Budget pushes urban sector reforms, but lacks plans for implementation: Experts
Experts emphasised the need for specific frameworks, funding mechanisms, and timelines for the urban sector reforms
Appreciating the announcements made by finance minister Nirmala Sitharaman on Tuesday in her seventh budget speech for the urban sector, policy and governance experts emphasised the need for specific frameworks, funding mechanisms, and timelines for the same.
Shishir Gupta, a senior fellow at Centre for Social and Economic Progress (CSEP), said the budget is right to push reforms such as the reduction of stamp duty, digitisation of land records, and reforms of land administration, planning, and usage. “However, it lacks specificity as to how it plans to go about implementing these reforms. The problems and solutions in land markets are relatively well known. The real issue has been implementing these reforms,” he said.
Sitharaman in her speech announced that the Centre would urge states to moderate stamp duties, especially in cities where stamp duties are currently steep. Further reductions in duties for properties purchased by women will be pushed.
On budgetary allocations, Srikanth Vishwanathan, CEO of Janaagraha, a non-profit trust working on city systems, said at 1.7% of the total Union Budget in 2024-25, urban sector allocations are still not substantial while noting that the Union government has increased allocations for the urban sector by over 400% during the past decade, which is creditable. In this situation, he noted, the state governments ultimately would need to take responsibility for a bulk of financing needs of urban infrastructure as 67% of the Union ministry of housing and urban affairs (MoHUA) budget caters to two sectors of housing and transport alone.
“The Union government would, therefore, have done well to focus on catalytic spends such as a national municipal infrastructure pipeline, an inventory of public land in cities and market valuation of the same, a national mission for city roads, and municipal capability centres to build shared institutional capacities in cities,” he said.
In all, the ministry of housing and urban affairs (MoHUA) has got an outlay of Rs.82,576.57 crore for 2024-25 compared to Rs.69,270.72 crore of revised estimate for 2023-24, marking an increase of 19.2%. Comparing the budgetary estimates year-on-year, the outlay has increased by 8%, from an allocation of ₹76,431.60 crore in 2023-24 to ₹82,576.57 crore in 2024-25 for MoHUA.
On the significant difference in revised estimates and the initial outlay, Vishwanathan said the Union government should now focus sharply on ensuring that allocated budgets are spent, given a 35-50% fall in revised estimated over budget estimates 2023-24 in some flagship schemes.
Among other highlights, the budget mentioned that a transit-oriented development (TOD) framework for 14 large Indian cities will be prepared among major announcements along with 10 million new houses for urban poor as already approved by the Cabinet.
Rutul Joshi, senior associate professor of urban planning at CEPT University, said the concept has been mentioned in five budget speeches, starting from 2019-20. “We are yet to see the large-scale implementation on the ground. TOD policies are often not integrated with the master plans, urban local bodies may not have funds to kick-start such projects. This budget does not give any specific allocation for the same,” he said, citing the example of the government-led TOD project in Delhi’s Karkardooma, which, with ₹1,200 crores of investments, is yet to be completed after 12 years.
Similarly, Aravind Unni, an expert on urban poverty alleviation policies, also questioned the lack of mention of property rights reforms for residents of slums and unauthorised colonies. He also said that the budget failed to address the need for a special housing scheme addressing slum dwellers.