Urbanization

Overview of the Amrut Scheme

Context: The AMRUT (Atal Mission for Rejuvenation and Urban Transformation) scheme was a flagship programme launched by the NDA-1 government in June 2015, with its 2.0 version launched on October 1, 2021.

What is Amrut scheme?

The Mission covers covering 500 cities that includes all cities and towns with a population of over one lakh with notified Municipalities.
The major project components are Water Supply system, Sewerage, Septage, Storm Water Drainage, Urban Transport, Green Space and Parks, Reforms management and support, Capacity building etc.
It is being operated as Central Sponsored Scheme. The project fund is divided among States/UTs in an equitable formula in which 50:50 weightage. It is being given to the urban population of each State/UT and number of statutory towns.

(AMRUT) 2.0 scheme, has been launched on 01 October, 2021 for the period of 05 years i.e. from the financial year 2021-22 to the financial year 2025-26.
It is designed to provide universal coverage of water supply through functional taps to all households in all the statutory towns in the country and coverage of sewerage/septage management in 500 cities covered in first phase of the AMRUT scheme.
AMRUT 2.0 will promote circular economy of water.
Other components of AMRUT 2.0 are:
- Pey Jal Survekshan to ascertain equitable distribution of water, reuse of wastewater, mapping of water bodies and promote healthy competition among the cities /towns.
- Technology Sub-Mission for water to leverage latest global technologies in the field of water.
- Information, Education and Communication (IEC) campaign to spread awareness among masses about conservation of water.

What is the present status?

The project has a very slow implementation with less than 50% execution completed in most states.
It is estimated that about 2,00,000 people die every year due to inadequate water, sanitation and hygiene.
The disease burden due to unsafe water and sanitation per person is 40 times higher in India than in China.
The 150 reservoirs monitored by the central government, which supplies water for drinking and irrigation, and are the country’s key source of hydro-electricity, were filled to just 40% of its capacity a few weeks ago.
Around 21 major cities are going to run out of ground water.
In a NITI Aayog report it was stated that 40% of India’s population will have no access to drinking water by 2030. Nearly 31% of urban Indian households do not have piped water; 67.3% are not connected to a piped sewerage discharge system; and average water supply per person in urban India is 69.25 liters/day, whereas the required amount is 135 liters.

What went wrong? (Critical analysis of AMRUT)

Not holistic approach - Instead of a holistic approach, it took on a project-oriented attitude.
Lack of city participation - AMRUT was made for cities with no participation from the cities. It was quite mechanical in design, with hardly any organic participation of the elected city governments, and driven by mostly private interests.
Bureaucratic nature - The project was owned by bureaucrats, parastatals, and large technology-based companies. For example, in the governance architecture, the apex committee is headed by the secretary of the Ministry of Housing and Urban Affairs (MOHUA) and all the members are non-elected. Similarly, the State level high powered committee is headed by the chief secretary with a private nexus of consultants and professionals. Peoples’ representatives are completely missing, in violation of the 74th constitutional amendment.
Changes in climate and rainfall pattern are not taken into account while planning for water management in cities.
Since the drivers are large private players and builders, real estate development has become a proxy for urban planning — disappearance of water bodies and lakes, disrupted storm water flows, and absence of storm water drainage is very common.
Some other reasons for the delay could be lack of political will, given that some states like Bihar have not even realised their second instalment of funds towards the projects, concentration on other projects, overburden, corruption and rise in construction cost

What can be a way ahead?

Sustainable development of cities must be the core idea. Issues like air, water and soil pollution, housing, tourism, real estate, employment etc must be considered.
Urban local bodies, elected representatives and common city people must also be taken into account.
Research and innovation must be done in order to understand the changes in rainfall pattern. Wetland conservation, river front development, aquifer recharge, water harvesting must be done.
Digital solutions to address the issues of corruption, monitoring funds transfer and utilization must be designed.

Urban Infrastructure Development Fund (UIDF)

Context: In the budget FY 2023-24, Union Finance Minister declared the creation of a new fund called Urban Infrastructure Development Fund (UIDF) established through Priority Sector Lending shortfall. The proceeds of the UIDF were to be used by public agencies to create urban infrastructure in Tier 2 & Tier 3 cities.

About Urban Infrastructure Development Fund (UIDF)

UIDF is managed by National Housing Bank and loans will be sanctioned by NHB to States.
Normative allocation of funds to respective states/UTs will be based on population of eligible cities of each states/UT. State wise allocation of corpus shall be based on urban population in the cities as per latest census data (Census 2011) as:

Borrowings under UIDF shall be governed by Article 293(3) of Indian Constitution. Hence, Finance Department of respective States shall be nodal agency for all activities under UIDF.
States shall endeavour to utilise minimum 5% of allocated corpus for projects generating user charges or revenue sufficient to at least meet their O&M expenditure.

Objective of UIDF

Supplement efforts of State Governments/UTs for urban infrastructure development work implemented through Public/State Agencies, Municipal Corporations, Urban Local Bodies in Tier 2 and Tier 3 cities by providing a stable and predictable source of financing.
Address the problem of skewed regional development.
Allows for pooling of resources and expertise, enabling creation of comprehensive infrastructure solutions that addresses the unique needs of each urban area.
Stable and predictable source of finance under UIDF will allow holistic planning by States to create Future Ready Tier 2 and Tier 3 cities leading to drive economic growth in the years ahead.

Target Cities of UIDF

UIDF will focus on cities/Urban local bodies in the population group of 50,000 and 9,99,999 as per latest census data, covering about 40% of urban population.
- Tier 2 cities: 459 towns with population between 1 lakh to 9,99,999 as per latest census data.
- Tier 3 cities: 580 towns with population between 50,000 and 99,999 as per latest census data.
UIDF would focus on mid-sized cities with the potential to develop them into regional economic hubs (Metropolitan and mega cities are outside the scope of UIDF).

Eligible Activities under UIDF

Eligible activities for UIDF will be aligned to missions and programs of Ministry of Housing and Urban Affairs.

List of eligible activities under UIDF are:

Water Supply & Sanitation (new/augmentation/rehabilitation)
Construction of drains & storm water drains
Sewerage network and sewage treatment plants
Comprehensive projects of pay and use toilets, operated and managed by private sector.
Solid Waste Management (new/augmentation)
Construction of roads (excluding maintenance works) with provision of all utilities to be taken through an underground conduit, over bridges, grade separators, underpasses
Local area plan for decongestion
Electric/gas crematorium
Comprehensive area development programs:
- Local area plan for decongestion
- Heritage conservation
- Transit oriented development for creating dense, mixed-use developments near public transportation.
- Town planning schemes for greenfield development
- Parks with open Gym not involving major construction work.
Note: Proceeds from UIDF will not be used for maintenance works or for administrative/establishment expenses.

Terms & Conditions

Eligible Loan Amount for financing under UIDF will be based on size of project and geographical location of the project. Percentage of project cost that can be considered for various projects are as follows: (Minimum loan amount Rs. 5 crore (1 crore for North East and Hilly States) and Maximum loan amount Rs. 100 crores).

Size of project	Other than NE & Hilly States	NE & Hilly States
5 - 10 crores (1 - 10 for Northeast & Hilly States	90%	95%
10 - 50 crores	85%	90%
50 - 100 crores	75%	85%

Clubbing of projects: State Governments may club small sized project in single Detailed Project Report (DPR).
Rate of Interest: Interest rate on deposits placed by banks and loans under UIDF shall be decided by RBI. Lending rate on UIDF loan is linked to Bank Rate prevailing at the time of deposit of funds by banks i.e., Bank Rate minus 1.5%.

Master Plan for Urban Areas

Context: India’s G20 Sherpa, stressed at a recent Urban-20 City Sherpas’ meet that a master plan is crucial for any city to manage urbanisation.

About Master Planning

It is an instrument of governance for urban local bodies (ULBs).
It is a statutory plan document, prepared for stream-lining the land use within the delineated planning area.
It is a long-term plan that provides a conceptual layout for future urban growth and development.
It includes analysis, recommendations, and proposals for a site’s population, economy, housing, transportation, community facilities, and land use.
It is based on public input, surveys, planning initiatives, existing development, physical characteristics, and social and economic conditions.
The validity of a Master Plan is for a specific period and after the expiry of the period it needs revision and modifications.
During the 11th Five-Year Plan, it was proposed to prepare Master Plan for priority towns and growth centers.
Recently, most States/UTs have revised their respective bye-laws based on the Model Building Bye Laws 2016 (MoHUA, 2016). It is imperative that the city governments adapt the model regulations and as per their context and economic growth drivers.
The powers to prepare master plans remain with State governments.

Significance of Master Planning

Growth & development of the city: It helps ULBs in achieving integrated development by considering various aspects such as land use, transportation, infrastructure, housing, environment, and social amenities.
Efficient land utilisation: It enables efficient land utilisation by identifying suitable areas for different purposes, and preventing haphazard development.
Infrastructure planning: It assists ULBs in identifying the infrastructure requirements of the city or town, such as roads, water supply, sewage systems, etc. to support the growing needs of the population and economic activities.
Environmental Sustainability: It incorporates environmental considerations and sustainability principles into the development process to foster a greener and more resilient urban landscape.
Disaster Resilience: It helps ULBs in incorporating measures to enhance the resilience of cities and towns to natural disasters, such as floods, earthquakes, and cyclones by identifying vulnerable areas, designing appropriate infrastructure, and implementing disaster risk reduction strategies.
Social equity: It takes into account the social aspects of urban development for the economically disadvantaged, provision of basic services to marginalized communities, and accessibility for people with disabilities to create inclusive cities where all residents have access to essential services and opportunities.

Challenges

Rapid Urbanisation: Many cities and towns are experiencing rapid population growth and urbanization, which can strain existing infrastructure and resources. Managing this rapid growth and ensuring that the master plan can accommodate future needs is a significant challenge.
Limited Resources: ULBs often face financial and resource constraints, making it challenging to implement comprehensive master plans.
Inconsistencies in decision-making: Frequent changes in political leadership, lack of continuity in governance, and bureaucratic challenges can hinder the execution of the master plan and result in inconsistencies in decision-making.
Data and Information Management: Limited capacity for data collection, data quality issues, and inadequate technology infrastructure can hinder the planning process.
Informal Settlements and Slums: Integrating these areas into the master plan and providing adequate housing, basic services, and infrastructure to these marginalized communities can be a complex and challenging task.
Environmental Concerns: Balancing urban development with environmental sustainability is a critical challenge.
Implementation and Monitoring: Monitoring progress, assessing the impact of implemented projects, and adapting the plan as needed are important but often challenging tasks due to limited capacity, coordination issues, and institutional barriers as per the NITI Aayog Report 2021.
No statutory backing: Some city governments lack much authority while some city administrations have developed mitigation plans without statutory backing. For example Bengaluru has not had a master plan to control its development and the Mumbai plan lacks any statutory backing and does not prescribe any regulatory controls.
Urban Planning: It is the State subject and as per the 12^thschedule of the Constitution and the function of Urban Local Bodies / Urban Development Authorities but the state government has powers to prepare master plans.

