By Tathagata Chatterji, Professor (Urban Management & Governance), Xavier University Bhubaneswar
By Tathagata Chatterji
Professor (Urban Management & Governance), Xavier University Bhubaneswar
Coronavirus had badly impacted urban India, which accommodates one-third of its population and two-thirds of economic production. Metro cities, which are nerve centers of the economy and gateways to global trade, turned into pandemic epicenters. Millions of jobs were lost during the COVID-19 peak and lockdown phase, which triggered an unprecedented wave of deurbanization of migrant workers.
The pandemic had also widened urban social
divides. Ignored and entrenched socioeconomic inequalities in our city systems
regarding access to water, sanitation, healthcare, and digital connectivity, have
come out in the open. It is imperative to get our cities, especially metropolitan
cities, up and running again, create jobs, and meet India's burgeoning youth
population's livelihood aspirations.
Would the first post-pandemic Budget help us restart
our city economies in full throttle and help us build better, healthier, and
more humane cities? Analysis of the Budget presents a mixed picture. Finance
Minister (FM) Nirmala Sitharaman addressed several issues related to urban
infrastructure while presenting the Union Budget 2021-22.
Total funds earmarked for the urban
development have also gone up from Rs 50,040 crore in FY 2020-21 to Rs 54,581 crore in FY 2021-22, an overall increase of 9.07 percent. However,
funds allocated for transfer to the states for centrally sponsored schemes had
remained static at Rs 24,845 between FY 2020-21 and FY-2020-22. Moreover, devolution of
grants to the Urban Local Bodies (ULBs) had also gone down from Rs 25,098 crore in FY 2019-20 to Rs 22,114 crore in FY 2021-22 – a drop of 11.89 percent.
Urban-centric issues in the budget speech could be
broadly grouped around the themes of cleanliness,
mobility, and shelter.
Cleanliness
The Economic Survey 2021-22 and the 15th Finance Commission report strongly emphasized the criticality of sanitation and water services in the COVID-19. With cleanliness high on the government's priority table, the Swatch Bharat Mission received a new impetus in the Budget. Announcing Swatch Bharat Mission 2.0, FM mentioned that the scheme would aim towards complete fecal sludge management and wastewater treatment, source segregation of garbage, reduce single-use plastic and manage waste construction-and-demolition activities, and bioremediation of garbage dump sites. The second phase of the mission would be implemented over five years through an outlay of rupees 1.41 lakh crore.
Additionally, Rs 2,217
crore was allocated to address air pollution in
42 big cities with more than one million. Moreover, to provide universal piped
water supply in all 4,378 ULBs over the next five years, the FM announced the Jal
Jeevan Mission (Urban) launching with an allocation of Rs 2.87
lakh crore.
Mobility
FM highlighted both bus and rail-based systems under
mobility. Presently, the country has a metro rail network of 702
km, and another
1,016
km of the network is under-construction in 27 Indian
cities. She declared that expansion of rail-based mass transit system
shall be carried out for Tier-II cities and fringe areas of Tier-I cities primarily
through MetroLite and MetroNeo technologies.
According to the guidelines issued by the Ministry of Housing and Urban Affairs
(MoHUA), the Metrolite trains would have 3-car units capable of carrying 300
passengers at a maximum speed of 60 km per hour. The trains would be powered by
750V DC overhead traction and standard run-on gauge of 1435 mm width laid at
grade or elevated. MetroLite trains' capital costs are about 40 percent of
conventional metro lines and are also cheaper to maintain. The MetroNeo trains,
which even cheaper, can run on road slabs and have rubber tires.
Adaptation of light rail systems will provide a cleaner
and greener mass transit system at a cheaper cost. The Budget also announced
that the Centre would provide counterpart funding for the extension of the
metro rail networks of Kochi (Rs 1957 crore), Chennai (Rs 63,246), Bengaluru (Rs 14,788), Nagpur (5,9575), and Nashik (Rs 2092 crore).
The budget also announced a scheme to augment city bus services
through an 'innovative' PPP (Public-Private Partnership) model. It was
mentioned 20,000
new buses would be added for which Rs
18,000 crore is allocated. But what form and
shape the 'innovative PPP mode' would take and reconfigure public-sector bus
transport undertakings remains to be seen.
Shelter
The government announced an affordable rental housing program
as a sub-scheme under the PMAY (Pradhan
Mantri Awas Yojana), through PPP mode as part of the economic stimulus package
in May 2020. The Budget 2021-22 sought to facilitate affordable housing through
indirect measures by extending tax
breaks for the developers of notified
affordable housing projects. Similarly, income tax rebates of Rs 1.5 lakh for
individual home buyers were also extended until March 2022.
