‘Core debilities’ reducing efficiency of improving infra in Indian cities: Report
Traffic speeds have slowed down, living spaces have not expanded, and prices of services such as water, quality education, and healthcare have risen faster than inflation
New Delhi: While income levels are rising in cities with improved public services and implementation of large-scale construction projects backed by central funding under various schemes and missions, persistent “core debilities” are reducing the efficacy of these positive initiatives, pointed out the ‘India Infrastructure Report 2023-Urban Planning and Development’ released Monday.
There are urban constraints -- traffic speeds have slowed down, living spaces have not expanded, and prices of services such as water, quality education, and healthcare have risen faster than inflation, wrote Sebastian Morris, chairperson of the Centre for Public Policy and Governance at Goa Institute of Management, introducing the IIR-2023 report.
Thirty-seven subject experts have contributed 25 chapters under seven verticals to IIR-2023, a joint initiative of the National Institute of Urban Affairs, a think tank under the Union Ministry of Housing and Urban Affairs, IDFC Foundation and Infrastructure Development Corporation (Karnataka) Limited (iDeCK).
The basic debilities, said Morris, the editor of IIR-2023 who also wrote the chapter on governance and planning challenges, are problems emerging from the “dysfunctional organisations that characterise urban government with no clear public accountability” and the nature of master planning of cities.
Blaming the rising population for urban problems is a common refrain. But this rapid population growth, Morris argued, is part of the overall phenomenon of economic transformation. The high population density, he said, is forced upon people by “design and planning errors” that for long promoted highly regulated low Floor Space Index – the maximum permitted space for construction based on the plot size -- resulting in cramped living spaces or pushing people into slums and informal settlements.
“Little land being released for urban habitats, extreme inequity in access to land, and very lavish use of land by governments and the powerful are the true reasons…” for high unit costs of built-up spaces and the growth of urban sprawl, said Morris.
Writing on city infrastructure planning in IIR-2023, Saswat Bandyopadhyay and Gargi Mishra from CEPT University, pointed out how master plans, which fix land uses and zoning for 20 years or so, fail to anticipate infrastructure requirements and investments for water supply, sewerage, transportation etc. are left for the future, subject to the allocation of adequate funds. They also stressed the need to link master plans to infrastructure plans.
The government alone cannot pay for building physical infrastructure to match rapid urbanisation, and private partnership was a “financial necessity,” wrote Venkatesh Sathyanarayana, independent director at ICAP Trust, and Raghu Dharmapuri Tirumala, senior lecturer at the University of Melbourne, in the chapter on PPPs in the urban sector.
Even as the Centre and the states had enabling policies and regulations to draw private participation and streamline procurement processes, the authors said, issues related to land acquisition, the absence of suitable PPP models in the complex urban services sectors, low scope for tariff increase, until services improved significantly and low capability of Urban Local Bodies even of bigger cities, were the main hindrances in getting private partnership in the urban sector.
“The need is high not because the investment requirements are large but because efficiency and design improvements demand a larger role for the private sector,” they said.
Another form of financing urban infrastructure and services is municipal bonds -- a debt obligation issued by a municipal entity with the promise to pay the bond interest on a specified payment schedule and the principal at maturity – and the first such instrument was issued by Ahmedabad Municipal Corporation in 1998.
Following this, wrote Sujatha Srikumar and Raja Venkataraman from Powertec, a multi-disciplinary engineering consultancy firm, in the chapter ‘Municipal Bonds: An Analytical Report’, it was expected that the bond market would contribute to municipal resources. While a few municipal corporations have issued such bonds, the municipal bond markets have not “taken off in a major way.”
Again, a let down was the poor capabilities of Urban Local Bodies (ULBs). Successful bonds require improvement in the ULB’s creditworthiness or their ability to make timely interest and principal payments and enhance the bankability of their projects.
The solution, the authors said, is a buoyant municipal tax base, efficient collection of property tax with tools such as GIS mapping, and a more equitable sharing of GST revenues by the Centre and State to offset the loss of municipal revenues such as now abolished Octroi and entertainment tax. They also underlined the need to build on national schemes, such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), that offer incentives for municipal bond market development.
Get Current Updates on India News, Narendra Modi Live Updates along with Latest News and Top Headlines from India and around the world