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HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
HOW can Life in Cities be made better?
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HOW can Life in Cities be made better?

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  • 1. ! HOW can ! Life in Cities ! be made better?! ! ! The Analysis
  • 2. The Analysis Better LIFE in CITIES Cities are important because that’s where India now lives … 1951: 80% in Rural 20% in Urban Census Towns: 5%! Other Cities: 10%! Metros (1mn+): 5%! Mega Cities (10mn+): 0% Source: Urban India 2011 : Evidence, Indian Institute for Human Settlements 2011: 52% in Rural 48% in Urban Census Towns: 17%! Other Cities: 18%! Metros (1mn+): 9%! Mega Cities (10mn+): 4%
  • 3. The Analysis Better LIFE in CITIES Cities are also important as their number is rapidly growing … 2011: 50 Metros with 1mn+ population 2031: 681951: 5 2011: 3 Mega Cities with 10mn+ population 2031: 61951: 0 Source: McKinsey Global Institute Analysis
  • 4. The Analysis Better LIFE in CITIES But when India is faced with so many challenges, why worry about Cities? ! Is worrying about cities, worrying about a few urban elite?! ! ! ! ! ! ! ! ! ! ! ! Well, NO … because Better Cities have a great impact, on everyone!
  • 5. The Analysis Better LIFE in CITIES The Impact ! Better Cities mean … Better Economic Growth for India Better Job Creation for Growing Population Better Life for All, ! Rich and Poor Better Cities are critical to achieving ! Economic growth and Poverty reduction.
  • 6. The Analysis Better LIFE in CITIES Maharastra: Urbanisation 40% | per capita GSDP Rs 30,000 Punjab: Urbanisation 35% | per capita GSDP Rs 30,000 Karnataka: Urbanisation 35% | per capita GSDP Rs 20,000 Rajasthan: Urbanisation 25% | per capita GSDP Rs 15,000 Source: 2005-06 Data, Indian Institute for Human Settlements Report As an example …! Cities have more productive jobs … … so more urban the state, the more prosperous it is.
  • 7. The Analysis Better LIFE in CITIES 70% 70% of jobs in cities are in the volatile informal sector Source: 2005-06 Data, Indian Institute for Human Settlements Report But all is not well … … so could Cities decline into Social chaos? While Rural poor ! are decreasing, ! ! Urban poor ! are increasing 1983! 25 mn 2004! 22 mn 2004! 8 mn 1983! 7 mn 40% 40% of the countries slum dwellers live in 1mn+ cities
  • 8. The Analysis Better LIFE in CITIES So, What would make ! Life in a City better? Affordable ! Housing Streamlined ! Transport Efficient ! Utilities Social! Infrastructure
  • 9. The Analysis Better LIFE in CITIES Affordable ! Housing Why? Undersupply!! ! ! ! ! ! Because Developers’ success depends on hoarding land and getting clearances, not on making affordable quality housing.! A Planning Commission study estimates that Developers need over 30 clearances from diverse agencies like tree-cutting department and civil aviation. And to corner land banks and procure clearances, developers resort to rampant corruption and inefficient resource usage. Key Fact: In Berlin, one-bedroom apartments in 2012 were selling for as little as $55,000; and four bedroom houses in Rhineland for $ 80,000. Equivalent properties in Mumbai were 10 times that amount.
  • 10. The Analysis Better LIFE in CITIES Affordable ! Housing Why Underdeveloped?! ! ! ! ! ! It does not make financial sense for city government to increase supply.! City govt bears additional expenses of providing roads, water, sewage, etc, for additional Supply, but income of stamp duty goes to State govt and taxes from increased economic activity go to Central govt.! ! Result: Maximum residential FSI in major cities around the world is above 10, while in India it does not exceed 4 and is often much lower. Key Fact: On an average, 25% of the population of cities, lives in slums. And in some cases like Mumbai, slums account for 54% of population.
