Promise of Urban Renewal for Congested Cities

The results of the 2024 Lok Sabha polls showed an erosion in BJP’s support in urban centres like Mumbai, yet it was a strong showing in cities like Delhi and its adjuncts like Gurugram, Faridabad, Noida, Ghaziabad as well as major centres in most other states that shored up its numbers in the face of setbacks in Uttar Pradesh, Maharashtra and West Bengal. The Budget takes note of the support as well as its fragility by promising to develop cities as “growth hubs” and providing a policy framework and market-based mechanisms.

The Budget calls for the orderly development of peri-urban areas utilising town-planning schemes and puts redevelopment at the centre of its initiatives for existing cities. “For creative redevelopment of existing cities with a transformative impact, our government will formulate a framework of enabling policies, market-based mechanisms and regulations,” Union Finance Minister Nirmala Sitharaman, said in Lok Sabha on Tuesday, July 23.

The focus on urban planning and redevelopment is significant as cities are not bursting at the seams and do not have pathways to managing challenges of housing, public transport, pollution and widespread encroachment of public land. The main agencies are corporations and their efficiency varies from state to state and even within a particular state some are better than others. They have limited access to funds apart from devolution and are marked by inefficiency and corruption. While these issues played a smaller part in a national election, they will matter much more in state polls in Haryana and Maharashtra where BJP needs to up its game as it is the party in office.

Managing urban growth is a priority in any case as social unrest, poor health and sanitation and pollution take a toll of productivity and saddle government with additional costs. The Budget recognises the challenge, noting that “Transit Oriented Development plans for 14 large cities with a population above 30 lakh will be formulated, along with an implementation and financing strategy.” Such cities include Lucknow, Jaipur, Pune, Kanpur and Surat and the bigger ones are Kolkata, Chennai, Hyderabad, Chennai, Ahmedabad, Bengaluru besides Delhi and Mumbai.

The Budget pledges to provide a central subsidy of ₹2.2 lakh crore over five years to facilitates an investment of Rs 10 lakh crore for housing 1 lakh crore poor and middle class families. A provision for interest subsidy to provide affordable loans is also in the works. “[E]nabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place,” the finance minister said. This requires the Centre to work closely with states and the policies are likely to incentivise governments to improve urban governance to access central funds for redevelopment and modern transit.

The Budget takes aim at the pressing problem of sanitation, water supply and drainage in cities where flooding is aggravated due to haphazard development, congestion and encroachments. In Delhi, for example, the Yamuna flood plain is occupied by illegal settlements and commercial buildings that directly discharge waste into the river. Water supply, sewage treatment and solid-waste management plans for 100 large cities find mention. The Budget says this will be done in partnership with state governments and multilateral development banks and the projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas. These plans come not a day too soon for cities like Gurugram where mismanagement of solid waste has resulted in the declaration of a “solid waste exigency”.

States charging high stamp duty will be urged to reduce the rates and extend concessions for women and the Budget also promises to promote street markets or weekly haats along the lines of street food hubs in the light of the success of the PM SVAnidhi scheme.

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Rajeev Deshpande

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