India's Urban Challenges

Urbanization is not a side effect of economic growth; it is an integral part of the process.  As in most countries, India’s urban areas make a major contribution to the country’s economy. Although less than 1/3 of India’s people live in cities and towns, these areas generate over 2/3 of the country’s GDP and account for 90% of government revenues.

India’s towns and cities have expanded rapidly as increasing numbers migrate to towns and cities in search of economic opportunity. Slums now account for 1/4 of all urban housing. In Mumbai, more than half the population lives in slums, many of which are situated near employment centers in the heart of town, unlike in most other cities in developing countries.

Meeting the needs of India’s soaring urban populations is and will continue to be a strategic policy matter. Critical issues that need to be addressed are:

· Poor local governance

· Weak finances

· Inappropriate planning that leads to high costs of housing  and office space; in some Indian cities costs are among the highest in the world   

· Critical infrastructure shortages and major service deficiencies that include erratic water and power supply, and woefully inadequate transportation systems

· Rapidly deteriorating environment

• Many urban governments lack a modern planning framework
• The multiplicity of local bodies obstructs efficient planning and land use
• Rigid master plans and restrictive zoning regulations limit the land available for building, constricting cities’ abilities to grow in accordance with changing needs.

Housing:

• Building regulations that limit urban density - such as floor space indexes – reduce the number of houses available, thereby pushing up property prices
• Outdated rent control regulations reduce the number of houses available on rent – a critical option for the poor
• Poor access to micro finance and mortgage finance limit the ability of low income groups to buy or improve their homes
• Policy, planning, and regulation deficiencies lead to a proliferation of slums
• Weak finances of urban local bodies and service providers leave them unable to expand the trunk infrastructure that housing developers need to develop new sites.

Service delivery:

• Most services are delivered by city governments with unclear lines of accountability
• There is a strong bias towards adding physical infrastructure rather than providing financially and environmentally sustainable services
• Service providers are unable to recover operations and maintenance costs and depend on the government for finance
• Independent regulatory authorities that set tariffs, decide on subsidies, and enforce service quality are generally absent.

Infrastructure:

• Most urban bodies do not generate the revenues needed to renew infrastructure, nor do they have the creditworthiness to access capital markets for funds
• Urban transport planning needs to be more holistic – there is a focus on moving vehicles rather than meeting the needs of the large numbers of people who walk or ride bicycles in India’s towns and cities.

Environment:

• The deteriorating urban environment is taking a toll on people’s health and productivity and diminishing their quality of life.

WORLD BANK SUPPORT

Publications, Research and Analysis:

The Impact of Policies to Control Motor Vehicle Emissions in Mumbai – Nov 2006

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The Mumbai Slum Sanitation Program: Partnering with slum communities for sustainable sanitation in a megalopolis – Sept 2006

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Improving Management of Municipal Solid Waste in India: Overview and Challenges – May 2006

 

What are Public Services Worth, and to Whom? Non-parametric estimation of capitalization in Pune – May 2006
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Connecting the Slums to Water Supply: A Utility’s Pro Poor Approach in Bangalore- Feb 2006

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The Welfare Effects of Slum Improvement Programs: The Case of Mumbai – Feb 2006
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Urban Water Supply and Sanitation - Bridging the Gap between Infrastructure and Service – Jan 2006

Governance in the Gullies: Democratic Responsiveness and Leadership in Delhi's Slums – Sept 2005

 

Urban Poverty and Transport: The Case of Mumbai – Sept 2005

Business Environment, Clustering, and Industry Location: Evidence from Indian Cities – August 2005
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For a Breath of Fresh Air: Ten Years of Progress and Challenges in Urban Air Quality Management in India, 1993-2002 – June 2005

 

Household Savings and Residential Mobility in Informal Settlements: The Case of Bhopal – May 2005

 

Urban Finance and Governance Review – Dec 2004

 

Measuring the Risk on Housing Investment in the Informal Sector: Theory and Evidence from Pune – Oct 2004

 

Urban Air Pollution in India: Perceptions of Stakeholders – (Newsletter) August 2004

 

What Is Causing Particulate Air Pollution? Evidence from Delhi, Kolkata, and Mumbai – August 2004

Holding the State To Account Through Citizen Report Cards In India –May 2004

 

Location and Welfare in Cities: Impacts of Policy Interventions on the Urban Poor – May 2004

PROJECTS

Active:

Karnataka Municipal Reform Project: Karnataka is one of India’s most rapidly urbanizing states; its capital city of Bangaloreis known as the Silicon Valley of India. Enormous growth in business opportunities, as well as rising urban populations and incomes has led to strong demand for better infrastructure and services.

Third Tamil Nadu Urban Development Project (TNUDP III) aims to help to improve civic services in the state.

 

Pipeline:

Andhra Pradesh Urban Reform & Municipal Services Project

Gujarat Urban Development Program

India: National Urban Infrastructure Fund

JNNURM Institutional Development and Capacity Building Program

 

Fast Facts Urbanization in India

Most Urbanized States: Tamil Nadu  43.9%; Maharashtra  42.4%; Gujarat  37.4%

3 out of world's 21 mega cities: Mumbai (19 mill); Delhi (15 mill); Kolkata (14 mill)

Large Cities: 23 in 1991; 40 in 2001

Urban Pop.: 25% of 850 mill in 1992; 28% of 1,030 mill in 2002.

Estimated Urban Pop. by 2017: 500 mill

% of Urban Residents who are Poor: About 25%

Slum Population:  About 41 million in 2001

Estimated Slum Pop. by 2017: 69 mill