India's Unplanned Urbanisation Is Far from 'Smart'

While the government talks about smart cities, the reality of India's urbanisation is a web of increasing inequalities and powerless local authorities.

Dharavi, Mumbai. Credit: M M/Flickr CC BY-SA 2.0

Dharavi, Mumbai. Credit: M M/Flickr CC BY-SA 2.0

India is projected to add 404 million people to its urban population between 2014 and 2050. The annual growth in urban population in India between 2010 and 2015 was 1.1% – the highest among the major economies, according to the UN World Urbanisation Prospects report 2014. Indian cities already contribute more than 62% to our national GDP.

At a time when the idea of a ‘smart city’ dominates policy discourse, India is faced with a very real urbanisation challenge. The socio-spatial hierarchy in the country’s ever-expanding cities is growing deeper, even as inequalities of income, access and opportunities remain un-arrested. Marginalisation and ghettoisation remains appallingly commonplace in Indian cities, particularly in Tier I cities where rural-to-urban distress migrants end up in large numbers. As François Bourguignon, emeritus professor of economics at the Paris School of Economics, said recently in an interview, inequality in urban India is rising much faster than in rural India. The consequences are large. According to a 2014 research paper presented at a Population Association of America conference, “…poor health and inequality in urban India reduces human capital attainment and productivity, increases social fragmentation, and threatens sustainable development.”

The economic dimensions of India’s urbanisation challenge are large, but the social and cultural factors resulting from the sudden urban demographic bulge also present a daunting challenge. It is believed that much of the socio-economic upheavals look potentially surmountable through poverty alleviation and job creation. It is in this context that one must identify the pillars of a sustainable urban dispensation.

Urban poverty and its many manifestations

The ever-growing Indian cities are also emerging as poverty centres. Two Indian metros, Delhi and Mumbai, were among the ten largest urban agglomerations in the world in 2014, while another, Kolkata, is set to be among the world’s top 15 by 2030, according to the UN.

There were 0.9 million homeless people in urban India as per the Census data of 2011, in addition to a slum population of roughly 65 million (or 17% of urban India). People from India’s distressed rural areas, home to 833 million people, are migrating in large numbers to urban centres. Migrants make up a sizeable chunk of India’s urban population, last recorded at 35% by the National Sample Survey Organisation in 2007-08. On a globally comparable index developed by the UN, the proportion of urban population living in slums in India is in fact higher.

Affordable housing is at the heart of building inclusive cities. India’s ambitious ‘Housing for All’ project aims at providing a home to every poor urban household by 2022. More than 90% of the housing shortage in urban India is faced by economically weaker sections and low-income groups, according to government data. At the same time, 7.5 lakhs apartments remain unsold across the Mumbai Metropolitan Region, the National Capital Region, Bengaluru, Pune, Chennai, Hyderabad and Kolkata, indicating the high demand-supply mismatch. While demand is mostly in the affordable housing segment, the supply is high in the higher-price segments. In addition, McKinsey in 2014 estimated that 33% of existing houses in India are of sub-standard quality.

Water supply and sanitation facilities are crucial to the sustenance of urban life, regardless of income status. As of today, piped water, which is anyway available to only about half of the urban population, is never distributed for more than a few hours per day. The amount of Non-Revenue Water, which basically means water unaccounted for (i.e. leakages, stealing, unauthorised connections, collection inefficiencies, etc.), is incredibly large, at anywhere between to 40% to 70%. One is only reminded of the same situation with power transmission and distribution losses in urban India (estimated at 27% by ICRA). Only about 18% of slum areas have precarious access to piped water. Non-notified slums (which amounts to 60% of all slums) are completely deprived of water supply.

Households who can afford it are often forced to spend on unsafe substitutes (thus inflating bills), while others have to do make do with poor quality water supply and sanitation services. It is the urban poor which suffers the most as the rising costs of inefficiencies in services are passed on to customers.

As per 2005-06 National Family Health Survey, only about 47% of the slum population has access to basic sanitation facilities (flush or pit), which means about 35 million people in urban India – akin to the population of Canada – are living in unsanitary and potentially hazardous conditions. Of the total urban population, about 83% have access to sanitation facilities.

State of our city governments

Following the 74th amendment to the constitution, constitutional status has been vested upon urban local bodies (ULBs) and specific civic responsibilities allocated to them. Schedule 12 of the constitution provides a list of subjects under the purview of ULBs. The list includes urban planning, regulation of land use, construction of buildings, roads and bridges, water supply, sanitation and solid waste management, environment, and the provision of urban public amenities and conveniences. These cover two of the most crucial components of successful urbanisation: infrastructure and basic amenities/services.

However, the state of our civic bodies remains sordid. With near zero financial autonomy, they are reliant on state governments. In fact, any empowerment of the ULBs remains a function of states’ agency.

