SynopsisGoI’s missions focus on building capacity among urban local bodies (ULBs), while leveraging new technologies and creating market finance accessibility for our cities. AMRUT has consolidated the emerging potential for development presented by the success of other missions under GoI.
From 2004 to 2014, the total expenditure on urban development was about Rs 1.57 lakh crore. Over the past six years, this figure has been Rs 10.57 lakh crore. A 2010 McKinsey report (mck.co/3aat7wa) estimates that by 2030, 40% of India’s population (590 million Indians) is expected to live in cities. To cater to this growing urban population, India has to build 700-900 million sq m of urban space every year until 2030 — a new Chicago-sized space every year from now till 2030.
This also means 70% of the India of the future is yet to be built. The challenge, and opportunity, is not only to transform our cities into robust economic behemoths but to also improve the living conditions of millions over the next decade.
On December 2, Uttar Pradesh Chief Minister Yogi Adityanath attended the bell-ringing ceremony at the National Stock Exchange (NSE) in Mumbai, as municipal bonds worth Rs 200 crore were listed for issuance for the Lucknow Municipal Corporation (LMC). The issuance was oversubscribed 2.25 times and, at a yield rate of 8.5%, it is the second-lowest rate for a municipal issuance in the country.
Lucknow has now become the ninth Indian city to raise municipal bonds, the first from northern India since the launch of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) in June 2015. LMC will get about Rs 26 crore as an upfront incentive of around 2% to subsidise its interest burden from GoI. Till now, over Rs 3,690 crore have been raised by nine cities and many are in the process of following.
This will help improve financial and municipal governance, orient cities towards self-sufficiency, and provide the necessary support for developing civic infrastructure. From the times when municipal corporations were bankrupt, had no wherewithal or capacity to raise funds, had little inclination or capability to collect taxes, and had extremely low service delivery standards, the demonstrated capacity to float municipal bonds and raise finances represents a sea change.
GoI’s missions focus on building capacity among urban local bodies (ULBs), while leveraging new technologies and creating market finance accessibility for our cities. AMRUT has consolidated the emerging potential for development presented by the success of other missions under GoI.
One crucial reform, the credit rating of mission cities, has been taken up because ULBs of mission cities need to raise funds from additional sources, including borrowings from capital markets and private investors, for financing different urban improvement projects.
Till date, credit rating work for 485 AMRUT cities has been commissioned, of which the job has been completed for 469 cities. Out of these, 163 cities have received an Investible Grade Rating (IGR), with 36 cities spread across 12 states and Union territories getting an A– or above rating. Incentivising issuance of municipal bonds by ULBs is encouraging them to raise financial resources that will help in improving the necessary civic infrastructure, build local expertise, and provide new avenues from public-private cooperation.
Such milestones on the urbanisation front can’t be looked at in silos. Apart from work being undertaken to create market finance accessible for Indian cities, GoI has made the Online Building Permission System (OBPS) operational in 2,057 cities to facilitate ease of doing business (EoDB) in construction permits through paperless approvals and building permissions. To further build capacity, The Urban Learning Internship Programme (TULIP) and Smart Cities Innovation Challenge have also been introduced.
As a result, India’s EoDB rank in construction permits has jumped 158 spots from 185 in 2017 to 27 in 2020. The Integrated Command and Control Centres (ICCCs) built under the Smart Cities Mission (SCM) are being used as crisis management rooms during Covid-19 in 47 cities.
This has become a model of how technological solutions like GIS (geographic information system) mapping and telemedicine services can be used to tackle such future public health emergencies. Covid-19 has also brought the importance of civic cleanliness and hygiene to the fore, the Swachh Bharat Mission helping people make programmatic interventions and maintain citizen led networks. As the programmatic interventions mature, guaranteeing a dignified, safe and healthy future for all citizens, the best is yet to come.
The writer is minister of state (independent charge) for housing and urban affairs, GoI