Way forward

The Ministry of Housing and Urban Affairs has recommended that master plans in cities should be revisited for the improved governance of cities. The National Mission for Clean Ganga has been advocating such a step to protect urban water bodies.
Many plans to improve sanitation, infrastructure, and social inclusion are dependent on particular programmes, but these are at best ephemeral and incremental as they are centrally funded.
It is simply a spatial plan of land-use allocation supported by bye-laws and development control regulations. Thus, it essentially embodies a spatial vision for cities.
The era of planetary urbanisation brings spatial planning into sharp focus, and calls for reimaging the spatial planning framework in India.
Recent moves such as Gati Shakti and Model Rural Transformation Acts are a reflection of this growing demand. The Centre must work with the States to reconsider the spatial planning framework in India.

The Advisory Committee of Niti Aayog recommends a National Council of Town and Country Planners to be constituted as a statutory body of the Government of India.

Rural Urban Dichotomy

The different nature of rural and urban spaces in the country, ranging on all different dimensions including governance, environment, education, health, infrastructure and development, is the rural-urban dichotomy in principle. It is economic, cultural, social, historical and well as political in nature.

Reasons for Rural-Urban dichotomy

Economically

Lack of formal credit institutions in rural areas makes it difficult to invest in capital formation.
- Lack of industrialisation
- High seasonal and disguised unemployment
- Failing APMC regime
- Concentration of capital in cities
- Occupational mobility is higher in urban areas
- Booming startup culture in urban areas

Social reasons

Rural Indian society tends to be more patriarchal than urban setup
- Caste discrimination more rampant in rural areas
- Girls’ education upto a limited extent in rural areas
- Urban areas tend to modernise on lines with western culture more frequently
- Liberal values are promoted in urban settings compared to rural areas

Historical reasons

Old cities were establishments of kings, ministers and nobles in medieval times and residences of rich traders, aristocrats and British officers in modern times
- Urban areas were nodal points of trading and big marketplaces

Need to reduce rural-urban dichotomy

Reducing this dichotomy will result in a ‘rural-urban continuum’ which means the less and almost negligible difference between rural and urban areas. An example is Kerala which has had a high level of this continuum for many years.

It would lead to infrastructural development in rural areas.
- Physical infrastructure will get a boost by integrating rural areas with value supply chains and freight corridors. The Sagarmala project, National Waterways project and Golden Quadrilateral have the potential to bring regions into the mainstream.
- For financial infrastructure, digital banking needs to be pushed in rural areas, along with penetration of POS and ATMs at the grassroots level.

There are 3 crore houses required in rural areas and 1.2 crore houses required in urban areas. Schemes like PM Aawas Yojana and Affordable Rental Housing Complexes (ARHC) have given a push in this regard.
India’s expenditure on healthcare is just 2.1% of GDP (2021-22 Union Budget). To improve this in both rural and urban areas, PM Jan Arogya Yojana, National Rural/Urban Health Mission, and Rashtriya Bal Swasth Karyakram is underway.
Literacy rate in urban areas is 87.7% while that of rural areas is 73.5%. To fill this gap, education is promoted through Mid-Day Meal Scheme, Sarva Shiksha Abhiyan and PM Schools for Rising India (PM-SHRI).
It will result in economic freedom of the rural population from the evil of informal credit and debt trap. For this RBI has unveiled the Payments Vision 2025 which would lead to better financial inclusion and participation. Centre has also announced a bank recapitalisation scheme by infusing Rs. 15000 Crore in weak PSUs.
It will result in a reduction of social evils like caste discrimination and dowry etc.
It will lead to a rise in political awareness among the population.

Challenges in achieving rural-urban continuum

Lack of infrastructure and investment in rural regions
Unwillingness of political leaders to bring about a social change
Failure in policy implementation at the rural level
Low number of dedicated schemes to achieve the continuum
Migration of rural population in cities makes the development of villages more challenging

Way forward

Achieving the rural-urban continuum must be one of the key points in policy-making, given the Amritkaal, the 17 SDGs and the global climate crisis. Striving for this continuum will result in multifaceted growth and fulfilment of multidimensional goals.

We must look forward to the German model – where villages are designated sub-sectors of production and services and trained for that, which results in internal as well as external consumption and acts as a capital expenditure multiplier.