Urban Infrastructure Managment

Agenda

Urban Infrastructure Scenario

Models of Urban Governance

Municipal Finances

Major municipal reforms

Framework for Urban Infrastructure Delivery

 Indiahasthesecondhighesturbanpopulationintheworld.PopulationofIndiancitieswill
increasefrom340millionin2008to590millionby2030–40percentoftotalpopulation

AdditioninUrbanpopulation By 2030, India willhave:

from2010 - 2050 • 68 cities with population of more
(in millions) than 1 million
600 • 13 cities with more than 4
500
million people
• 6 megacities with population of
400
10 million or more, at least 2 of
In millions

300 which (Delhi and Mumbai) will

497 be among the five largest cities
200
341 in the world
100 200 By 2031, about 600 million Indians
103 92
0
will reside in urban areas, an increase
India China Nigeria US Indonesia of over 200 million in just 20years.
The investment requiredfor
Governmenthas offered tax and non-tax
buildingurbaninfrastructureinIndia,overthe
incentives topromoteinvestmentsinurban
next 20 years, is estimated at approximately
infrastructureandhousingsectors.
USD1 trillion

3
– https://www.worldbank.org/en/news/press-
release/2022/11/14/india-s-urban-infrastructure-needs-
to-cross-840-billion-over-next-15-years-new-world-bank-
report#:~:text=NEW%20DELHI%2C%20November%2014%2C%
202022,its%20fast%2Dgrowing%20urban%20population.
Urban
Infrastruct
ure
Scenario
Trendsin
Urbanization
 Category Description

Classificati
Statutory N o ti fied u n d e r la w by res p ec tiv e S tat e/UT g o v er n
m e n t a n d h a v e lo c al b o d i e s l i ke m u n i c i p a l c o r p o r
at
i o n , muni cipali ty, etc , irrespec tiv e o f d em o g r ap h i c
charac teristi cs.

on of
E g . Ah m e d a b a d , V a d o d a r a , S h i m l a , K a n p u r
Census To w n P l a c e s w h i c h sati sf y f o l l o w i ng c r i ter i a:

• A m i n i m u m population of 5000 perso ns;

Urban
• At least 75 % of m a l e m a i n w o r k i n g p o p u l a t i o
n e n g a g e d in n o n -
ag r i c ultur al p ur sui ts; a n d
• A densi ty of p opul a ti on of at

areas
least 4 0 0 p e r s o n s p e r s q u a r e k i l o
meter
Out Growths A v i ab le uni t s u c h a s a v i l lag e o r p a r t o f a v i l lag e c
o n ti g u o u s to a s tat u to ry t o w n and p o sse sse s u r b a n
i nf r astr uc tur al f ac i l i ties a n d a m e n i t i e s .
S o m e of th e e x a m p le s ar e rai lw ay co lo n y , uni v er s
ity c a m p u s , p o rt ar ea, mi litary c a m p s , etc. , w h i c
h ha v e c o m e up near a statutory t o w n outside i
ts s t a t u t o r y l i m i ts b u t w i t h i n t h e r e v e n u e l i m i ts
o f a v i l lag e o r v i l lag es c o n t i g u o u s t o t h e t o w n
Urban A c o n t i n u o u s u r b a n sp r e a d c o nsti tuti ng a t o w n an d
i ts a d j o i n i n g o u t g r o w t h s ( O G s ) , o r t w o o r m o r e
( UA) p hy si c ally c o n t i g u o u s t o w n s t o g e t h e r w i t h or w i t
hout
o u t g r o w t h s of s u c h t o w n s .
Class I UA/Town Population of at least 468 in number
1,00,000 persons (2011)
70% of urban
population share
Million Plus UAs/Towns Population of one 53 out of 468 (2011)
million or above 42.6% urban
population share
Mega cities Population more than 3 out of 53 (Greater
10 million Mumbai, Delhi and
Kolkata)
 Total
Rank State Population U r b a n P o p (%) Rural Pop (%)
M o s t u r b a n i s ed states
1 Delhi 16,787,941 97.50 2.50
2 C h andigarh 1,055,450 97.25 2.75
3 Puducherry 1,247,953 68.33 31.67
4 Goa 1,458,545 62.17 37.83
5 Mizoram 1,097,206 52.11 47.89
6 Tam il N a d u 72,147,030 48.40 51.60
7 Kerala 33,406,061 47.70 52.30
8 Maharashtra 11,23,72,972 45.23 54.77
9 Gujarat 6,03,83,628 42.58 57.42
Least urbanised states
1 Hi m ac h al Pradesh 68,56,509 10.04 89.96
2 Bihar 10,38,04,637 11.30 88.70
3 Assam 3,11,69,272 14.08 85.92
4 Orissa 4,19,47,358 16.68 83.32
5 Meghalaya 29,64,007 20.08 79.92
6 U t t a r Pradesh 19,95,81,477 22.28 77.72
7 Arunachal Pradesh 13,82,611 22.67 77.33
8 Chhattisgarh 2,55,40,196 23.24 76.76
9 Jharkhand 3,29,66,238 24.05 75.95
10 Rajasthan 6,86,21,012 24.89 75.11
11 Sikkim 6,07,688 24.97 75.03
India 1,21,01,93,422 31.16 68.84
UrbanGovernancein
India
M unicipal Governance in India
exists since 1687 with the
formation of Madras Municipal
Corporation and then Calcutta and
Bombay M unicipal Corporation in
1726.
In 1882 Lord Ripons resolution of
local self-government laid the
democratic forms of municipal
In early part of the nineteenth
governance in India. In 1919 In 1935 Government of India act
century almost all towns in India
Government of India act brought local government under
had experienced some form of
incorporated the need of the the purview of the state or
municipal Governance.
resolution and the powers of provincial government and
democratically elected government specific powers were given.
were formulated.
In 1992, a major step towards the
The Amendment calls for greater
decentralization and
responsibilities and authorities for Planning for economic and social
empowerment of local
local governments by recognizing development and role of municipal
governments in India took place
it as a third tier government. Some government in implementation of
with the enactment of 74th
of the important aspects include: urban poverty alleviation projects
Constitutional Amendment Act.
Increased responsibility for urban
Greater authority to mobilize and
planning at the district and using of resources
metropolitan levels
 After the 74th
Amendment was Mahanagar nigam
enacted there are only (municipal
three categories of corporation)
urban local bodies:

