Urbanisation issues and Programs

Introduction:

History of Urbanization in India

Urbanization in India began to accelerate after independence, due to the country’s adoption of a mixed
economy, which gave rise to the development of the private sector. Urbanization is taking place at a
faster rate in India. Population residing in urban areas in India, according to 1901 census, was 11.4%.
This count increased to 28.53% according to 2001 census, and crossing 30% as per 2011 census, standing
at 31.16%. According to a survey by UN State of the World Population report in 2007, by 2030, 40.76%
of country’s population is expected to reside in urban areas. As per World Bank, India, along with China,
Indonesia, Nigeria, and the United States, will lead the world’s urban population surge by 2050. Causes
of urbanization in India

The main causes of urbanization in India are:-

1. Expansion in government services, as a result of Second World War.

2. Migration of people from Pakistan after partition of India.

3. The Industrial Revolution

4. Eleventh five year plan which aimed at urbanization for the economic development of India

5. Employment opportunities are very important reasons for people moving towards cities

6. Infrastructure facilities in the urban areas.

7. Growth of private sector after 1990.

The Problems and issues in urbanization in India

Since in our country, urbanization is unplanned due to uncontrolled migration. Due to unplanned
urbanization, India is facing too much problem such as unemployment, electricity problem, pollution,
social problems, improper sanitation facilities etc. Rapid rise in urban population in India is leading to
many problems like increasing slums, decrease in standard of living in urban areas, also causing
environmental damage. Following problems need to be highlighted.

1. Urban lounge:

Urban sprawl or real expansion of the cities, both in population and geographical area, of rapidly
growing cities is the root cause of urban problems. In most cities the economic base is incapable of
dealing with the problems created by their excessive size. Massive immigration from rural areas as well
as from small towns into big cities has taken place almost consistently; thereby adding to the size of
cities.
2. Overcrowding:

Overcrowding is a situation in which too many people live in too little space. Overcrowding is a logical
consequence of over-population in urban areas. It is naturally expected that cities having a large size of
population squeezed in a small space must suffer from overcrowding. This is well exhibited by almost all
the big cities of India.

3. Housing:

Housing provision for the growing urban population will be the biggest challenge before the
government. The growing cost of houses comparison to the income of the urban middle class has made
it impossible for majority of lower income groups and is residing in congested accommodation and many
of those are devoid of proper ventilation, lighting, water supply, sewage system, etc. For instance in
Delhi, the current estimate is of a shortage of 5, 00,000 dwelling units the coming decades. The United
Nations Centre for Human Settlements (UNCHS) introduced the concept of “Housing Poverty” which
includes “Individuals and households who lack safe, secure and healthy shelter, with basic infrastructure
such as piped water and adequate provision for sanitation, drainage and the removal of household
waste”.

4. Sanitation:

The poor sanitation condition is another gloomy feature in urban areas and particularly in slums and
unauthorized colonies of urban areas. The drainage system in many unorganized colonies and slums do
either not exist and if existing are in a bad shape and in bits resulting in blockage of waste water. These
unsanitary conditions lead too many sanitations related diseases such as diarrhea and malaria. Unsafe
garbage disposal is one of the critical problems in urban areas and garbage management always
remained a major challenge.

5. Squatter Settlements:

No clear-cut distinction can be drawn between slums and squatter settlements in practice except that
slums are relatively more stable and are located in older, inner parts of cities compared to squatter
settlements which are relatively temporary and are often scattered in all parts of the city, especially
outer zones where urban areas merge with their rural hinterland. Normally, squatter settlements
contain makeshift dwellings constructed without official permission (i.e., on unauthorized land).

6. Environmental concern:

Vulnerability to risk posed by the increasing man-made and natural disasters. According to UNDP 70 %
of Indian population is at risk to floods and 60% susceptible to earthquakes. The risk is higher in urban
areas owing to density and overcrowding. Urban areas are becoming heat islands, ground water is not
being recharged and water crisis is persistent. Here making, water harvesting compulsory will be
beneficial.

