The need for a localised urban agenda

(Source – The Hindu, International Edition – Page No. – 10)

The Role of the Central Government

• Urban development is a State subject, but the Centre has influenced urbanization through various centrally sponsored schemes.

• Housing and welfare programs, such as housing schemes and essential services initiatives, have significantly shaped city development.

• Infrastructure and mobility projects, especially metro rail, have been prioritized, consuming a large share of the budget.

• However, these centrally driven missions often take a top-down approach, leaving States with limited flexibility.

Why Does the Centre Control Urban Finances?

• Cities are seen as economic growth engines, making them crucial for national development.

• Infrastructure is considered essential for increasing India’s competitiveness and achieving economic goals.

• Budgetary transfers from the Centre, even when given as grants, come with conditions, limiting the autonomy of city governments.

• Successive finance commissions have imposed requirements, such as increasing property tax collection, to shape urban financial structures.

The Need for a Decentralized Approach

• Different States and regions experience urbanization differently due to factors like migration, economic activity, and demographics.

• A uniform approach does not work because cities have unique needs—some require better housing, while others may need improved sanitation or water supply.

• Current policies often impose solutions that do not align with local priorities.

Proposed Financial Devolution Model

• Around 70% of the Union Budget should be directly transferred to States and city governments, with only 30% allocated for national priorities.

• Cities should have the authority to decide their own spending priorities in key areas such as mobility, sanitation, housing, and water.

• This approach would prevent inefficient spending and ensure funds are used where they are needed most.

The Importance of Local Governance in Urban Development

• National governments should focus on broader policy areas, while local governments should handle urban management.

• Centrally controlled missions often fail to address the real needs of citizens, leading to unused funds or poorly planned infrastructure.

• Strengthening city governments can create a stronger link between the government and the people, improving tax collection and conflict resolution.

Conclusion

• A fundamental shift is needed in how urban development is planned and funded.

• Decentralization can help address the challenges of rapid urbanization while maintaining India’s diverse urban landscape.

• Empowering city governments will lead to better urban planning, improved infrastructure, and a more sustainable future for India’s cities.