Policy Quagmires Bog Down Flagship Urban Revamp Plans

Urban development was the fifth of nine priorities of the 2024-25 Union budget. But only slightly more than half of the budgeted ₹82,576.57 crore was used by January, a parliamentary standing committee on housing and urban affairs in its report tabled last week.

- Soumya Chatterjee

NEW DELHI:

The panel, in its report, noted that the Union ministry of housing and urban affairs (MoHUA) was lagging in its implementation of all flagship schemes, including Pradhan Mantri Awas Yojana-Urban (PMAY-U), Swachh Bharat Mission-Urban (SBM-U), Atal Mission for Rejuvenation and Urban Transformation (AMRUT). Even as 2024 was an election year, the committee noted that the ministry went for a downward revision of its estimated budgets in the two preceding fiscal years too. Further, the ministry, rather than increasing its proposed outlay for FY2025-26, reduced it by ₹11,253.92 crore compared to the previous fiscal.

The panel found that the budgets of almost all flagship missions were shrunk due to lower "demand" from states. However, experts noted that this trend contrasted with the urban population growth, which is projected to reach 800 million by 2050 with half of India's people living in urban areas; and the need for investment in supporting infrastructure, which the World Bank estimated to be ₹4.6 lakh crore annual investment by 2036. Further, according to experts, India's goal of becoming a developed economy by 2047 can only be fuelled by the efficiencies of sustainable urbanisation.

So while our urban infrastructure is in urgent need of renewal, why are funds for the purpose sitting unused?

HT spoke with sectoral practitioners including officials in MoHUA as well as those serving in state governments to understand how to efficiently use the existing central government, which is under-leveraged due to design of existing mission and schemes.

These experts advocated a more decentralised approach to project design and finance, less stringent funding rules, a more nuanced approach for cities of different population sizes and urban capacities and a stronger stress on building capacity and pushing reforms in line with the 74th Constitutional Amendment.

Graded approach vs one scheme for all