7. Poverty:
Today roughly one third of the urban population lives below poverty line. There are glaring disparities
between haves and have-nots in urban areas. The most demanding of the urban challenges
unquestionably is the challenge posed by poverty; the challenge of reducing exploitation, relieving
misery and creating more human condition for urban poor. There is rise in urban inequality, as per UN
habitat report, 2010, urban inequality in India rose from 34 to 38 % based on consumption in period of
1995 to 2005.

8. Transport:

As high income individual are buying more private vehicle and use less public transport. Such huge
number of vehicles in cities is causing more traffic jam, which in turn decreases the efficiency of public
transport. Also the penetration of public transport is less, which makes people use private vehicle. Public
transport is less disabled friendly. There is also lack of infrastructure and poor maintenance of existing
public transport infrastructure.

9. Unemployment:

The problem of unemployment is no less serious than the problem of housing mentioned above. Urban
unemployment in India is estimated at 15 to 25 per cent of the labour force. This percentage is even
higher among the educated people.

10.Water:

Water is one of the most essential elements of nature to sustain life and right from the beginning of
urban civilization, sites for settlements have always been chosen keeping in view the availability of water
to the inhabitants of the settlement. However, supply of water started falling short of demand as the
cities grew in size and number.

11.Trash Disposal:

As Indian cities grow in number and size the problem of trash disposal is assuming alarming proportions.
Huge quantities of garbage produced by our cities pose a serious health problem. Most cites do not have
proper arrangements for garbage disposal and the existing landfills are full to the brim. These landfills
are hotbeds of disease and innumerable poisons leaking into their surroundings.

12.Urban Crimes:

Modern cities present a meeting point of people from different walks of life having no affinity with one
another. Like other problems, the problem of crimes increases with the increase in urbanization. In fact
the increasing trend in urban crimes tends to disturb peace and tranquility of the cities and make them
unsafe to live in particularly for the women.

Conclusion:

Urbanization is the physical growth of urban areas as a result of rural migration & it is closely linked to
modernization, industrialization, and the sociological process of rationalization. Poverty, unemployment
and under employment among the rural immigrants, beggary, thefts, burglaries and other social evils
are on rampage. Urban sprawl is rapidly encroaching the precious agricultural land. The urban
population of India had already crossed the 285 million mark by 2001. By 2030, more than 50 per cent of
India’s population is expected to live in urban areas.

Programs for Urban development

Nearly 30 per cent of India’s population lives in urban agglomerations. The fast-paced
urbanisation in the country, which is closely linked to the overall economic progress, has led the
cities to encounter some serious challenges on the socio-economic front such as unemployment
as well as excess load on existing infrastructure in cities like housing, sanitation, transportation,
health, education, utilities, etc. In order to upgrade the quality of life of people, especially the
urban poor, the Ministry of Housing and Urban Development has been actively introducing new
schemes and reinventing the existing schemes which deal with these specific issues.

The major urban development schemes in India:

Smart Cities Mission

Launched on June 25,  2015, the Smart Cities Mission is a flagship scheme under the Ministry of
Housing and Urban Affairs. This ambitious programme by the Indian Government aims at
building 100 Smart Cities across India with focus on planned urbanisation and sustainable
development as a support system for the neighbouring cities. It also involves the development of
high-quality infrastructure with provision of basic amenities, education, health services, IT
accessibility, digitisation, e-governance, sustainable development, safety and security. Global
cities such as Singapore, Japan, and the USA are offering valuable support to India’s mission,
which also emphasises on economic development of urban centres by creating more jobs and
enhancement in income.

Progress so far: The mission involves as many as 3,183 projects worth Rs 1,45,245 crore. But
so far, work has been finished only in projects worth Rs 4,960 crore, amounting to only five per
cent of total projects. The target of completion of the projects was extended from 2019-20 to
2022-23 for execution of projects in cities selected in round four. Funds worth Rs 500 crore will
be released for the top 15 cities as per data released by Ministry of Urban Development.

