India: Urban Challenges

Urbanization in India

Urbanization is not a side effect of economic growth; it is an integral part of the process. As in most countries, India’s urban areas make a major contribution to the country’s economy. Although less than 1/3 of India’s people live in cities and towns, these areas generate over 2/3 of the country’s GDP and account for 90% of government revenues.

India’s towns and cities have expanded rapidly as increasing numbers migrate to towns and cities in search of economic opportunity. Slums now account for 1/4 of all urban housing. In Mumbai, more than half the population lives in slums, many of which are situated near employment centers in the heart of town, unlike in most other cities in developing countries.

Meeting the needs of India’s soaring urban populations is and will continue to be a strategic policy matter. Critical issues that need to be addressed are:

• Poor local governance
• Weak finances
• Inappropriate planning that leads to high costs of housing and office space; in some Indian cities costs are among the highest in the world
• Critical infrastructure shortages and major service deficiencies that include erratic water and power supply, and woefully inadequate transportation systems
• Rapidly deteriorating environment


Urban Challenges

Planning:

• Many urban governments lack a modern planning framework
• The multiplicity of local bodies obstructs efficient planning and land use
• Rigid master plans and restrictive zoning regulations limit the land available for building, constricting cities’ abilities to grow in accordance with changing needs.

Housing:

• Building regulations that limit urban density - such as floor space indexes – reduce the number of houses available, thereby pushing up property prices
• Outdated rent control regulations reduce the number of houses available on rent – a critical option for the poor
• Poor access to micro finance and mortgage finance limit the ability of low income groups to buy or improve their homes
• Policy, planning, and regulation deficiencies lead to a proliferation of slums
• Weak finances of urban local bodies and service providers leave them unable to expand the trunk infrastructure that housing developers need to develop new sites.

Service delivery:

• Most services are delivered by city governments with unclear lines of accountability
• There is a strong bias towards adding physical infrastructure rather than providing financially and environmentally sustainable services
• Service providers are unable to recover operations and maintenance costs and depend on the government for finance
• Independent regulatory authorities that set tariffs, decide on subsidies, and enforce service quality are generally absent.

Infrastructure:

• Most urban bodies do not generate the revenues needed to renew infrastructure, nor do they have the creditworthiness to access capital markets for funds
• Urban transport planning needs to be more holistic – there is a focus on moving vehicles rather than meeting the needs of the large numbers of people who walk or ride bicycles in India’s towns and cities.

Environment:

• The deteriorating urban environment is taking a toll on people’s health and productivity and diminishing their quality of life.



To read detail report : http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/0,,contentMDK:21531567~pagePK:146736~piPK:146830~theSitePK:223547,00.html#2analysis
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