Sort out the urban mess to fuel economic growth

A little over two-thirds of the Indians live in rural areas. However, in 2022, the urban population grew faster than the rural one. The trend is likely to remain unchanged. As more people are likely to gravitate towards urban areas in search of better incomes, there is bound to be greater pressure on such places.

The great contradiction is that just one-third of the total population — those living in urban areas — accounted for 63 per cent of the national GDP in 2023. And the projection is that by 2030, this share is likely to rise to 75 per cent.

The mega policy challenge is to focus on urban India in such a way that it can grow and prosper in a sustainable manner. As urban areas become home to more and more people, they must become more prosperous and habitable.

There is a complexity in urban India — not only are youngsters moving from rural to urban places, they are also seeking to shift to top-tier cities that offer the most opportunities. To address the challenge, global consultancy BCG (Boston Consulting Group) has devised a plan so that 50 Indian cities with one million or more residents each live up to the ecosystems that are needed for them.

There are three critical areas that need to be addressed successfully in order to move forward. One, there is economic and social inequality across cities. This is highlighted when we compare, for example, Delhi with Bareilly and Patna. There is great inequality, particularly in healthcare and education infrastructure.

Two, things are getting worse. The quality of life is deteriorating in smaller cities. In particular, there is a shortage of housing and the commute is long. Hence, more people keep moving to larger cities. In Mumbai, over 40 per cent of the people live in slums. Delhi alone has as many as 750 slum clusters.

Three, air quality, water table and waste management are deteriorating. Extreme weather and global warming are impacting even large cities. Chennai’s temperature has gone up by 1°C since 1960, causing floods.

Large cities need city designs and master plans, with 10- and 30-year visualisations. There is a need to have separate plans for different economic sectors like manufacturing (factories), services (IT centres) and agriculture (local horticultural areas).

It is imperative to develop robust transport connectivity. One way to do it is by making it expensive to buy a private car space in city apartment areas. Further, Metro rail services should be made more efficient to ensure a faster and more reliable commute for more people. Mumbai has the oldest and longest history of Metro and suburban railway services. Delhi has also made great strides in taking forward the Delhi Metro Rail Corporation. The Kolkata Metro Rail Corporation is fast catching up.

As all these individual processes make progress, there is a need for an underlying enabler. There has to be a law in place to govern urban spaces. A step in the right direction was taken through the 74th constitutional amendment, with first- and second-tier cities having an institutional framework. But the third-tier ones have been lagging behind.

What is most important is not just to have laws and administrations in place but also a system through which residents can keep communicating with the corporators and help find the right solutions. Perhaps the best way to describe the troubling reality is to outline what is happening in Mumbai’s Dharavi.

Residents from city areas like Mulund, Kurla and Dharavi have formed a group to demand clarity on the Dharavi redevelopment scheme and the proposed Project Affected Persons (PAP) colony. They have come together as the Mumbai Bachao Samiti.

A bone of contention is the proposal to have a PAP colony in these areas that lie outside Dharavi so that the space that is thereby freed up can be used for the project to undertake development. Those from areas like Mulund are against the project; they worry that the infrastructure in their areas will not be able to accommodate the influx of new residents.

In particular, the residents are opposed to the idea of using the fallow area of the defunct dairy in Kurla for the project. Instead, they want to have the land converted into a recreational space. The most interesting part is that the people in Dharavi do not want to move out of there. They earn their livelihood by working at little workshops and factories based there.

Coming back to the BCG, it makes three overall proposals. There needs to be a governance model that includes these stakeholders. There has to be a local government, municipal leaders and self-sufficient finances (in India through finance commissions). Second, the private sector has to be allowed to develop enterprises that will make money, employ people and help invest the surplus back into the city ecosystem. Third, and perhaps most important, there has to be a place for a civic society that fosters dialogue, ensures accountability and promotes the public interest.

I, however, have one grouse with the BCG. It is focused only on large cities, not paying attention to small towns and peri-urban areas. The people living on the outskirts of large towns and cities do not make as much money as city dwellers do. These smaller urban areas need both proper town planning and the commute facilities that will connect them with the heart of the cities.

If all that has been spelt out happens, urban India will grow the right way, enabling people to earn more and, in the process, helping the economy progress. Economists, in particular, will need to look at not just finances but also worry about how urban India can become the leitmotif of dense mixed living with adjoining parks and proper garbage and waste water management.