Nagar panchayat
Nagar palika
(notified area council,
(municipality)
city council)
 Duties of Municipal Bodies as Listed in the Twelfth Schedule of the
Constitution of India

1. Urban Planning, including town planning

2. Regulation of land use and construction of buildings
3. Planning for economic and social development
4. Roads and bridges
5. Water supply for domestic, industrial and solid waste management
6. Public health, sanitation conservancy, and solid waste management
7. Fire Services
8.Urban forestry, protection of environment and promotion of ecological aspects
9.Safeguarding the interest of weaker sections of society, including the disabled and mentally
retarded
10. Slum improvement and upgrading
11. Urban poverty alleviation
12. Promotion of cultural, educational, and aesthetic aspects
13. Provision of urban amenities and facilities such as parks, gardens, playgrounds, etc.
14. Burials and burial grounds, cremations, and electric crematoriums
15. Cattle pounds, prevention of cruelty to animals
16. Vital statistics including registration of births and deaths
17. Public amenities including street lighting, parking lots, bus stops and public conveniences
18. Regulation of slaughter houses tanneries
UrbanGovernance–3
Tier
System

Level of Influence at local level

Traditionally, the state government had a major
influence on urban infrastructure. No clear demarcation
of powers existed between state and local (municipal)
levels and so state governments ended up taking most
of the decisions regarding urban infrastructure
Center
The Central Government has also had a role to play,
but this role mainly deals with providing tax
concessions, training and guidelines and dovetailing
central plans such as the National Urban Transport
State Policy with schemes such as the Jawaharlal Nehru
National Urban Renewal mission

Municipality
The chart on the left graphically depicts the level of
influence held by various tiers of government, with the
municipal governments having the least powers
OLD
Problems
Due to lack of on-
withthe Funding for urban
the-ground
knowledge on the
areas comes from part of these
earlier model the center or the
state
agencies, the wrong
groups or wrong
projects often get
funded

Conflicting
programs at the
state and central Bureaucracy at
level do not align, these levels stymies
leading to progress
misdirected flow of
funds
 NewM odelforUrban
Governance
In the earlier model, quality of services are

Level of Influence at local level

likely to suffer and a preferable approach
would be for Urban Local Bodies (ULBs) or
municipalities to make their own decisions
based on their needs.
Center
ULBs could be democratically elected and
could raise their own funds to provide
services such as urban planning, water
State supply, roads, bridges, Urban amenities such
as parks etc

Municipality This new model is currently being adopted in

policy planning circles and is depicted in the
adjacent figure

NEW
74thAmendment
 74th CAA (12th Schedule)
■ The 74th Constitutional Amendment Act, seeks

devolution of powers to local bodies.

