Budgetary Allocation for Urban Development

General Studies Paper -3

Context: In 2025, the government allocated ₹96,777 crore for urban development, an increase from the previous year, but after adjusting for inflation, this marks a reduction.

Urbanization Growth

• India’s urbanisation is driven by economic distress, unlike the Global North where it followed industrialisation and colonial wealth transfer.
• India’s urbanisation is categorized as “poverty-driven urbanisation” with both rural-to-urban and urban-to-urban migration.
• The COVID-19 pandemic highlighted the inadequacies of urban planning, with reverse migration showing gaps in infrastructure.

Key Urban Challenges in India

• Lack of precise data on urban population (2021 Census missing); around 40% of India’s population is urban.
• Planning Issues: Spatial plans are outdated, causing overcrowding and slums.
  • Plans focus on capital growth rather than addressing people’s needs.
• Climate Change Impact: Pollution, urban flooding, and heat island effects severely affect cities, especially in Delhi’s NCR region.
• Governance Challenges: Despite the 74th Constitutional Amendment, urban planning in Indian cities is controlled by undemocratic bodies.
  • Cities receive a minimal 0.5% of GDP in intergovernmental transfers.

Initiatives

• Swachh Bharat Mission-Urban (SBM-U) 2.0 was launched on October 1st, 2021 for a period of five years with a vision of achieving safe sanitation and scientific processing of municipal solid waste in all cities.
• AMRUT 2.0 was launched on 1st October 2021 to make cities ‘self-reliant’ and ‘water secure’.
• The Smart Cities Mission was launched to enhance the quality of life in 100 selected cities by providing efficient services, robust infrastructure, and a sustainable environment.
• The Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0 aims to construct 1 crore houses for urban poor and middle-class families over the next five years, with an investment of ₹10 lakh crore and a government subsidy of ₹30 lakh crore.
• Street Vending Plans: Development of 100 weekly ‘haats’ or street food hubs in select cities.
  • States encouraged to create street-vending plans for more hubs as per local needs

Suggestions and Way Forward

• The progress has been made towards Sustainable Development Goals (SDGs) but still urban areas struggle with poverty, inequality, and environmental degradation.
• The challenges faced by Indian cities call for comprehensive national interventions to improve urban planning, governance, and infrastructure.
• Urban development requires sustained investments, with cities being recognized as growth hubs.
• There is a need to focus on sustainable, low-rise, radial development over high-rise buildings to prevent urban sprawl and reduce carbon emissions.