Pradhan Mantri Awas Yojana (PMAY) (Urban) or Housing for All

The scheme was launched on  June 25, 2015 for providing 20 million affordable homes for the
urban poor including slum dwellers by March 2022. The beneficiaries include Economically
weaker section (EWS), low-income groups (LIGs) and Middle-Income Groups (MIGs).
Implemented as Centrally Sponsored Scheme with two components - PMAY (Urban) and
PMAY (Rural), the mission involves providing central assistance to implementing agencies
through States and UTs.
Progress so far: As per recent data by the union ministry, 51 lakh houses against the required 1
crore are approved in last 3 years of implementation, over 28 lakh houses grounded and in
various stages of construction and 8 lakh houses have been completed with around 8 lakh houses
occupied by the beneficiaries.

Swachh Bharat Mission - Urban (SBM - U)

Launched on October 2, 2014, The Swachh Bharat Mission is the government’s nationwide
flagship programme with the objective of universal sanitation coverage in urban areas with a
budget allocation of Rs 41,765 crore for 2018-19. It is a comprehensive sanitation scheme which
aims to make the country open defecation free by 2019, promote 100 per cent collection and
scientific processing of municipal solid waste, encourage healthy sanitation practices and equip
the urban local bodies (ULBs) to design, execute and operate systems. The overall estimated cost
for the SBM is Rs 62,009 crore of which Rs 14,787 crore is the centre’s share.

Progress so far: As on March 31st 2018, 52 lakh individual household toilets and 3.2 lakh public
toilets have already been built. The Housing and Urban Affairs Minister, Hardeep Singh Puri,
recently announced that the government will meet the target of building 72 lakh toilets one year
ahead of its scheduled time.

Jawaharlal Nehru National Urban Renewal Mission (JNNRUM)

Launched in 2005, Jawaharlal Nehru National Urban Renewal Mission was a city-modernisation
scheme with an investment of over $20 billion over seven years. It covers two components viz.
provision of basic services for urban poor (BSUP) and an Integrated Housing and Slum
Development Programme (IHSDP). The scheme was designed to raise investment in urban
infrastructure, build better civic amenities, ensure universal access to basic utilities as well as
create affordable homes for the urban poor, slum dwellers and people of economically weaker
sections.

Progress so far: As many as 65 mission cities were identified under the scheme. The sub-
missions of JNNRUM were to promote widespread integrated development. The mission period
of the scheme was extended upto March 2015 to complete ongoing works. JNNRUM has been
replaced by another similar city-modernisation scheme AMRUT.

AMRUT (Atal Mission for Rejuvenation and Urban Transformation)

Launched in 2015, the focus of the AMRUT scheme was on infrastructure creation that has a
direct link to provision of better services to the citizens. Closely connected to the Swachh Bharat
Mission, the scheme includes provision of water supply facilities, sewerage networks,
stormwater drains, urban transport, and open and green spaces, across the selected 500 Indian
cities. The allocated budget under the scheme is around Rs 50,000 crore for the period 2016 -
2021.
Progress so far: Work on the projects is underway across 20 cities and towns.

Other urban development schemes

 National Urban Sanitation Policy (NUSP): The National Urban Sanitation Policy was
formulated in 2008 which laid out the government’s vision to provide hygienic and
affordable sanitation facilities for the urban poor especially women as well as addressing
the challenges with effective city sanitation plans.

 Heritage City Development and Augmentation Yojana (HRIDAY): The scheme was

introduced on 21st January 2015 for the holistic development of heritage cities. It deals
with preserving and reviving the soul of the heritage city, as well as the development of
core heritage infrastructure projects and revitalization of urban infrastructure for areas
around heritage assets.

 National Urban Livelihoods Mission (NULM): Launched on 24th September 2013 by

the Ministry of Housing and Urban Poverty Alleviation (MHUPA), the scheme is a
livelihood promotion programme to reduce poverty and vulnerability of the urban poor
households by enabling them to access gainful self-employment and skilled wage
employment opportunities thereby enhancing their livelihood. It also addresses the
livelihood concerns of urban street vendors. It has been implemented across 790 cities.

 National Urban Transport Policy, 2006: The National Urban Transport Policy involves
incorporating urban transportation as an important parameter at the urban planning stage.
It also focuses on the introduction of intelligent transport systems, reduction of pollution
levels and encouraging greater use of public transport and non-motorized modes through
central financial assistance.

Urban Local Finance: Mechanism, Problems, Way Forward

Municipal Corporations and Municipalities raise their own resources from a variety of sources,
as provided for in the respective municipal laws.