ULBs will be in charge of the functions depicted in the box in the next
slide, which has been taken from the India Infrastructure Report

The 74th Amendment gives more power, responsibilities, and the ability to
raise funds, to control revenues and to deliver projects, to municipalities
74th CAA (12th Schedule)
What isanUrbanLocal
Government
Urban Governance in India
• Municipal Governance in India exists since 1687 with the formation of Madras
Municipal Corporation and then Calcutta and Bombay Municipal Corporation in 1726.
• In early part of the nineteenth century almost all towns in India had experienced
some form of municipal Governance.
• In 1882 Lord Ripons resolution of local self-government laid the democratic forms of
municipal governance in India. In 1919 Government of India act incorporated the
need of the resolution and the powers of democratically elected government were
formulated.
• In 1935 Government of India act brought local government under the purview of the
state or provincial government and specific powers were given.
• In 1992, a major step towards the decentralization and empowerment of local
governments in India took place with the enactment of 74th Constitutional
Amendment Act.
• The Amendment calls for greater responsibilities and authorities for local
governments by recognizing it as a third tier government. Some of the important
aspects include:
➢ Planning for economic and social development and role of municipal government in
implementation of urban poverty alleviation projects
➢ Increased responsibility for urban planning at the district and metropolitan levels
➢ Greater authority to mobilize and using of resources
• After the 74th Amendment was enacted
there are only three categories of urban
local bodies:
• Mahanagar nigam (municipal corporation)
• Nagar palika (municipality)
• Nagar panchayat (notified area council,
city council)
 Duties of Municipal Bodies as Listed in the Twelfth Schedule of the
Constitution of India

1. Urban Planning, including town planning

2. Regulation of land use and construction of buildings
3. Planning for economic and social development
4. Roads and bridges
5. Water supply for domestic, industrial and solid waste management
6. Public health, sanitation conservancy, and solid waste management
7. Fire Services
8. Urban forestry, protection of environment and promotion of ecological aspects
9.Safeguarding the interest of weaker sections of society, including the disabled and mentally
retarded
10. Slum improvement and upgrading
11. Urban poverty alleviation
12. Promotion of cultural, educational, and aesthetic aspects
13. Provision of urban amenities and facilities such as parks, gardens, playgrounds, etc.
14. Burials and burial grounds, cremations, and electric crematoriums
15. Cattle pounds, prevention of cruelty to animals
16. Vital statistics including registration of births and deaths
17. Public amenities including street lighting, parking lots, bus stops and public conveniences
18. Regulation of slaughter houses tanneries
 Essentially Municipal Functions Municipal Corporation Municipal Council Nagar Panchayat
Urban planning including town planning Yes Yes Yes

Regulation of land-use and construction of buildings Yes Yes Yes

Planning for economic and social development Yes Yes Yes

Roads and bridges Yes Yes Yes

Water supply domestic, Industrial and commercial
purposes Yes Yes Yes

Public health, sanitation, conservancy and solid waste

management Yes Yes Yes

Fire services Yes Yes No

Urban forestry Yes Yes Yes
Preventive Health Care Yes Yes Yes

Provision of urban amenities and facilities such as

parks, gardens, playgrounds Yes Yes Yes

Burials and burial grounds, cremations, cremation

ghats/grounds and electric crematoria Yes Yes Yes

Cattle pounds, prevention of cruelty to animals Yes Yes Yes

Vital statistics including registration of births and

deaths Yes Yes Yes

Street lighting Yes No Yes

Parking lots, bus stops and public conveniences Yes Yes Yes

Regulation of slaughter houses and tanneries Yes Yes Yes

Slum improvement and up gradation Yes Yes Yes

Agency Functions
Protection of the environment and promotion of
ecological aspects Yes Yes Yes

Safeguarding the interests of weaker sections of

society, including the handicapped and the mentally Yes Yes Yes
retarded

Urban poverty alleviation Yes Yes Yes

Promotion of cultural, education and aesthetic aspects Yes Yes Yes

Primary Education Yes Yes Yes

Primary Health Care Yes Yes Yes
Urban Governance – 3
Tier System
■ Traditionally, the state government had a

Level of Influence at local level

major influence on urban infrastructure.
No clear demarcation of powers existed
between state and local (municipal) levels
and so state governments ended up taking
Center most of the decisions regarding urban
infrastructure
■ The Central Government has also had a
role to play, but this role mainly deals with
providing tax concessions, training and
State guidelines and dovetailing central plans
such as the National Urban Transport
Policy with schemes such as the
Jawaharlal Nehru National Urban Renewal
Municipality mission
■ The chart on the left graphically depicts
the level of influence held by various tiers
OLD of government, with the municipal
governments having the least powers
Problems with the
earlier model

