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Budgetary Allocation for Urban Development

Last updated on February 10th, 2025 Posted on February 10, 2025 by NEXT IAS Current Affairs Team  538

Syllabus: GS 3/Economy 

In News

  • 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. 
Key Highlights of the Budget 
– Key schemes like the Pradhan Mantri Awas Yojana (PMAY) saw significant cuts, reflecting a gap between policy ambitions and actual spending.
– Transfers to Urban Local Bodies (ULBs) were reduced, and revenue loss due to GST has compounded the issue.
– Central Sector Schemes, especially for metro projects, received higher funding, but urban programs like Swachh Bharat Mission, and Smart Cities Mission faced cuts.
– The introduction of a ₹10,000 crore Urban Challenge Fund highlights a focus on capital-intensive infrastructure projects, with limited attention on sustainable development, employment generation, and social equity.

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  • Planning Issues: Spatial plans are outdated, causing overcrowding and slums.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 ₹2.30 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.

Source: TH

 
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