MEDS-043

Dynamics of Urban Planning

and Development
Indira Gandhi National Open University
School of Extension and Development Studies

Block

2
URBAN DEVELOPMENT PLANS, POLICIES AND
PROGRAMMES
UNIT 1
Urban Development Policies: A Global Overview 5
UNIT 2
Urban Development Policy Perspectives in India 19
UNIT 3
Urban Development Programmes in India 39
PROGRAMME DESIGN COMMITTEE
Dr. P.K. Mohanty Prof. K. V. K. Rao
Additional Secretary, Ministry of Urban Affairs Dean, Infrastructure Planning Support
New Delhi IIT, Mumbai
Prof. O.P. Mathur Prof. V. Jaganatha
National Institute of Urban Affairs State Institute of Urban Development, Mysore
New Delhi
Prof. P.P. Balan
Prof. Chetan Vaidya Kerala Institute of Local Administration
National Institute of Urban Affairs Thrissur.
New Delhi
Prof. Amita Bhide
Prof. Sanyukta Bhaduri Tata Institute of Social Science, Mumbai.
School of Planning and Architecture
New Delhi. