Our Cities Made Boondocks
The Budget ignores urban India, where 2/3rd of India’s GDP is generated
Given the events including demonetisation leading up to the Budget, this Budget was disappointing. While it contains some elements of reform — being presented early to enable the fuller utilisation of outlays, the merging of the Railway with the general Budget, and the doing away of the distinction between Plan and non-Plan expenditure — the Budget is disappointing as it holds very little for urban India, where more than twothirds of India’s GDP is generated.
The finance minister himself acknowledged in the Budget speech that “India has become the sixth-largest manufacturing country in the world, up from ninth previously. We are seen as an engine of global growth.” And in this very context, it is urban India that is home to the country’s manufacturing — and services — industry, given the definition of urban areas by the Census hinges on the share of non-agricultural employment.
Themessuchasthepoor,theunderprivileged, infrastructure and public services that the Budget has proposed to focus upon, also encompass the urban poor. Urban poverty is more challenging than rural poverty, given the urban poor have the threat of food security, social exclusion, and economic and physical vulnerability (threat of eviction, lack of ‘legal’ status of housing and amenities, which local governments don’t find decent enough to regularise).
Without the urban poor, who cont- ribute significantly to the city economy as workers, drivers, maids and cooks, substantial parts of the urban economy would come to a standstill.
The government also claims to “have moved from [an] informal economy to [a] formal economy”. But the urban informal sector continues to be neglected. One thing Budget1991and reforms changed was the licence raj as it applied to the corporate sector.
But more than 25 years later, the urban informal sector consisting of street vendors and poor workers is plagued by an equally, if not more, cumbersome licence raj, and continues to be under the threat of eviction, without a sustainable livelihood.
There is now a national policy on street vendors. But the conditions of these informal sector workers have not perceptibly changed.
House of Tax
Yet another basic element that impacts the urban poor is the lack of affordable housing and access to amenities.
As per the Budget, the profit-linked income-tax exemption for promoters of affordable housing with a 30 sq m limit will apply only to the four metropolitan cities. In the rest of the country, including peripheral areas of four metros, the limit of 60 sq m will apply.
In India, policies for tackling affordable housing are typically in the nature of supply-side initiatives, although this category is too neat to describe the actual interventions. Such policies treat only the symptoms, not the underlying causes of the malady. Attempts by policymakers to fix problems with housing affordability may be futile, unless the underlying causes of the housing scarcity — excessively restrictive land-use regulations — are addressed.
Further, there is also the regulatory issue of licensing and permits required at every stage, which developers have to face in the development B R V Shanbhag
With cities becoming unlivable, we need to develop villages and small urban areas and make them attractive so that the people stop migrating to the cities. The government shouldn’t burden the big urban conglomerations further.
Chandrasekaran Krishnamurthy of housing projects.
The cost of these end up being passed to the end user — the homebuyer — thereby questioning all assumptions of affordability.
The only initiatives for urban India in this Budget are that the ministry of housing and urban poverty alleviation (MoHUPA) outlay increased from .₹ 5,285 crore (revised in 2016-17) to .₹ 6,406 crore in the current Budget, and that of the ministry of urban development (MoUD) increased from .₹ 32,550 crore to .₹ 34,212 crore.
For the MoUD’s Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities, the Budget allocation has actually decreased to .₹ 9,000 crore from .₹ 9,559 crore in 2016-17. Some time ago, the MoHUPA anchored a large project, Support to Policies for Urban Poverty Reduction. This resulted in an Oxford University Press volume on the state of the urban poor, which documented valuable research pertaining to the urban poor in India, using various cities as case studies. I hope the MoHUPA can continue to fund si- milar research on urban poverty with its meagre budget.
The Bus Stops Here
A new metro rail policy will be announced with its focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. But what about bus transport? Research conclusively shows that for developing countries, roads serve the aam aadmi well — as long as buses are there — while connecting people for various other purposes.
Notwithstanding the Delhi Metro’s success, this mode of transport is expensive, needs a lot more infrastructure, and still can’t ‘ship’ millions.
Life in urban India will go on without any discernible change to the way in which the poor live, scholars conduct urban research, and commuters travel. Even after this Budget.
The writer is professor, Centre for Research in Urban Affairs, Institute for Social and Economic Change, Bengaluru. Views are personal
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