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Indian urbanisation ‘messy’, needs reforms: World Bank

The World Bank says initiatives are needed to tap India’s economic potential; government exploring part-funding of smart cities by lenders.

business Updated: Sep 25, 2015 09:41 IST
HT Correspondent
HT Correspondent
Hindustan Times
World Bank Report,Indian Urbanisation,Indian Smart cities

Urbanisation in India has been relatively ‘slow, messy and hidden,’ the World Bank said in a report released on Thursday, calling for initiatives both at the policy and institutional level, to tap the economic potential that the country offers.

The Bank said was in talks with the Indian government to provide some initial funding for the smart cities programme and the AMRUT initiative for urban revitalisation.

“Although they have made progress, India and other South Asian countries can make better utilisation of opportunities that urbanisation provides them to transform their economies to join the ranks of richer nations,” it said in the report titled Leveraging Urbanisation in South Asia.

“India’s urbanisation drive will be the biggest of its kind in the next 30 years... the government’s implementing of the 14th Finance Commission’s recommendations will help in devolving finances to states for the programme,” World Bank India director Onno Ruhl said.

“If managed well, urbanisation can lead to sustainable growth by increasing productivity and allowing innovation and new ideas to emerge,” the Bank’s managing director and chief operating officer, Mulyani Indrawati, said.

According to the Bank’s analysis, the country added seven multi-city agglomerations between 1999-2010, taking the total to 30, but Indian cities have so far not been able to take full advantage of these agglomerations.

“This messy and hidden urbanisation is a result of cities finding themselves struggling with the growing urban population,” Indrawati added.

The report also put reforms in the spotlight, saying these are required to address three fundamental deficits in empowerment of local governing bodies, resources and accountability.

“Inter-governmental fiscal relations must be improved to address empowerment; practical ways must be identified to increase the resources available to local governments to allow them to perform their mandated functions and mechanisms must be strengthened to hold local governments accountable for their actions,” the report highlighted.

“It is very encouraging that programmes like smart cities and AMRUT are incorporating many of the ideas outlined in this report. The challenge will be to make this transition inclusive, providing opportunities and jobs to youth, especially women, and supported by efficient service infrastructure,” Ruhl added.

Annette Dixon, World Bank’s vice-president for South Asia, said policymakers in the region can either continue with the same policies or undertake reforms to tap into the unrealised potential of cities in the region.

The urban population in South Asia increased by 130 million from 2000 to 2011 and is poised to grow by almost 250 million in the next 15 years, according to the report.

(With agency inputs)

First Published: Sep 25, 2015 09:34 IST

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