The 13the Finance Commission first recommended a fixed percentage share of the central divisible tax pool for ULBs. However, that share remains below 2% and is converted into ‘grant-in-aid’ so as to conform to the constitution that underscores the primacy of state governments in local matters. Thus, administrative devolution – in addition to financial devolution – remains half baked. The 14th Finance Commission, citing lack of mandate, desisted from making further reforms with regard to ULBs.

A global comparison of municipalities is revealing. While the share of local governments in total Chinese government revenue is 25%, the share in India is 3%, indicating the parlous state of finances in India’s mushrooming urban habitats.

The share of property tax, which is the mainstay of municipal revenues in India, in the country’s GDP is lower than the global average, even than that of its BRICS counterparts.

Given the poor collection of funds, financial dependence on higher tiers of government is a perpetual reality for ULBs in India. Accordingly, the share of central transfers in total revenues of ULBs is high.

Expenditure-wise too, India’s local government spending is way below comparable economies. The OECD publishes data with respect to local government spending (as a share of GDP), but does not include data on China and India.

But according to the country’s Ministry of Finance data, China’s local government share in total government expenditure in 2009 was 64.7%. This comes out to be 8.66% of GDP in that year, which is among the highest globally, along with the likes of Canada and some EU countries.

The available Indian data on local government expenditure does not incorporate rural local bodies. According to the 13th Finance Commission report, ULBs’ expenditure as a share of GDP was 1.54 % in 2007-08. Since data for combined local government share is unavailable for India, it makes sense to consider analogous data by considering the expenditure of ULBs as a share of urban GDP (which is 62 % of total/national GDP, last estimated). This share calculates to about 2.48% during the given year.

There is a case for empowering municipalities while allowing for periodic upward revision of fiscal transfers commensurate with their increasingly important role in the economy. This can potentially involve a constitutional amendment to carry forward from the ones enacted in the 73rd and 74th amendments (1992), which begun the process of local government empowerment.

The government, in fact, acknowledges the gravity of the situation. The report of the Working Group on Capacity Building for the 12th Five-Year Plan noted that “the low percentage of revenue and expenditure in ULBs is hurting the competitiveness of cities.” This is highly relevant at a time when the government has finalised a hundred Smart Cities in several parts of the country.

Quality of living

For those with a stable roof over their heads, quality of living is also impacted by the overcrowdedness that Indian cities face. Already, population density in Indian cities is ludicrously high. According to UN data on population density (people per square kilometre), Indian cities are among the most densely populated in the world.

Another figure worth looking at is vehicular population. Most Indian metros are generally a traffic nightmare, especially during rush hours. Indian cities have low vehicle per capita, given the huge population and low per capita incomes. But while India’s road network grew at an annual rate of 4% since 1951, the number of vehicles plying on our roads has increased at a rate of nearly 11%. This inevitably leads to choking of roads and increasing pollution. On a global comparison, India’s vehicle per kilometre of road is also among the lowest in the world ranked at 129th among a list of 141 countries. This data crucially excludes two-wheelers. According to recent Ministry of Road Transport and Highways data, two-wheelers (scooters, motorbikes) accounted for as much as 71.8% of the 141.8 million vehicles plying in 2011. One can imagine what vehicular density will look like in India once a globally comparable index is arrived at with two-wheelers accounted for.

Directly related to the vehicle growth are the levels of pollution in Indian cities and towns.

One must remember that even in a developing economy, pollution is not a rich man’s problem. The direct and most lethal implications of pollution in the air are felt by the poorer segments of people in the urban informal sector, consisting of labourers, auto drivers, rickshaw wallahs, thelawallahs and other such professionals who are constantly exposed to atmospheric pollutants. Construction workers, largely migrants and constituting a big share of the total informal sector low-income group, are exposed to the worst forms of pollution impacting health and quality of lives.

Data published by the WHO reveal that seven of the world’s 11 most polluted cities are in India.

The transport sector is estimated to contribute up to 70% of total pollution in major Indian cities. The vehicle (particularly private car and two wheeler) boom against a slowly-growing road network also means heavy traffic slowing down vehicles. This further adds to pollution, as slow moving and idling vehicles are known to emit much higher pollution levels than fast-moving ones.

With development enjoyed by a select few, urban India has emerged as a hotbed of violence and criminal activity, often suspected to be a direct upshot of urban deprivation and squalor. An undercurrent of a raging class war is apparent in the fast-paced, migrant-filled cities of 21st century India. The potential for a major tear in the social fabric of India’s urban geography is considerably large. Add to that inefficient ULBs, unplanned and precarious construction, half-baked public transport, unbreathable air, crippling traffic snarls, vulnerable populations, dehumanising slums, inequality of growth, rising crime, underemployment and disguised employment, and what we have is an urbanisation that is dangerously chaotic and hardly smart.

Abhirup Bhunia is a political economist by training, and has worked with think-tanks, advisories and in development consulting.