Event Report
Shivashish Narayan
The IMPRI Center for Habitat, Urban and Regional Studies (CHURS), IMPRI, Impact and Policy Research Institute, New Delhi, hosted an interactive panel discussion on the topic “Cities, Local Governance, and Union Budget 2024-25” on July 26, 2024 at 6:30 p.m. IST, under IMPRI 5th Annual Series of Thematic Deliberations and Analysis of Interim Union Budget 2024-25.
The panel featured a distinguished lineup of experts. The Chair for the event was Dr. Rumi Aijaz, Senior Fellow and Head of the Urban Policy Research Initiative at the Observer Research Foundation (ORF), New Delhi. The Moderator was Dr Soumyadip Chattopadhyay, Visiting Senior Fellow at IMPRI and Associate Professor in the Department of Economics and Politics at Visva Bharati University. The panellists included Prof. Chetan Vaidya, Prof. Vishwa Nath Alok, Prof. Mahalaya Chatterjee, Prof. Tathagata Chatterji, Mr Sameer Unhale, Dr. Mathew Idiculla, and Mr. Tikender Singh Panwar. Each expert brought unique insights and perspectives, enriching the discussion with in-depth analyses and forward-looking views.
The chair for the session is Dr Rumi Aijaz, Senior Fellow and Head, of Urban Policy Research Initiative, Observer Research Foundation (ORF), New Delhi. expressed optimism about the 2024-25 budget significantly increasing allocations for Urban Development under the Ministry of Housing and Urban Affairs. While the interim budget focused on groups such as women, farmers, and youth, this final budget prioritizes employment skilling, MSMEs, and the middle class. Key highlights include the development of cities as growth hubs, enhanced economic and transit planning and brownfield redevelopment. Significant efforts are directed toward housing with plans for one crore new houses and rental housing for migrants as well as water supply and sanitation projects in 100 cities. New initiatives such as the CITIIS program, the National Urban Digital Mission and a push for electric mobility are included, with a 19% increase in allocations for the Ministry. Measures like reduced stamp duties, rooftop solar panels and flood control reflect a proactive approach to urban development and climate adaptation.
Prof Chetan Vaidya, Visiting Distinguished Professor, IMPRI; Independent Urban Advisor; Former Director, School of Planning and Architecture (SPA), New Delhi and National Institute of Urban Affairs (NIUA), New Delhi; Independent Director, GIFT City, Gandhinagar
Prof. Vaidya acknowledged the Finance Minister’s prioritization of urban development alongside productivity, employment, and innovation in the budget. He highlighted the Pradhan Mantri Awas Yojana 2.0 as a key initiative for improving housing and developing rental markets but stressed the need for better policies supporting rental housing for industrial workers and community-based slum improvement programs. He called for a clearer framework for Public-Private Partnerships (PPPs) and improved revenue generation through property tax reforms. While he appreciated the focus on water supply, waste management and transit-oriented development, he expressed concerns about the sustainability of metro systems and advocated for Bus Rapid Transit Systems (BRTS). He praised the reduction in stamp duties for women and support for street markets but criticized the lack of inclusive development and funding cuts for the National Urban Livelihood Mission. He concluded by calling for enhanced support for urban local bodies, better data management and a shift from project-based to program-based approaches advocating for a comprehensive national urban development policy integrating state and city-level strategies.
Prof Mahalaya Chatterjee, Professor, Centre for Urban Economic Studies, Department of Economics, University of Calcutta; Visiting Professor, IMPRI explored the shifting focus in urban development from the Planning Commission’s Five-Year Plans to an annual budget system post-2014, highlighting the recent budget’s emphasis on urban development over rural areas. She introduced new initiatives like the PM Awas Yojana for affordable housing and transit-oriented development but expressed concerns about the potential loss of historical character due to “creative redevelopment.” Prof. Chatterjee also noted the neglect of small and medium towns, which could worsen urban issues in larger cities and the complications arising from the lack of 2011 census data. She advocated for a comprehensive urban policy that balances development across all areas and emphasized the need for genuine gender empowerment in property ownership calling for an inclusive approach to urban development.
