This report is authored by Pritika Hingorani, CEO (India), Artha Global; Vaidehi Tandel, former Junior Fellow; Sharmadha Srinivasan, Senior Associate; Harshita Agrawal, former Senior Associate; Harsh Vardhan Pachisia, former Senior Associate; Kadambari Shah, former Senior Associate; and Mehul Das, former Senior Associate.

Report name

Reforming Urban India (2019)

Who wrote this report?

Artha Global is a policy organisation that supports global partners to design, implement and institutionalise practices that promote prosperity and resilience, with a primary focus on the developing world. They provide actionable research, support policy implementation and work to institutionalise change.

Over the next few decades, the developing world will negotiate overlapping transitions: from rural to urban, farm to factory, informal to formal, brown to green, analogue to digital. Artha helps governments manage these transitions, and the inevitable dislocations they cause, in order to secure long-term prosperity and social stability for citizens.

Artha believes that the multiple challenges of the 21st century require new thinking that cuts across the traditional boundaries of geography, disciplines and interests. Therefore, they leverage their global network of experts to help craft new development agendas, create consensus and build broad coalitions across governments, business, academia, philanthropy and civil society.

Artha's research is housed in six centres: Emerging Cities, Access to Justice, Technology and Innovation, Rapid Insights, Public Health, and Inclusive Growth.

Best quote

We recognise cities as complex systems. The world’s most iconic cities, from New York to Barcelona, have built and rebuilt themselves as their underlying economic dynamics have changed over time. To enable such dynamism, in a rapidly evolving 21st century, urban planning in India’s cities will have to break from the past.

Key takeaways:

  1. Recognise the true extent of urban growth: By official definitions, India is either 26% or 31% urban. Alternative definitions indicate an urbanisation rate between 47% and 65%. This mismatch implies that millions outside of de-jure urban areas do not have access to services like fire fighting, street lighting and building code regulations that are essential for dense places. The failure to accurately measure and plan for urban growth is what creates urban sprawl, with areas of de-facto urbanisation with narrow road widths and haphazard growth that is difficult to correct for later on.
  2. Adopt a flexible, strategic planning process: Currently, urban planning is largely a top-down exercise that freezes land use for long periods. Cities’ land use requirements can change substantially with changes in their economic base, calling for flexibility through periodic reviews and iterations. Moreover, land use and infrastructure investments are currently made by a host of ULBs and parastatals that struggle to coordinate. A two-tier framework that delineates power between city and metropolitan levels can enable coordinated and integrated planning.
  3. Improve land utilisation in cities: Restrictive building regulations that were intended to control density have instead reduced formal built-up space, forcing people into slums, driving up housing prices and creating unplanned sprawl. India also has strict setback laws that have created large amounts of private open space at the cost of much-needed public space. Liberalising floor space regulations, adopting form-based codes and eliminating wasteful setback areas will eliminate market distortions and make more land available for streets and public open spaces.
  4. Enable the creation of housing across the income and size spectrum: Major Indian cities face massive housing shortages, especially in rental housing, whose share has fallen from 54% in 1961 to 28% in 2011. The shortages in housing and rental units are a result of labyrinthine regulations and approval processes, and distortionary rent control laws, respectively. Easing regulations, removing parking and elevator requirements, deregulating rents and making eviction proceedings easier can spur much-needed housing supply in Indian cities
  5. Invest in and integrate public transport networks: Indian cities are among the most polluted and congested in the world. Smaller cities generally lack transit systems and in bigger cities, transit infrastructure is often overburdened and in need of serious maintenance and repairs. The existing institutional set-up, with multiple disconnected authorities for different modes, precludes the implementation of integrated plans. Cities need to encourage mass transit as the primary mobility solution and integrate transit options by vesting this responsibility with a dedicated metropolitan transport authority.
  6. Empower and strengthen political leadership in cities: Indian cities are managed by state-appointed bureaucrats (not by directly elected local representatives) and very few officials have expertise in city management. As a result, city leadership is beholden to state politics and lacks expertise at the highest level. State legislatures need to start directly electing mayors, and give them broader decision-making powers to increase accountability and create better incentives for city government leaders.
  7. Increase capacity within Urban Local Bodies (ULBs): Local bodies face severe capacity constraints in terms of staffing and managerial skills. This hinders strategic planning and complicates simple processes that are essential for plan execution. ULBs need to begin by training their employees in financial and risk management, organisational matters, design and implementation of projects. Eventually, the recruitment framework needs to be reformed to hire an adequate number of employees with the requisite technical and administrative skills.
  8. Increase fund flows and provide revenue handles to urban local bodies: Most ULBS have weak finances due to inefficient property tax regimes and poor user charge collection. Poor service delivery has led to poor compliance in a vicious cycle of poor finances that perpetuates a low-level equilibrium. Since cities drive tax revenue through their growth, it is essential that central and state governments allot them a larger share of revenues, and devise mechanisms to provide untied grants. Reforming property tax regimes and focusing on better service delivery will help ULBs create stable revenue streams, which makes lenders more willing to finance long-term infrastructure development.

Why should you read this report?

‘Reforming Urban India’ sets forth an 8-point agenda to transform Indian cities into engines of sustainable economic growth that have the potential to meaningfully improve quality of life nationwide. Despite the pivotal role cities have played and will continue to play in the country’s economic growth, they suffer from serious neglect. Air quality and congestion are worsening, house prices continue to soar and amenities and services like clean water, public spaces, public transport and solid waste management are severely deficient. This report highlights key reforms to address the systemic dysfunctions – in land markets, planning regulations, governance structures and so on – that are holding cities back from creating inclusive prosperity, not only in India, but in other emerging economies.

This report identifies the most pressing challenges that Indian cities face today, and provides highly contextual recommendations for reform. In a world where 80% of global gross domestic product comes from cities, these reforms are crucial for creating sustainable economic growth and inclusive prosperity in India. Without meaningful changes, Indian cities will continue to be some of the most congested and polluted cities in the world - eroding productivity and impairing the quality of life of their citizens. These insights are also highly relevant and applicable to cities in other emerging economies that face similar challenges in congestion, basic amenity provision, public spaces, solid waste management and so on.

Who is this report for?

This report is recommended for a wide array of readers, including urban planners, government officials at both state and local levels, policymakers, researchers, climate change experts and advocacy groups. It serves as a comprehensive resource for gaining insights into the present state of urbanisation in India and the necessary reforms that will help Indian cities unlock their potential to spur economic growth and transform quality of life. As mentioned above, this report is also highly relevant for readers in other emerging economies.

🔗 Read the full report here. 🔗

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