■ Funding for urban areas comes from the center

or the state
■ Due to lack of on-the-ground knowledge on the
part of these agencies, the wrong groups or
wrong projects often get funded
■ Conflicting programs at the state and central
level do not align, leading to misdirected flow of
funds
■ Bureaucracy at these levels stymies progress
 New Model for
Urban
Governance
■ In the earlier model, quality of

Level of Influence at local level

services are likely to suffer and a
preferable approach would be for
Urban Local Bodies (ULBs) or
municipalities to make their own
Center decisions based on their needs.
■ ULBs could be democratically
elected and could raise their own
State funds to provide services such as
urban planning, water supply,
roads, bridges, Urban amenities
such as parks etc
Municipality ■ This new model is currently being
adopted in policy planning circles
and is depicted in the adjacent
NEW figure
74th Amendment
 74th CAA (12th
Schedule)
■ The 74th Constitutional Amendment Act, seeks
devolution of powers to local bodies.
■ ULBs will be in charge of the functions depicted in
the box in the next slide, which has been taken from
the India Infrastructure Report
■ The 74th Amendment gives more power,
responsibilities, and the ability to raise funds, to
control revenues and to deliver projects, to
municipalities
74th CAA (12th
Schedule)
What is an Urban
Local Government
Municipal
Finance

■ Main sources of finance for municipalities are taxes (Land

+ Building taxes)
□ State govt mandates the tax rates rates
■ Another source of finances are fund Transfers from States
and the Center
□ This can happen at the discretion of state govts
■ State Finance Commission (SFC) is a body with
responsibilities to ensure that municipalities have
adequate revenues for their operations
■ Funding from the Center can be direct to the ULB, or can
come through the state governments
Where is the Money
Spent by Municipalities?
General Administration: Municipal administration, finance, election, estate, etc.
Planning & Regulations which includes city and town planning, building
regulation, encroachment removal, trade license
Public Works: Construction and maintenance of roads and pavements, bridges
and fly overs, street lighting, storm water drains, traffic signals, etc.
Health: Public health, epidemic / prevention control, family planning, primary
health care, hospital services, burial and cremations, Ambulance / Hearse
Services
Sanitation and Solid Waste Management: Solid Waste Management (SWM),
public convenience, slaughter houses, etc.
Civic Amenities: Water supply, sewerage, fire services, municipal markets, etc.
Urban Forestry: Parks, gardens, play grounds, lakes and ponds, urban forestry,
environment conservation, etc.
Urban Poverty Alleviation & Social Welfare: Welfare of women, welfare of
SC/ST/OBC, slum improvements, housing, urban poverty alleviation
Other Services: Electricity, education, transportation, facility for pilgrims
AMC –Budget 2018-
19
• Increasing demand for urban infrastructure
• How to find resources to finance the
construction and maintenance of
infrastructure?
Question is: Are banks the right institutions to
finance infrastructure projects that have
very long payback periods and high risks?
• Institutions with long-term funding sources
(insurance companies, pension funds) and
long-term lending institutions are the most
suited
• Banks suffer maturity mismatches
• NPA crisis in banks
• Long maturity funds like Employee P rovident
Fund, Employee State Insurance Scheme
can be potential funders
– But there are regulatory restraints
• Municipal bonds
– have been in existence since 1997
– Cities such as Ahmedabad, Bangalore, Nashik
and Madurai have issued them; mostly privately
placed with institutions, and not tradable
– no new issues since 2010
Other sources

• PPP- Public Private

Participation
• Bilateral – governments of UK,
Australia, Netherlands, Japan
• Multilateral – World Bank, Asian
Development Bank
Where are the investments coming in?
• Greenfield infrastructure with proven
demand and significant future income
stream
• Growth stage infrastructure like expansion
projects with reasonably consistent yield
• Late stage or brownfield infrastructure with
predictable income
• What are the implications of
financing arrangements for
development of a society?
• Historically, infrastructure has been
supported by budgetary support – national
and state level
– Central schemes like JNNURM, Urban
Infrastructure Dev Scheme for Small and
Medium Towns
– Viability gap funding
– Central assistance for doing technical reports
• With the introduction of liberalisation and
devolution of resources to urban local
governments (74th Amendment) such
support has been reduced; budgetary
support from of urban local bodies have
become critical
• More emphasis on viability of projects
• Also on mobilisation institutional finance
for capital investment and for maintenance
of assets
• Institutional borrowing (banks and financial
institutions) comes at high costs and
bankability of the projects is important
• Yet, bank credit to infrastructure,
especially to the power sector, increased
significantly from 2005-2016
 State of Municipal
Finances
■ Despite the existence of the various financing arrangements
described earlier, the previous slide shows that municipal
finances are on average in poor shape
■ Most municipalities rely heavily on grants to fund their
operations and raise only a small percentage of their
expenses
■ They are therefore unable to spend adequately on
infrastructure and services
■ As the table shows, a large portion of their expenditure is
towards paying salaries
■ Unless municipal governments have greater control over raising
money and deploying it, it will be difficult to improve the urban
infrastructure scenario
■ The 74th CAA and other policy approaches are a step in this
direction
Municipal
Reforms

