No More Urban Legend

Context: 15th Finance Commission has provided some insights for improving the efficiency of urban agglomerations in India.

Benefits of Urbanization

• Economic:
  • Large market - promotes industries: due to the availability of diverse skills and economies of scale.
  • Low per-capita cost for providing services: like education, health etc
• Social: Breaks down rigid social structures and promotes national integration due to the presence of a large heterogeneous population with diverse languages, religions etc.

Challenges to urbanization in India:

• Slow growth in urbanization: Urban agglomerations with more than 1 million populations have grown from only five cities in 1951 to 53 in 2011. This is due to an ambivalent attitude towards urbanization: 
  • Emphasis on self-sufficient villages: Mahatma Gandhi was all in favour of idyllic self-sufficient villages and less than enthusiastic about technology, railways and urbanization.
• Spatial and functional fragmentation in the governance of urban agglomerations: because - 
  • Lack of Integrated and coordinated governance across an urban agglomeration.
  • Non-compliance with 74th Constitutional Amendment (Articles 243P and 243ZE) that mandates to constitute metropolitan planning committees in metropolitan areas.

Some initiatives for planned urbanization

• Urban employment programme Swarna Jayanti Shahari Rozgar Yojana (SJSRY)-1997.
• Housing programme Valmiki Ambedkar Awas Yojana (VAMBAY)-2001.
• Jawaharlal Nehru National Urban Renewal Mission (JNNURM)-2005.
• 15th Finance Commission recommendation: proposed a million-plus challenge fund (MCF) of a substantive amount of Rs 38,000 crore for 50 urban agglomerations (with million-plus population)
  • MCF is performance-linked to outcomes in water supply, sanitation and clean air.