Why India needs ‘good’ urbanisation

Synopsis: Covid reinforces that good urbanization is our most powerful technology for poverty reduction.


New York City, with just 6% of the population of Russiahas a GDP that is equal to that. Twenty-six of the world’s 33 megacities are in developing countries because their rural areas lack rule of law, infrastructure and productive commerce. This shows the significance of good urbanization or good development.

India’s challenge is not that of land, labour, or capital but of increasing the productivity of urbanization or its cities. It should also simultaneously look at improving the productivity of local self Government and rural areas. If 50% of our population in rural areas generate only 18% of the GDP, they are bound to live a life of poverty.

What are the challenges of rural areas and local governments?

Rural areas are characterized by poor infrastructure, poor facilities, poor law and order etc. All this leads to poor villagers migrating to cities. It is estimated that two lakh villages out of 6 lakh villages have less than 200 people. 

The annual spending of our central and state government is about Rs 34 lakh crore and Rs 40 lakh crore respectively. 15th Finance Commission estimates our 2.5 lakh plus local government bodies only spend Rs 3.7 lakh crore annually. This discrimination has many reasons:

Power: Local government power is curtailed by the state government in various departments like water, power, schools, healthcare, etc.

Independence — only 13 % and 44 % of the budget of rural and urban bodies is raised from internal sources.

Read moreRecommendation of 15th Finance Commission and challenges faced by Local Bodies

Control: There is excessive control over local bodies, which is deeply embedded in the structure of governance. For example, a Union ministry controlling finance and governance of the states would be unacceptable at the Centre. But at the State level, we have the Department of Local Self Government, which has almost unlimited powers like suspension/removal of mayors and other elected representatives.

Separate central rural and urban ministries: Joint policymaking is difficult, as each ministry wants to pull the policy in its direction.

Lack of power and resources: It drives away talented resources as they feel powerless in those positions.

Centralised Structure: Our democracy gives more power to the centre. Then rest of the power is concentrated in states, leaving local governments powerless.

Leadership and power: Empowering local governments is not taken seriously by the state governments.  The city leadership is either ‘unelected with Power’ (bureaucrats) or ‘elected with limited power and unreasonable conditions’.

Good Urbanisation:  Poor quality urbanisation has led to ‘men-only migration’. It leaves the women dealing with all matters like farm work, raising the children, and looking after in-laws, no proper health services etc.

Even the village children, who go to poor quality government schools, will always be at a disadvantage when compared to urban English educated school children.

What can be done in the future?

Good urbanization requires that the power centres in the state are willing to hand over power functions and finances to the local governments. This can lead to real empowerment of the local bodies.

Source: This post is based on the article “Why India needs ‘good’ urbanisation” published in the Indian Express on 20th September 2021.


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