■ A Model Municipal Law (MML) has been mooted. Under

this law, municipalities should be granted powers and
responsibilities for the following items:
□ Municipal bodies must have elected representatives and not
nominees
□ Municipal bodies must have executive powers
□ Guidelines for financial management such as preparing balance
sheets, training on debt limitation policies should be provided.
Accounting for different sectors should be maintained separately
□ Raising funds through taxes
□ Implementing infrastructure and services
□ Approving small projects
□ Regulatory oversight
Other
reforms
■ E-governance initiatives have been introduced in several
states to make the process of interaction with
government easier, and to increase transparency and
accountability of the government

■ UIDSSMT – Urban Infrastructure Development Scheme

for Small and Medium Towns was initiated to improve
urban infrastructure

■ JNNURM - Jawaharlal Nehru National Urban Renewal

Mission was launched recently to enable cities to
improve their urban infrastructure. This program provides
both funding and incentives for improvement
Government
Schemes
 Urban
Reforms

Source : NIP
Urban Development : India
Scenario
• Government of India has prioritized cities as a lever for the transformation of
today’sIndia.Urbancentres are andwill be the enginesof growth.
• The Government of India initiatives such as Swachh Bharat Abhiyaan, Atal
Mission for Rejuvenation and Urban Transformation (AMRUT), Housing for ALL
and Smart Cities Mission aim at providing a clean and sustainable environment
alongwithadecent quality oflife toitscitizens.

4
Urban Development :
Initiatives
‘Promote cities thatprovide core infrastructure,
give adecentqualityoflifetoitscitizens,aclean
100 Smart Cities to be andsustainableenvironmentandapplicationof
developed in a duration of ‘Smart’Solutions‘
five years Selected Smart City will be given ~USD 31 mn. (Rs.
200 crore) in the first year, followed by ~USD 15.5
mn.(Rs.100 crore every year for the next three years

Accessibility to basic ‘Providing basic services (e.g. water supply,

amenities like water and
sewerage; Development
and maintenanceof
green areas; Public
transportation to reduce
pollution
sewerage, urban transport)to householdsand
build amenitiesincities whichwill improvethe
quality oflifeforall,especiallythepoorandthe
disadvantaged.’
Total outlay planned : ~ USD7.5 bn. (Rs. 50,000
crore) for 5 years from FY2015-16to FY2019-20

Round one: Ajmer, ‘Toundertake strategic andplanned development

Amaravati, Amritsar,
Badami, Dwaraka, Gaya,
Kanchipuram, Mathura,
Puri, Varanasi, Velankanni
and Warangal
of heritage cities aiming at improvementin
overall quality of life with specific focus on
sanitation, security, tourism, heritage
revitalizationandlivelihoods retaining the city’s
culturalidentity‘

Source:MinistryofUrbanDevelopment,GovernmentofIndia; Note:1 USD=Rs.65 5

Urban Development :
“Housing for All by 2022”
for economically weaker
sections ; Affordable
housing in partnership with
Public & Private sectors;
Cover the entire urbanarea
consisting of 4041 statutory
towns with initial focus on
500 Class Icities
Swachh Bharat mission
Source:MinistryofUrbanDevelopment,GovernmentofIndia
Initiatives
• Slum rehabilitation of Slum Dwellers with
participation of private developers using land as a
resource
• Promotion of affordable housing through credit
linked subsidy and affordable housing in
partnership with public and privatesectors
• Subsidy for beneficiary-led individual house
construction or enhancement ; Central grant of Rs.
1lakh perhouse
• Subsidy of 6.5 % on housing loans availed upto a
tenure of 15 years for EWS/LIGcategories
‘Tomake India a open defecation free
countryin five years,to construct community
and public toilets in rural and urban areas,to
provide running water supply,to treat waste
water,to keep roads,pavementsandlocalities
clean.’
6
 The RealEstate(RegulationandDevelopment)Act,2016 will help regulate the real
estate sectorandbringinclarity forbothbuyersand developers
• Aims at protecting the rights and
interests of consumers and
promotion of uniformity and
standardization of business practices
and transactions in the real estate
sector
•The law ensures that any delay in
project completion will make the
developer liable to pay the same
interest as the EMI being paid by the
consumer to the bank back to the
• State Real Estate Regulatory Authority consumer, decreases risk for developer
(RERA) to govern both residential and • 70% of the project funds to be parked
commercial real estate transactions in a dedicated bank account by the
• Mandatory for developers to post all developer to ensure timely completion
information on any issues with the State RERA of projects by thedevelopers.
and information passes on to the consumers.