Their own revenue sources are income from

(i) taxes, (ii) fees and fines, and; (iii) earning from municipal enterprises like land, tanks,
markets, shops, etc.

Besides these bodies receive grants from the State.

Property tax on land and buildings is the most important source of income of most urban local
bodies. Other taxes levied by them are advertisement tax, professional tax etc. Octroi still
remains an important source of income of municipalities in Western India.
Now, the trend is toward abolishing this tax as it obstructs the free flow of traffic on highways.
Municipalities also charge fines for breach of municipal rules and regulations. From municipal
shops and markets and rest houses, municipalities often earn considerable sum of revenue.

It is a general practice for States to give grants to their municipal bodies to improve their revenue
position. State grants-in-aid may be on ad hoc basis; or, it can be on the basis of certain
principles like size of population, slums concentration, location of town, etc.

Some of the taxes and rates collected by urban bodies are: Property Tax; Water tax for water
supplied; Sewerage Tax, Fire Tax; Taxes on animals and vehicles; Theatre Tax; Duty on transfer
of Property; Octroi Duty on certain items brought into the city; Education Cess (Tax); and
Professional Tax.

Some other sources of income are fines and fees such as Fees on Tehbazari on takhats and
chabutras (in market area); licence fees – on cycle rickshaw , bicycles etc.; rent from municipal
shops; and fines imposed for violation of municipal by-laws.

Problems with Finances

One of the biggest problems which the urban local bodies face is the scarcity of finances. Their
sources of income are inadequate when compared to their functions therefore putting pressure on
them.

1. Lack of sources: As discussed above, their sources of income are varied. Yet, most of
the income generating taxes are levied by the union and state governments and the taxes
collected by the urban bodies are not sufficient to cover the expenses of services
provided. ULB’s hesitate in imposing taxes because of the fear of backlash of the
electorate. Further, the position of the smaller municipal institutions is much worse and at
times they find it difficult to even meet their establishment costs.

2. Ill-equipped staff: The staff at the disposal of these bodies is ill-trained and ill-equipped
to effectively collect the taxes levied.

3. Problems with property tax: With the abolition of Octroi by most States, Property Tax
is the most important source of revenue for local governments. There have been
substantial reforms in Property Tax administration in recent years. Earlier, ‘Annual
Rental Value’ was the basis of levy of this tax. This mode of assessment had many
drawbacks – the manner of assessment was opaque and gave a lot of discretion to
assessing officials and it was inelastic and non-buoyant.

4. Smaller tax base: It is estimated that only about 60%-70% of the properties in urban
areas are actually assessed. There are several reasons for low coverage. The boundaries
of municipal bodies are not expanded to keep pace with the urban sprawl; as a result, a
large number of properties fall outside the legal jurisdiction of the municipal bodies.
 5. User charges: There has been a tendency to charge for various services at rates that are
much lower than the actual cost of provisioning such services. These user charges include
water charges, sanitation and sewerage charges, waste collection charges, charges for
street lighting, fees for parking, fees for use of congested roads by motorists etc.

 Way Ahead with Finances

1. Creating a separate tax domain for local governments, by amending the Constitution,
is not practicable. However, States should ensure that the law gives sufficient powers to
the local bodies regarding taxes that are more appropriately collected at local levels.

2. Steps are already being taken under JNNURM for reforms of the property tax
regime including use of GIS for the purposes of mapping of all properties in order to
improve the efficiency of collection of property tax. Property tax details for all properties
should be placed in the public domain to avoid any type of collusion between the
assessing authorities.

3. Introduction of the new simplified and transparent system of taxation would

definitely improve the collection efficiency. A periodic physical verification of the
properties and taxes levied on them should be carried out in each municipal area by a
separate wing directly under the control of the Chief Executive.

4. Octroi should be abolished, but the States should evolve mechanisms to compensate the
local governments for the loss of revenue caused by such abolition.

5. An impact study should be carried out for all major developments in the city. A
congestion charge and/or betterment levy in relation to such projects may be levied
wherever warranted.

6. The power to impose fines for violation of civic laws should be given to municipal
authorities. The relevant laws may be suitably modified