Prof Vishwa Nath Alok, Professor of Public Finance, Indian Institute of Public Administration (IIPA), New Delhi examined the recent Union budget’s impact on cities, local governance, and the broader economic landscape, He highlighted the budget’s focus on employment, addressing the challenge of rising unemployment amid global economic pressures and higher interest rates. Prof. Alok discussed the significant role of local governments and the increased 25% allocation for urban local bodies but also pointed out challenges such as municipalities’ limited revenue generation capacity and reliance on state transfers. Despite increased funding for urban bodies and the Ministry of Housing and Urban Affairs, he expressed underutilization of funds for urban livelihoods under schemes and emphasized the need for a balanced focus on both physical and social infrastructure, advocating for improved coordination among all levels of government to address urban challenges effectively.
Mr Tikender Singh Panwar, Former Deputy Mayor, Shimla; Senior Fellow, IMPR critiqued the budget by highlighting its shortcomings in addressing key issues such as unemployment, inflation and rural-urban migration. He expressed disappointment with the budget’s inadequate response to rising unemployment and food inflation, criticized its flawed approach to urbanization based on Western models, and noted insufficient measures to address job losses and income inequality. He also pointed out the budget’s limited allocation to critical social sectors and reliance on non-tax revenue sources. He emphasized deficiencies in urban governance, particularly regarding localized solutions and waste management and used Shillong as a case study to argue for context-specific governance. He concluded that the budget failed to address fundamental problems and advocated for a more democratic and localized approach to tackle India’s economic and urban challenges.
Prof Tathagata Chatterji, Professor of Urban Management and Governance, Xavier University, Bhubaneswar commended the growing focus on urban issues in recent budgets, highlighting cities as crucial economic growth engines. He stressed the need for careful planning in Brownfield regeneration to avoid real estate exploitation and displacement. He also emphasized the importance of considering the needs of informal sector workers, such as street vendors, in initiatives like “food streets.” While praising the budget’s focus on transit-oriented development and metro rail projects he expressed concerns about their financial viability. He urged more attention to environmental challenges and a shift from project-based approaches to comprehensive city and state-level planning advocating for greater city empowerment and effective central government support.
Dr Mathew Idiculla, Legal and Policy Consultant; Visiting Faculty, National Law School of India University, Bangalore addressed key aspects of the budget related to urban development, noting a 16% increase in funding but questioning the specifics of its implementation and beneficiaries. He criticized the budget for not addressing unemployment directly and highlighted the significant reduction in smart city funding, suggesting a potential shift in government strategy. He raised concerns about new urban planning initiatives, like industrial parks and town planning schemes, expressing doubts about their effectiveness and required institutional mechanisms. While recognizing some positive measures, such as support for street vendors he emphasized the need for clearer strategies to tackle unemployment and effective stakeholder collaboration for successful outcomes.
Dr Soumyadip Chattpodhyay, Visiting Senior Fellow, IMPRI; Associate Professor, Department of Economics and Politics, Visva Bharati University acknowledged the insightful discussions and emphasized that while budgets may not immediately resolve complex urban issues, they should guide future policies. He expressed concerns about the Pradhan Mantri Awas Yojana (PMAY), noting that despite its significant allocation, its impact on affordable housing and slum redevelopment remains doubtful. He criticized new initiatives like rental housing for industrial workers, citing past failures and questioning their practical utility. He also raised issues with the shift from smart city projects to metro-centric initiatives and the feasibility of urban infrastructure projects under current revenue models, stressing the importance of accurate data for assessing urban challenges and budget effectiveness.
Mr Sameer Unhale, Visiting Senior Fellow, IMPRI; Urban Expert expressed appreciation for the discussion on urban development and local governance, emphasizing the constitutional context of urban issues as a state jurisdiction with substantial Union Government funding. He suggested that moving urban issues to the concurrent list could enhance Union involvement. He clarified that the reduced funding for the Smart City Mission was due to its completion. He praised the budget’s focus on land use planning, industrial parks, rental housing and digital infrastructure. While also noting its recognition of climate change challenges. He concluded by advocating for a comprehensive view of financial allocations from all government levels and the importance of continued dialogue to effectively address urban challenges.
Conclusion
The panellists concluded by expressing appreciation for the engaging discussion on urban development and local governance and addressing concerns about the disconnect between high taxes paid by citizens and the quality of local infrastructure. They noted that only a small fraction of total taxes directly reach municipal bodies, with most funding coming through grants and allocations, emphasizing the need for modern tools and improved local management. The panel underscored that urban development is primarily a state responsibility, with the central government offering supportive schemes and incentives. They advocated for integrating non-tax revenues and modern technologies into urban management and called for continued dialogue and collaboration to enhance urban governance and infrastructure development.