With the pandemic accelerating the digitalization process,
it was hoped that the FM would announce additional funds for the Smart Cities
Mission, a flagship initiative of the NDA government. Moreover, Integrated
Command and Control Centres developed under the
mission played significant roles in the battle against the coronavirus pandemic
through spatial tracking of virus outbreaks, hospital beds' availability, and targeted
emergency medical assistance delivery. But the prestigious mission failed to
receive any additional support in Budget 2021-22. Similarly, the allocation for
the AMRUT (Atal Mission for Rejuvenation and Urban Transformation) had remained
static between FY 2020-21 and 2021-22.
Both missions were launched in 2015 to upgrade Indian
cities to international standards by infusing digital technology and streamlining
management practices. However, five years down the road, both projects are
struggling with low fund utilization. In the revised Budget for FY
2020-21, the Smart Cities allocation was sharply
cut by Rs 3050 from the original allocation of Rs 6450 crore, while AMRUT faced a more modest reduction of Rs 850 crore from allocated Rs 7300 crore. In FY 2021-22, both the missions are assigned with the
same amount as in the previous year.
Expectations from Budget 2021-22 of an urban employment
guarantee program went in vain after the COVID-19 induced a livelihood crisis of
informal workers in the cities. The hopes were in line with the rural-centric
MGNREGA to reduce vulnerabilities of the urban poor.
The Budget failed to provide any additional financial
support for the ongoing urban poverty alleviation program- Deendayal Antyodaya
Yojana National Urban Livelihood Mission (DAY-NULM). The self-help groups (SHG) registered under the DAY-NULM
in various states contributed enormously to the battle against the pandemic by
producing over 6.80
crore masks and 2,84,000
liters of hand sanitizers. Moreover, the mission had generated over 21
lakh livelihoods.
But in Budget 2021-22, the DAY-NULM was allocated only Rs 795
crore - the
same amount as in FY 2019-20. Additionally, Rs 200 crore was allocated for PM SVANIDHI (Prime
Minister's Street Vendor Atmanirbhar Nidhi) and Rs 100 crore under Nirman Kaushal Vikas Yojana (NKVY). More generous
funding for these ameliorating poverty schemes could have helped reduce the
urban poor's livelihood vulnerabilities in these difficult times.
The DAY- NULM, together with PM- SVANIDHI and NKVY
account for only Rs 1,095, just about 10 percent of their rural counterparts. The
rural livelihood mission- Ajeevika was allocated Rs 10,005 crore in FY 2019-20, which had gone up to Rs 14,473
crore in FY 2021-22- a sharp 44.65 percent
increase. Even though India is going through a process of steady urbanization
of poverty, acknowledgment of the phenomenon seems limited in the top policy
circles.
To sum up, the Budget had reposed faith in the
supply-side approach, focusing on augmenting urban infrastructure and had
sought to favor the PPP model to deliver significant projects. Except for metro
rail projects, direct budgetary support for urban sector schemes does not show
any appreciable increase. This
could be attributed to the difficulties faced by the government due to
covid-induced economic downturn and shortfalls in revenue collection.
However, the flow of funds for urban development may
improve substantially in near future, as the FM tabled the report of the 15th Finance
Commission on the day of the budget presentation. The 15th
Finance Commission has allocated Rs
1.21 lakh crore in grants to the ULBs over five
years compared to Rs
87,000 crore by the 14th
Finance Commission. Recognizing the importance of the million-plus cities in the
Indian economy, the 15th Finance Commission has set aside Rs 38,196 crore
has been set aside as performance-linked grants for 50 million-plus cities.
Basic grants are available for smaller ULBs. Moreover, the
15th Finance Commission also suggested an additional grant of Rs
70,051 crore to rural and urban local
governments for developing public health infrastructure and primary health
clinics. If implemented properly, these recommendations can improve the financial health of Indian cities and reduce disparities with regard to health
care facilities in Indian cities. However, to enable the ULBs to utilize
additional fund flows optimally, it would be necessary to improve their
techno-managerial capacities simultaneously.
About the Author:
Tathagata Chatterji is a professor of Urban Management and Governance at Xavier University Bhubaneswar and a visiting faculty at IIEST Shibpur. Earlier, he taught at SPA Vijayawada, Manipal University, and at the University of Queensland. His research interest focuses on comparative urban governance, rural-urban interface, and spatial politics.
DISCLAIMER: The views expressed in this insight piece are those of the author and do not necessarily reflect the official policy or position of IndraStra Global.
