The need for a localised urban agenda

Context :

• India is undergoing rapid urbanisation, set to have the largest urban population globally.
• However, urban planning remains largely centralised, with limited local autonomy.
• A one-size-fits-all approach does not align with India’s diverse urban landscape.
• Decentralisation is crucial to ensure cities receive need-based solutions rather than top-down directives.

Relevance : GS 2(Local Governance)

India’s Urbanisation Journey and the Role of the Centre

• Post-1990s Shift: Liberalisation led to increased urban migration and infrastructure development.
• Centrally Sponsored Schemes (CSS):
  • Past Initiatives: JNNURM, Indira Awas Yojana, Rajiv Awas Yojana.
  • Current Initiatives: PMAY, AMRUT, Swachh Bharat Mission, Smart Cities Mission.
  • These schemes shaped urbanisation but often imposed a rigid, uniform model.
• Centrally Planned Mobility Infrastructure:
  • Metro projects receive nearly 30% of the Union budget, leaving less flexibility for local solutions.
  • City mobility plans are heavily influenced by national priorities rather than local needs.

Financial Centralisation: Challenges and Implications

• Cities as Economic Hubs:
  • The Centre sees cities as growth engines, justifying its financial control.
  • Infrastructure investment is considered key to achieving the $5 trillion economy target.
• Conditional Funding & Limited Autonomy:
  • 15th Finance Commission imposed conditions on cities, such as linking property tax hikes to state GDP.
  • Grants are conditional rather than flexible, forcing cities to follow central guidelines rather than local priorities.
• Mirroring the Centre at the State Level:
  • State budgets copy central schemes rather than innovating based on regional needs.
  • Results in inefficient allocation, leading to either underutilisation or misutilisation of funds.

Case for Decentralisation: Need for a Tailored Approach

• Regional Variations in Urbanisation:
  • Kerala: Rural-urban continuum; Chief Minister called the state a “single city.”
  • Gujarat: Industry-driven urbanisation with economic segregation.
  • Southern vs. Northern States: Labour migration shifting demographic patterns.
• Sectoral Diversity in Urban Needs:
  • Some cities may have adequate housing but lack sanitation infrastructure.
  • Others may need decentralised sanitation over centrally determined models.
  • PMAY and SBM fail to address city-specific variations in requirements.
• Failures of a One-Size-Fits-All Approach:
  • Smart Cities Mission faced fund underutilisation or unplanned spending.
  • Pressure to submit Utilisation Certificates (UCs) led to rushed, low-impact projects.
  • Many projects had no demand from citizens, leading to wasted resources.

Alternative Approach: A Localised Fiscal Model

• Suggested Budgetary Reform:
  • 70% of Union Budget should be transferred directly to States and urban local bodies.
  • 30% of funds should be centrally managed for national priorities like climate resilience.
• Direct Transfers with Local Priority Setting:
  • Funds should be allocated based on localdemands in:
    • Mobility
    • Sanitation
    • Housing
    • Water supply
    • Waste management
  • Local governments should set their own agendas with support from States.
• Knowledge-Based Urban Planning:
  • Local decision-making should be supported by State Finance Commissions and urban research agencies.
  • National government’s role should be limited to guidance and support, not micro-management.

Broader Implications of Decentralisation

• Strengthening Local Governance:
  • City governments can act as the direct link between people and the state.
  • Enhances tax compliance, conflict resolution, and service delivery at the city level.
• Preventing Infrastructure Collapse:
  • Unplanned urban expansion without localised planning leads to:
    • Congestion
    • Strained public utilities
    • Poor quality of life
• Aligning with India’s Democratic Ethos:
  • India’s pluralism requires context-sensitive policies.
  • Decentralisation ensures governance reflects local aspirations.

Conclusion: Moving Towards a Localised Urban Future

• Centrally driven urban policies must shift towards devolution and flexibility.
• Local urban bodies need greater financial and administrative autonomy.
• A fiscal realignment with 70% direct transfers to State and local bodies is necessary.
• The success of urbanisation depends on empowering cities to shape their own development rather than following rigid central directives.