,300 staff for every 1,00,000 citizens, compared to New York, which has about 5,000 employees per 1,00,000 citizens.

To address the severe capacity constraints and weak finances, the report suggests that urban local bodies can begin to address their lack of capacity through training their employees in financial and risk management, organisational and administrative matters, design, and implementation of projects.

“As the engines of growth, cities should receive a larger slice of the revenue pie. One recommendation is to allocate a portion of Goods and Services Tax collections for cities. Equally, cities should augment their own revenue collection via property taxes, user charges, and municipal bonds," the survey suggests.

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