We Need To Talk About 'Viksit' Urban India For 'Viksit Bharat'

Although urban centres in India have been the engines of economic growth contributing to 63 per cent of the Gross Domestic Product (GDP), the municipal budgets required for its upkeep have been less than 1 per cent of its GDP for over a decade. 

Although the budget of the Ministry of Housing and Urban Affairs (MOHUA) that supports urban development has increased over 6 times from 2016 to 2025, it constitutes only 1.91 per cent of the Union Budget. 

A World Bank report in 2022 estimated urban centres in India require investments of USD 450 billion (Rs 39.15 lakh crore) for municipal services and USD 300 Billion (Rs 26.1 Lakh Crore) for mass transit by 2036 to manage the needs of a rapidly growing population. This large financing need of almost 1.3 times the Union Budget of FY 2025-26 cannot be fulfilled by mere fiscal expenditure.

The Union Budget 2025 has recognised urban development requires transformative reforms to augment the country’s growth potential and global competitiveness. Therefore, it announced an urban challenge fund with a total outlay of Rs 1 lakh crore of which 10 per cent is allocated for FY25-26. 

Unlike the earlier urban development programmes which were completely dependent on fiscal expenditure such as Jawaharlal Nehru National Urban Renewal Mission (JnNURM), the project requires raising 50 per cent of funds from banks, bonds, or through private participation and will receive 25 per cent support from the challenge fund. This structure should enable better accountability and project management. 

The JnNURM, often revered as the first reform-linked urban policy, was a comprehensive urban infrastructure upgradation programme with a total outlay of Rs 1.2 lakh Crore (approximately USD 20 billion)5 for select cities. However, most cities were unable to capitalise on the investments, as the returns from the projects were inadequate to sustain their maintenance due to poor management. 

The infrastructure created had a limited impact as the cities grew. Hence, the Smart Cities mission initiated afterward focussed on fostering competition and a performance-based approach by selecting cities that were inclined to transform by proposing innovative projects and approaches.

MoHUA also conducted theme-based challenges such as ‘Cycle4change’, ‘Streets4people’, and ‘Transport4all’ to curate and envision projects for sustainable urban development with a motive to improve health, mobility, air quality, and liveability parameters in cities.

The 100 smart cities selected over five years were based on their project proposals, planning, and impact they intend to create. 

The urban local bodies were to create a subsidiary exclusively to manage the projects seamlessly for which up to Rs 500 crore over five years were devolved. 

The smart cities have accomplished building 1700 km of smart roads, deploying over 23,000 shared bicycles and 1500 plus buses, creating 2,000+ bus stops, and commissioning an Intelligent Transit Management system in 35 cities.

A total of Rs 45,215.27 crores was disbursed until 2023-24. Similarly, Atal Mission for Rejuvenation and Urban Transformation (AMRUT 1.0 and 2.0) has invested Rs 48,353.96 in water, sanitation, non-motorised infrastructure, and enhancing the public realm across 500 cities over the last nine years. The projects initiated under the mission were aspirational and were curated towards sustainable development goals and public private partnerships.

Between 2018-19 and 2023-24, over Rs 1 lakh Crore was invested in metro infrastructure and Rs 9266.65 crores was disbursed for Namo Bharat connecting the National Capital Region. Over 5,000 electric buses have been augmented under the Faster Adoption and Manufacturing of Electric Vehicle (FAME 1&2) subsidy scheme, and another 38,000 electric bus services will be supported under PM-eBus Sewa from FY 2024-25 to FY 2028-29 with an outlay of Rs 3,435.33 crores as a viability gap fund.

All electric buses procured under FAME-2, smart cities mission, and PM-eBus Sewa scheme are through public-private partnerships.

Despite progressive urban development programs, most cities are in a state of despair as the infrastructure remains inadequate and liveability rapidly deteriorates. While the prolonged exposure to poor air quality in Mumbai and Delhi is impacting the health, Bengaluru, Pune, and now Kolkata featuring among the top five congested cities globally as per the Tomtom Index.

These cities are homes to some of the richest and most powerful people and yet its appalling conditions are a reflection of poor planning and insurmountable pressure of growing population and its needs.

The last decade has been a long-running climate alarm bell as cities experienced severe heat stress, incessant rains followed by flash floods, and water crises as the administration desperately tried to snooze it with temporary relief. Concentrated efforts are required to create projects that are resilient to change and have the potential to deliver long-term impact.

The Urban Challenge Fund can empower cities to prioritise investments in such projects that are financially viable, environmentally sustainable, and technologically advanced. The missions and challenges are crucial for projects that can transform urban infrastructure and therefore unlock investment potential and public good in cities.

Although it may seem paltry, compared to the World Bank estimates, the government is making recurring investments in urban infrastructure under different missions and schemes to improve liveability in cities.

The 15th Finance Commission has allocated Rs 16,579 crores between 2020-21 to 2025-26 for 42 million plus cities for performance-based grants to improve air quality and support the implementation of City Specific Action Plans.

Convergence of resources under schemes to reduce waste by converting it into bio gas and compost as envisaged under Swachh Bharat Mission and Sustainable Alternative Towards Affordable Trasportation (SATAT) also have a significant impact on the air quality. Although several interventions and projects from cleaning water bodies to reviving public spaces, are being undertaken, the pace of transformation needs to urgently increase as the sands of time are running low.

Cities need to urgently reform their habits, and perform efficiently to transform and shape its form sustainably to remain a beacon of hope to build a Viksit Bharat. Collective action and rational decision-making are required to enable creation of wealth, health and livelihood in cities.

The lessons from the COVID pandemic should be refreshed to shape the future projects rationally and sustainably and to collectively build timeless cities of tomorrow.

Roshan Toshniwal is an architect and urban planner by training and has over 15 years of experience in urban planning, mobility and development sector.