Source : Ministry of Housing and UrbanPoverty Alleviation, Govt.ofIndia 7

 Real Estate Investment Trusts
(REIT)
The concept of REIT in India has received regulatory backing through SEBI
(Real Estate Investment Trusts) Regulations,2014 and introduction of FDI in REIT under
automatic route in November 2015 gazette notification

REITwould boostthe real estate sector in Importance ofREITinCommercialReal

Indiaby way of: Estate development
• Increased liquidity in the real estate sector
as REITswould attract large institutional
long-term investors such as pension and
insurance funds
• Easy funding availability for mid-tier
developers
• Investmentalternative for small investors
• India has about 375 million sq. ft. of
potential Grade-A office space which is
valued at USD65-70billion.
• 80-100 million sq. ft. is estimated to be
eligible for REITs in the coming two to
three years and would be valued at USD15-
20 billion

8
 Infrastructure Investment Trusts
(InvITs)
• Facilitateinvestment in the infrastructure sector
• Tomanage income generating infrastructure assets, typically offering investors regular
yields and a liquid method of investing in infrastructureprojects
• To encourageforeign investment in the Indian infrastructuresector
• Toreduce the burden on the banking system, and allow developers to unlock tied-up
capital
Securities and Exchange Boardof India FourElements ofInvIT
(SEBI)issued regulations for InvITs
(Infrastructure Investment Trusts)
Regulations in August2015 topromote
InvITs:
• Reducingthe mandatorysponsor
holdingto hold 10 per cent (2016)

• Allowingtwo level SPVsfor InvITs:The

sponsors may have separate Holding
Companies (“Holdcos”) which holdmultiple
SPVs which have projects of a particular
category. (2015 amendment)

Consultationpaper foramendmentsto theSEBI(InfrastructureInvestmentTrusts)Regulations, 2014;

9
Urban Development:
National
Policies
NATIONALURBANTRANSPORTPOLICY,2006 NATIONALURBANHOUSINGANDHABITAT
POLICY,2007

• Promote integrated land use and transport • Affordable housing forall,with

emphasison urban poor through
planning, greater use of public transport and
securityof tenure
non-motorizedmodesof travel,use of
cleaner technologies • Promotion ofPPP
• Capacitybuilding at institutional and individual • Developmentof cost effective and qualitymaterials
level to bring down the cost of EWS/ LIG houses
• Provision of spatial incentives and
fiscal concessions
NATIONALURBANSANITATIONPOLICY,
2008
• Special focus on hygienic and affordable
sanitation facilities for the urban poor and
the women
• Capacity building in areas related to
governance, financial
management,and service delivery

10
 Smart Cities
Mission

Launched on June 25, 2015, the Smart Cities Mission is a flagship scheme under the
Ministry of Housing and Urban Affairs.
This ambitious programme by the Indian Government aims at building 100 Smart Cities
across India with focus on planned urbanisation and sustainable development as a support
system for the neighbouring cities.
It also involves the development of high-quality infrastructure with provision of basic
amenities, education, health services, IT accessibility, digitisation, e-governance,
sustainable development, safety and security. Global cities such as Singapore, Japan, and
the USA are offering valuable support to India’s mission, which also emphasises on
economic development of urban centres by creating more jobs and enhancement in
income.
Progress so far: The mission involves as many as 3,183 projects worth Rs 1,45,245 crore.
But so far, work has been finished only in projects worth Rs 4,960 crore, amounting to
only five per cent of total projects. The target of completion of the projects was extended
from 2019-20 to 2022-23 for execution of projects in cities selected in round four. Funds
worth Rs 500 crore will be released for the top 15 cities as per data released by Ministry of
Urban Development.
JNNURM (2005-
2014)

■ The major themes of JNNURM are Infrastructure

renewal, improved governance and pro-poor
policies
■ The scheme currently covers 63 Cities spread
over 3 Tiers. An outlay of INR 1,00,000 Cr is
envisaged
■ The Infrastructure Mandate extends to the
following public services
□ Urban transportation
□ Water supply
□ Sanitation
□ City beautification and so on
JNNURM
Financing
■ The Ministry of Urban Development can fund projects in
the selected cities under the JNNURM scheme
■ As indicated in the previous slide, the amount of funding
is dependant on the size of the project and the city in
question
□ Tier 1 cities will be funded only up to the tune of 50% and will
have to raise the remaining funds by themselves
□ For Tier 2 cities it is 30% and 10% for Tier 3 cities