  • 11. The Analysis Better LIFE in CITIES Streamlined ! Transport Continued Indifference?! ! ! ! ! ! 1. JnNURM: 57% funds for roads & flyovers, only 33% for MRTS/buses! 2. Vehicle Tax on Public Bus is several times higher than on a Car Key Quote: A developed country is not where poor people travel in cars; it is one where rich people use public transport.! - Gustavo Petro, Mayor of Bogota Source: Report on Indian Urban Infrastructure & Services, Mar 2011, ! by the High Powered Expert Committee chaired by Dr Isher Judge Ahluwalia
  • 12. The Analysis Better LIFE in CITIES Streamlined ! Transport Collective Culpability?! ! ! ! ! ! 1. Cars and Two wheelers make up 85% of vehicles on India’s roads, but account for only 29% of trips. ! 2. Of the 127 cities / towns monitored under the National Air Quality Monitoring Program, only 3 have low air pollution Key Fact: Public transport to Total urban transport, India: 22%! Upper middle income countries, South Africa, South Korea, Brazil: 40% Lower middle income countries, Philipines, Venezuela, Egypt: 49% Source: Report on Indian Urban Infrastructure & Services, Mar 2011, ! by the High Powered Expert Committee chaired by Dr Isher Judge Ahluwalia
  • 13. The Analysis Better LIFE in CITIES Efficient Utilities? Social Infrastructure? 1. 41% of Firms in cities owned or shared a generator (2006) ! 2. No Indian city has 24 x 7 water - supply ranges from 1 to 6 hours! 3. 55% population of Class 1 towns have access to Latrine (2001)! 4. Less than 40% compliance with Municipal Solid Waste Management Rules on segregation, collection and sweeping (2004) Schools, hospitals, open spaces in cities well below acceptable quality standards, and not close in even quantitative terms.
  • 14. The Analysis Better LIFE in CITIES Increased investment Hence the AskHOW Questions for MPs! How will you strengthen and improve governance of Cities?! How will you increase financial strength of Cities? The HPEC says: India cannot afford to get its urban strategy wrong, but it cannot get it right without bringing about a fundamental shift in the mindset which separates rural from the urban. ! Challenge of managing urbanisation will have to be addressed through a combination of…! Strengthening the framework for governance and financing A comprehensive capacity building programme at all levels of government HPEC: High Powered Expert Committee on Indian Urban Infrastructure & Services (Chair: Dr Isher Judge Ahluwalia)
  • 15. The Analysis Better LIFE in CITIES The 74th Constitutional Amendment Act of 1992 mandated a role for elected Urban Local municipalities and a recommendation was made to State Governments, to devolve a specified set of functions to the local bodies. The ability of the ULBs to deliver urban services depends on ! a) devolution of funds and functions (including land use planning) and! b) helping them build capacities to fulfil their responsibilities. The Governance Challenge Key Fact: Only 50% of the allocated funding under JnNURM sub-mission UIG has actually been released. Cities don’t have the readiness to utilise the Funding available.
