India to invest Rs 39.2 lakh crore to revive urban infratructure | business | Hindustan Times
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India to invest Rs 39.2 lakh crore to revive urban infratructure

business Updated: Mar 07, 2011 23:38 IST
Moushumi Das Gupta

At present, just about 64% of urban population in India is covered by individual water connections compared with 91% in China, 86% in South Africa and 80% in Brazil. Over 50 million people in urban India defecate in the open every day and public transport accounts for only 22% of urban transport in India, compared with 49% in lower middle income countries like Phillipines, Venezuela and Egypt and 40% in upper middle income countries like South Africa, South Korea and Brazil.

To improve these basic urban infrastructure services, the government needs to invest approx. Rs 39.2 lakh crore over the next 20 years. Of this, a bulk of the investment – about 40% – would be required to upgrade urban roads followed by basic services like water, sewerage, solid waste management (20 percent) and public transport infrastructure (14 per cent.)

This has been recommended by a high powered expert committee formed by the Prime Minister in 2008 to estimate investment requirement for urban infrastructure services. The committee, headed by economist Isher Judge Ahluwalia who is also the chairperson, Indian Council for Research on International Economic Relations, submitted its report to Urban Development minister Kamal Nath on Monday.

“India's economic growth momentum cannot be sustained if urbanization is not actively facilitated,” said Nath while releasing the report.

India's urban population is expected to increase from 350 million today to 600 million by 2031. “At present, a majority of our cities are not ready to meet the challenges of growing urbanization. States as well as municipalities have to invest heavily. State government has to play an enabling role in empowering municipalities to become self sufficient,” said Ahluwalia.

The committee has recommended a regulatory regime for urban services at state levels to address the challenges of not only pricing services correctly but also ensuring the delivery of services and protection of the environment in Indian cities besides encouraging public private participation in service delivery.

“Large expenditures on Indian cities and towns have to be combined with better governance structures, strong political and administrative will to collect taxes and user charges and improved capacity to deliver,” states the report.

Investment Plan
Investment (in Rs lakh crore)
Urban roads
Redevelopment of slums