■ This funding is contingent on enacting a set of reforms

■ Cities are therefore incentivized to raise funds
themselves and are encouraged to explore the private-
public partnership route in this regard
Mandatory Reforms to be
enacted by States/ULBs
in order to be
1. Use of Modern accounting systems
2. Use of E- governance, GIS
3. Reform of property tax so that ULBs get more revenue
4. Levy of user charges for services
5. ULBs must be made in charge of local infrastructure
delivery
6. Decentralization and implementation of 74th CAA
7. Enactment of a Public disclosure law
8. Enactment of a Community participation law
9. Introduction of regulators
10. Repealing of Urban land ceiling acts, rent control etc
Optional Reforms that need not be enacted
immediately but must be undertaken in the
near future

■ Streamlining approvals and permit

procedures.
■ Rainwater harvesting bye laws
■ Encouraging PPPs
■ Administrative and structural reforms
Preliminary views
on JNNURM

■ Many cities are raising money required through

issuing bonds (e.g. Ahmedabad)
■ Others are looking at PPP (e.g. Onyx for Solid
Waste Management in Chennai). However such
cases are relatively fewer
■ Overall – Municipal finances are still in pretty
poor shape and the 74th CAA and other reforms
have still not had much effect.
SMART CITIES
MISSION
• It is an urban renewal and retrofitting program by the Government of India with a mission to develop 100 cities that provide core infrastructure and
give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘smart’ solutions. The focus is on sustainable and
inclusive development and the idea is to look at compact areas, create a replicable model which will be an example for other aspiring cities.
• The core infrastructure elements in a Smart City would include:
1. Adequate water supply,
2. Assured electricity supply,
3. Sanitation, including solid waste management,
4. Efficient urban mobility and public transport,
5. Affordable housing, especially for the poor,
6. Robust IT connectivity and digitalization,
7. Good governance, especially e-Governance and citizen participation,
8. Sustainable environment,
9. Safety and security of citizens, particularly women, children and the elderly, and
10. Health and education.
• The core infrastructural requirement to develop Smart cities can be achieved with Smart solutions like E-Governance and Citizen Services, Energy
Management, Waste Management, Urban Mobility, Water Management etc. The central Government proposes to give financial support to the
Mission to the extent of USD 7.77 billion in the next five years (FY2015-16 to FY2019-20). In the first year, Government proposes to give USD
30.77 million to each selected Smart City to create a higher initial corpus, followed by USD 15.38 million every year for the next three years.
The strategic components of area-based development in the Smart Cities Mission are city improvement (Retrofitting), city
• renewal (Redevelopment) and city extension (Greenfield development) plus a Pan-city initiative in which Smart Solutions are applied covering
larger parts of the city. Smart Cities will feature urban development and expansion of housing opportunities under different schemes like Atal
Mission for Rejuvenation and Urban Transformation (AMRUT), Pradhan Mantri Awas Yojana and Swachh Bharat Mission.
ATAL MISSION FOR
REJUVENATION AND
URBAN TRANSFORMATION
(AMRUT)

• The purpose of (AMRUT) is to:

• Ensure that every household has access to a tap with assured
supply of water and a sewerage connection
• Increase the amenity value of cities by developing greenery and
well maintained open spaces (e.g. parks)
• Reduce pollution by switching to public transport or constructing
facilities for non-motorized transport (e.g. walking and cycling)
• The total outlay for AMRUT is USD 7.77 billion for five years
from FY 2015-16 to FY 2019-204 and 500 towns will receive
benefits.5 The scheme based on Public Private Partnership (PPP)
model will be integrated with Housing for All by 2022.
PRADHAN MANTRI AWAS
YOJANA- HOUSING FOR ALL
(URBAN)