  • 16. The Analysis Better LIFE in CITIES The Governance Challenge Key Fact: 9 different Central Govt ministries have programs for Cities Ministry of ! 1. Urban Development ! 2. Social Justice & Employment ! 3. Women and Child Development ! 4. Labor and Employment The issues they address are ! 1. Housing / Shelter (4 ministries) ! 2. Livelihoods / Employment (4 ministries) ! 3. Health (4) 4. Education (4) ! 5. Nutrition / Food security (6) ! 6. Social Security (2) ! 7. Poverty Alleviation (4) 5. Housing and Urban Poverty Alleviation ! 6. Human Resource Development ! 7. Health and Family Welfare ! 8. Consumer Affairs, Food & Public Distribution ! 9. Ministry of Rural Development
  • 17. The Analysis Better LIFE in CITIES Unified Command! ! ! ! ! • One ministry at Central Govt level, for Urban Affairs and Housing! • One Department of Urban Affairs and Housing at state govt level • Unified command over a city under an empowered and accountable Mayor HPEC Recommendations for ! Resolving the Governance Challenge HPEC: High Powered Expert Committee on Indian Urban Infrastructure & Services (Chair: Dr Isher Judge Ahluwalia)
  • 18. The Analysis Better LIFE in CITIES HR Capacity Creation! ! ! ! ! • Set up five Indian Institutes of Urban Management (anchored in existing IIMs or as standalone excellence institutions) ! • Infuse funds and new talent into existing Schools of Urban Planning HPEC Recommendations for ! Resolving the Governance Challenge
  • 19. The Analysis Better LIFE in CITIES HR Capacity Building! ! ! ! ! • 300 officers from IAS and other central services trained annually as urban specialists! • Transparent search-cum-selection process in the appointment of the Municipal Commissioner, with minimum of three years tenure of Management team! • Develop dedicated IT cadre with a Chief Information Officer for the larger cities HPEC Recommendations for ! Resolving the Governance Challenge
  • 20. The Analysis Better LIFE in CITIES Key Fact: Spending on Urban infrastructure is 6% of GDP in South Africa and 7.4% of GDP in Brazil, but in India it is a paltry 0.9% of the GDP. The 74th Amendment recommended devolution of functions, but did not insist of devolution of revenues. State Finance Commissions have been set up to propose devolution of funds, but rarely done adequately, and hence ULBs have little ability to predict availability of funds. • Investment required ~Rs 40 lakh crores over 20 years (or Rs 2 lakh crores /year), compared to expenditure of 1.6 lakh crore in 2012 - a 25% increase is to be sustained! • But Cities will need to meet 2/3rd of their expenditure through their own revenues by 2031. So Cities have to increase their own spending from Rs 0.50 lakh crores in 2012, to Rs 1.2 lakh crores (up 140%) by 2022 and Rs 1.5 lakh crores (up 300%) by 2032. The Financing Challenge
  • 21. The Analysis Better LIFE in CITIES Taxes! ! ! ! ! • Strengthen legal ability of Cities to levy taxes ! • Reform Property Tax system for wider net, and better recovery: From 56% coverage and 37% recovery, if we move to 85% coverage+recovery: Revenues grow 340% (from 0.2% to 0.68% of GDP)! • 13th Central Finance Commission boldly recommends automatic fund transfer to local governments through a percentage of the divisible pool of taxes HPEC: High Powered Expert Committee on Indian Urban Infrastructure & Services (Chair: Dr Isher Judge Ahluwalia) HPEC Recommendations for ! Resolving the Financing Challenge
  • 22. The Analysis Better LIFE in CITIES Land Value based charging! ! ! ! ! • Conversion /betterment /impact / development charges, as well as FSI should be priced on the basis of land value! • And land value appreciation must be captured by Govt (not by Developers and speculators) and funds must be used to build and renew City infrastructure HPEC Recommendations for ! Resolving the Financing Challenge
  • 23. The Analysis Better LIFE in CITIES User Charges! ! ! ! • User-charges (for water, waste management, etc) to be recovered separately, and not through Property Tax • User-charges should cover operating, and capital servicing costs ! • Automatic indexation for charges to cover cost increases - Water charges cover only 30-35% of O&M expenses. For poor, water supply is very costly: they cannot go to work on days that water is to be collected)! • Parking fee to raise revenue and encourage public transport. Average daily parking rate in India cities is around US$ 2 (Rs 90), while cities in other developing countries charge US$ 10-15 (Rs 450-675) per day. HPEC Recommendations for ! Resolving the Financing Challenge
  • 24. IN CONCLUSION! Please Ask your Lok Sabha candidate w w w .A skH ow India.org Creative Partner! MeriMaaCineMAA More?Follow AskHowIndia on How will land use planning and transport planning be integrated to encourage use of public transport? How will single point responsibility for City planning and management be established ? How will more ! land / space be released ! to make housing affordable?How will ! Cities' have enough Funds? How will Cities' management capability be strengthened?

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