Growth of urbanization and its Effect on Economy in India

Abstract

India has to improve its urban areas to achieve objectives of economic development. However, urban governance and management of the services is far from satisfactory. In this context, the Government has launched a reform-linked urban investment program, JNNURM. The paper has analyzed urban trends, projected population, service delivery, institutional arrangements, municipal finances, innovative financing, etc. It has also described status of JNNURM. As per population projection for 2026, level of urbanization would be different in various states. India’s future urban strategy should recognize these differences and plan accordingly. India’s future strategy should focus on: (a) Inter-government transfers with built-in incentives to improve performance; (b) Capacity building of ULBs; (c) Investments on asset creation as well as management; (d) Integrate urban transport with land use planning; (e) Integrate various urban development and related programs at local, state and national levels; (f) Strengthen urban institutions and clarify roles of different organizations; and (g) Second generation of urban reforms should further focus on regulation, innovative financing and PPP, and climate change initiatives; (h) Different approach of supporting reform-linked investments needed for different states based on level of urbanization. It has recommended constitutional amendments as well administrative actions to improve India’s urban areas.