• The Mission is being implemented during 2015-2022 and provides central

assistance to Urban Local Bodies (ULBs) and other implementing agencies
through States/UTs for:
• In-situ rehabilitation of existing slum dwellers using land as a resource through
private participation
• C redit-Linked Subsidy
• Affordable housing in partnership
• Subsidy for beneficiary-led individual house construction/enhancement.
• Total housing shortage envisaged to be addressed through the New Mission is
20 million. This scheme will be implemented across 4041 statutory towns with
the initial focus on 500 Class I cities in India. 3 phases of the PMAY will cover
500 cities around the country by 2022, in Phase-I (April 2015 – March 2017),
100 Cities will be selected from States/UTs, in Phase – II (April 2017–March
2019) PMAY will be implemented in additional 200 Cities and in Phase-III (April
2019–March 2022) other remaining cities will be covered. The government has
approved USD 6.7 billion for the implementation of the scheme.6
SWACHH BHARAT
MISSION (SBM)
URBAN
• MISSION OBJECTIVES:
• Modern and scientific Municipal Solid Waste Management
• To effect behavioural change regarding healthy sanitation practices
• Generate awareness about sanitation and its linkage with public
health
• Capacity Augmentation for Urban Local Bodies (ULBs)
• To create an enabling environment for private sector participation in
Capex (capital expenditure) and Opex (operation and maintenance)
• With an outlay of USD 9.54 billion, it covers 4,041 statutory
towns, close to 8 million households.A total amount of USD 433
million has been sanctioned for 2016-17 under this scheme.7
 FOREIGN DIRECT
INVESTMENT (FDI)
• CONSTRUCTION DEVELOPMENT: TOWNSHIPS, HOUSING, BUILT-UP
INFRASTRUCTURE SECTOR8
• 100 % FDI through automatic route is allowed in construction-development projects (which would
include development of townships, construction of residential/commercial premises, roads or bridges,
hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level
infrastructure, townships)
• Each phase of the construction development project would be considered as a separate project for the
purposes of FDI policy. Investment will be subject to the following conditions:
• The investor will be permitted to exit on completion of the project or after development of trunk
infrastructure i.e. roads, water supply, street lighting, drainage and sewerage. a foreign investor will be
permitted to exit and repatriate foreign investment before the completion of project under automatic
route, provided that a lock-in-period of three years.
• The project shall conform to the norms and standards, including land use requirements and provision of
community amenities and common facilities, as laid down in the applicable building control regulations,
bye-laws, rules, and other regulations of the State Government/Municipal/Local Body concerned.
• The Indian investee company will be permitted to sell only developed plots and shall be responsible for
obtaining all necessary approvals.
• The State Government/Municipal/Local Body concerned, which approves the building/development
plans, will monitor compliance of the above conditions by the developer.
• No minimum land area requirement in case of development of serviced plots.
• In case of construction-development projects, minimum floor area of 20,000 sq. mts.
• 100% FDI is allowed under the automatic route for urban infrastructure areas like urban transport, water
supply, sewerage and sewage treatment subject to relevant rules and regulations.
Issues and Challenges to Urban Infrastructure in
India

• Status of drinking water supply, public transportation, sewage and solid

waste management is much lower than desired.
• No city has fully covered 24×7 water supplies.
• Only 74% of the house-holds are served by piped water.
• Only 65 of 423 class I cities have a formal city bus service in 2012.
• Only 30% cities have sewage treatment as against desired 100%.
• 7% urban population has access to the piper sewer system.
• 6% urban population still defecates in the open.
• Only 72% of the solid waste is collected and only 30% is segregated.
Scientific treatment and disposal is non-existent.
• 24% urban population lives in slums.
Issues and Challenges to Urban Infrastructure in
India

• Financing
• Land acquisition
• Clearance form numerous agencies
• Poor pre-construction planning
• Environmental ImpactAssessment
• The DPs show severe lack of poverty planning
• Informal Economy not considered (e.g. Street vendor). It is only recently that the Stree
Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 ha
obligated the ULBs to look at this part of the informal economy and make it a planne
management,
activity. public transportation systems, and marginalised social and
economic groups
• the cursory treatment afforded to vital city infrastructure such as solid waste
• Low revenue from muncipal infrastructure
Local government revenues
as a percentage of GDP
Water
Crisis
Water
Crisis
The Road Ahead –
Systemic Change is
required
■ Mere reforms on paper are not enough
■ We need to ensure that
□ Too many agencies do not handle the same sector
(no duplication or fragmentation)
□ Regulator, implementer and policy makers exist and
they are independent
□ Stakeholders are involved
□ Capacity is built at Municipal level
□ Performance incentives and org. restructuring are
emphasized
□ Reforms and Municipal independence are promoted
There needs to be independence between the policy makers,
the implementors and the regulators to ensure transparent
functioning. Overlaps such as those shown below are not
desirable when structuring urban agencies
Duplication wherein the same service or function
is performed by several bodies, as described in
the figure below is not desirable
 ideal framework can be the following which is adapted from the India
Infrastructure Report. Fiscal flows are assured, institutions are strengthened,the
public is involved, and services are decentralized