India needs new towns, lots of them

India faces challenges in terms of affordable urban housing. (File Photo: AP)
India faces challenges in terms of affordable urban housing. (File Photo: AP)


  • Policymaking would need to focus on transforming landowners into stakeholders in the urbanization process, likely through public-private partnerships.

A report by Knight Frank and National Real Estate Development Council has forecast that India's GDP could grow to a size of $33 trillion to $40 trillion by 2047, with the real estate sector estimated to contribute over 15%, amounting to $5.8 trillion. The report has also projected a need for 230 million residential units by that year.

One might or might not accept these precise figures. For example, even to reach $33 trillion, at the lower end of the projected range, the Indian economy would have to grow at a compound annual growth rate of 9.5% for 25 years. While this is not entirely outside the realm of the possible, it does not quite fall within the realm of the probable, either. However, there is no disputing the reality of sustained fast growth for decades, causing and caused by urbanization to accommodate workers who move from village to town, to take up jobs in the fast-growing sectors of organized services and industry.

If half of India were to be urban by 2047, the country's urban population would be close to 800 million. This would mean adding roughly 323 million people to the current urban population of about 497 million, assuming an urbanization level of 35% and a total population of 1.42 billion. Given this projection, India would require an additional urban space of more than 15,000 sq km to accommodate such growth, rivaling the United States in terms of population density.

In the existing towns of the country, the price of every additional lot of dwelling tends to be higher than that of the previous lot, for the simple reason that it is a struggle to find fresh space on which to build. Very expensive housing tends to discourage fresh investment in productive enterprises in the area. In San Francisco, whose permitting policies prevent very many additions to the existing stock of housing, rents are sky-high, pushing up wages without really raising living standards of those who receive the wages, who merely pass a high proportion of their wages to their landlords. This makes it difficult for anything but the highest productivity industries to survive in the city.

India is a developing economy, and does not need to make housing costs a constraint on growth of business.

This means that India needs a coherent plan, jointly developed by states and the Centre, to identify zones for urbanization, and build air, road and rail connectivity amongst these new towns and between them and existing highways and expressways.

These new towns must be well planned, to minimize energy consumption, prevent the development of heat islands — a vital concern in the emerging times of extreme weather events, thanks to climate change — efficient drainage, water treatment and recycling, planned waste disposal that digests biowaste into gas for use, decomposes biodegradable plastics and recycles everything recyclable.

Cities that conserve energy tend to be compact and vertical, to minimize commutes. But they would have enough open spaces for the residents to play, jog, stroll, walk their dogs, hold public meetings and house adequate greenery to serve as the city’s lungs. Such cities would also tend to have mixed land use, instead of segregating residential and commercial parts, while regulating commercial operations to protect the space and privacy of the residential units of the cities.

The cities would be designed for public transport using multiple modes, most of them electrically powered. Weather permitting, the roads should encourage mobility on foot, for the sake of the residents’ fitness and energy conservation.

Common facilities such as schools, hospitals, commercial hubs, entertainment areas, and places of worship for different faiths would need to be factored into the planning process. If the city has tourist attractions or large businesses, a plentiful supply of transit accommodation would need to be provided for.

Sewer lines, underground tunnels that house power lines, optical fiber cables, and other such pipes and allow people to enter them and service the assorted pipes that pass through them without suffocation or injury — these must be planned and provided for, instead of being retrofitted in a haphazard fashion.

The key to well-run towns is to keep population within planned limits. This is possible only if there is a large enough supply of new towns that are well-connected to existing towns. This is the importance of identifying zones for urbanization along existing or proposed rail track, highways and expressways.

Policies to release land for urbanization, with the cooperation, rather than hostility, of those who own or make a living out of the land on which a new town would come up, constitute another challenge. The trick is to make land-losers stakeholders in the future prosperity that would be ushered in via urbanization. Devising appropriate public-private partnerships is vital as well.

These are the pre-requisites that must be put in place before real estate developers and their financiers can get a bite of the large urbanization pie future India definitely holds out.

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