By KR Sudhaman, Dec 6, 2011, Source
A MERE additional spending of 0.25 per cent of India’s GDP over the next 20 years is enough to provide drinking water, sanitation and sewage to all 8,000-plus towns and cities in the country. India’s GDP is presently surging towards $2 trillion mark.
This is what is claimed by Aromar Revi, the director of the newly set up Indian Institute of Human Settlements, a non-profit making Bangalore-based organisation promoted, among others, by Nandan Nilekani, Deepak Parikh, Jamshyed Godrej, Keshuv Mahindra, Kishore Mariwala, Vijay Kelkar and Rakesh Mohan.
By 2030 two-thirds of India’s population will be living in urban areas. They will need infrastructure. Finding the money required – as assessed by the institute – to set up infrastructure is not difficult, says Revi. It is the cost that goes into one or two metro transport projects.
In per capita terms, India’s annual capital spending on urban infrastructure, including road and transport, is just $17, which only 14 per cent of China’s $116 and under 6 per cent of New York’s $292. New research by the McKinsey Global Institute released a few months ago has said that urban India needs to spend $134 per capita per year till 2030 — almost eight times what it invests now.
Overall, India needs to inject an additional $1,200 billion of capital spending into its cities between now and 2030. This will include investment in housing and mass-transit system.
The McKinsey report has said that such a huge investment programme is needed to ensure that India is able to provide 150 litres per capita of water supply, full coverage and treatment of sewage and waste management, a public-transit-led mobility system (including 8,400 km of metros and subways) and 38 million affordable houses for the poor.
Concentrations of poverty are associated with slums, leading to the assumption that large cities with million-plus populations and visible slums have higher concentrations of poverty. Million-plus cities are indeed home to 40 per cent of the slum population. However, the majority of the poor are, in fact, concentrated in medium and small towns – 80 per cent of the urban poor reside in cities with populations under a million.
India has 53 cities with over one million population. As of 2010, more than 30 per cent of urban households’ only access to a latrine was through shared or community toilets. Nearly 20 per cent of non-notified slums and 10 per cent of notified slums had no access to a latrine. Nearly 94 per cent of India’s cities do not have even a partial sewerage network and less than 20 per cent of the road network has storm water drains.
Revi told Financial Chronicle that the first and foremost task was to do a detailed mapping of the cities and towns. “Barring Delhi, which has done a good job of mapping, no other Indian city has such detailed mapping,” he said. Mapping will help provide basic amenities like water, sanitation and drainage.
Though the majority of revenue came from top 10 or 20 cities, the amount of money government spends on their upkeep and development is negligible. The major source of revenue of municipalities is house tax, and collections are never enough to meet even the regular maintenance of existing infrastructure.
Estimates by Central Statistical Organisation (CSO) indicate that urban share of GDP increased from 37.7 per cent in 1970-71 to 52 per cent in 1999-2000.
The mid-term appraisal of 11th plan put the urban share of GDP at 62-63 per cent in 2009-10. The document projects this share to increase to 75 per cent in 2030. A high-powered expert committee for estimating the investment requirements for urban infrastructure services proposed an almost 35 time increase in overall investment in urban areas as compared to investments made under Jawaharlal Nehru National Urban Renewal Mission.
Launched in December 2005, the mission prioritises the development, management and financing of infrastructure sectors by providing significant grants. The mission has a reform-oriented approach for comprehensive development linked to infrastructure investment and basic service delivery.
The mission has two windows of opportunities: one for 63 urban local bodies and the second for other cities through the urban infrastructure development scheme for small and medium towns. Total grants amounting to about Rs 50,000 crore ($11 billion) have been earmarked for seven years (2005-12) for the purpose.
These in turn are expected to mobilise total investment of about Rs 1,20,000 crore ($26 billion) in urban infrastructure. A shift in the proposed sectoral composition can be seen with almost 60 per cent of investment to be made in the transportation sector. The focus of the transport projects, however, remains on roads.
The recommendations of the institute headed by Revi suggest that substantial funds continue to be allocated to the larger cities.
The expert committee has made projections for the period from 12th plan to 15th plan, that is from 2012 to 2031. Given the volatility of land prices, the estimates do not include the cost of land acquisition. The investment in urban infrastructure over the 20-year period is estimated at Rs 39,20,000 crore at 2009-10 prices. Of this, Rs 17,30,000 crore (or 44 per cent) is accounted for by urban roads.
The backlog in this sector is large, ranging from 50 per cent to 80 per cent across cities. Sectors delivering urban services like water supply, sewerage, and solid waste management will need Rs 8,00,000 crore (or 20 per cent).
