Integrated urban planning needed to realise its full potential
By Dr. Gyan Pathak
Indian cities are suffering from five-fold bottlenecks that prevent them realizing their full economic potential. Those are lack of common economic vision, challenges related to land supply, unintegrated urban planning and industrial infrastructure, inadequate institutional framework and capacity, and business-related policy and regulatory constraints.
This is the finding of a report as part of Country Diagnostic Studies titled “Harnessing the Economic Potential of India's Cities” prepared by a team of Asian Development Bank and PricewaterhouseCoopers Pvt. Ltd on a request of the NITI Aayog to examine how India's cities can meet their full economic potential and thereby support India's states and Union Territories in achieving broad-based urban development.
The report was prepared after studying 12 cities in 7 states– Machilipatnam and Vijayawada in Andhra Pradesh, Guwahati in Assam, Navsari and Vadodara in Gujarat, Hisar and Sonipat in Haryana, Dewas and Indore in Madhya Pradesh, Gangtok in Sikkim, and Nalgonda and Warangal in Telangana.
Stakeholder interactions revealed that despite the diversity of the cities studied, they had in common many factors holding them back from realizing their full economic potential which can be divided in the five categories.
The first of them is lack of common economic vision. Without an economic vision to guide decision making at the level of a city (taken here to include neighbouring areas whose economies are closely intertwined), urban areas have grown without leaving sufficient space for rights-of-ways and provision of basic infrastructure that is essential for economic dynamism.
In fact, the absence of a city-level economic vision appears to be closely connected to several other bottlenecks identified in the stakeholder consultations. For example, without an economic vision, city master planning exercises tend to focus entirely on land-use and spatial and zoning regulations and do not inform infrastructure investment plans needed to realize economic goals.
Similarly, the absence of a well-articulated economic vision for the city implies that economic visioning exercises carried out at the state level by state industry and planning departments lack an explicit spatial dimension that can serve as an anchor for agencies focusing on urban development.
The second is serviced urban land is becoming increasingly scarce and competing claims are made on a finite supply. In addition, land acquisition on the urban periphery also triggers an economic transition from an agrarian-based economy to one that is increasingly dominated by secondary or tertiary industries. If this happens in an unplanned way, such areas tend to develop as an unmanageable sprawl devoid of basic facilities.
The third is absence of integrated master planning. Cities' master plans largely do not articulate development goals based on which actual investments and mixed-use developments can be planned and implemented. Thus, as cities evolve and expand, their master plans have remained mainly static and account inadequately for future demands for land use and allocations. This has led to inadequate planning of growth-enabling infrastructure.
The fourth is lack of institutional framework and capacity. Natural cities often cover multiple administrative units, sometimes spanning more than one district and multiple towns and many villages. Planning for economic development at this geographic scale clearly calls for cross-jurisdiction governance to effectively manage cities and their periphery. However, such governance is absent across the study cities.
Further, city governments play a limited role in influencing and coordinating the work of different agencies at the local level and even less in guiding economic development, despite the devolution of power to urban local bodies (ULBs) mandated by the 74th Constitutional Amendment. Instead, ULBs in India primarily deal with providing basic urban services and depend heavily on the state and central governments to finance infrastructure development and provide key social amenities.
They do not have the functions or responsibilities to attract investments, nor a mandate to provide the ancillary and supporting infrastructure for fostering local economic development. This has limited the capacity and ability of India's cities to actively direct and manage economic transformation, in sharp contrast to cities in a wide range of middle- and high-income countries, which tend to have much more say in functions related to economic development.
The fifth is business-related policy and regulation constraints. The policy and regulatory framework that firms face at any given location in India is influenced primarily by the central and relevant state governments. ULBs have played a limited role in contributing to the design of these incentives and programs because responsibility for local economic development largely does not rest with ULBs. However, one way city-level governments or ULBs can influence the business environment is by setting development norms to which businesses must adhere, thereby influencing the ease of starting and operating businesses, especially in various services subsectors. Strategies to make their city an attractive location for businesses seem to be largely missing. Addressing these issues is important to enhance the ease of doing business in Indian cities.
These five bottlenecks are likely to apply to most cities in India, the report emphasizes. However, some problem areas tend to be specific to certain cities. For example, locational disadvantages are more relevant for cities in hilly and mountainous areas or where climate patterns combine with topography to make a city prone to floods or droughts.
Similarly, the lack of a historical industrial base—due to distance from major historical transport networks and urban centres of the country—can act as a drag on economic growth, a situation that affects some cities to a greater extent than other cities.
Addressing the bottlenecks, the report suggested, requires an integrated approach to urban and economic planning. The five themes and goals around which such an approach can be designed and implemented, as well as the actions that hold promise in achieving the goals, are: To develop an economic vision; To supply land needed for development; To achieve integrated master planning aligned with economic goals; To strengthen institutional frameworks and build capacity; and to create a policy and regulatory environment conducive to business activity.
Implementing many of the actions is likely to entail some challenges, the report says. However, the economic payoff is likely to be immense and go a long way in enabling India to meet its aspiration of becoming a high-income economy by 2047. (IPA Service)
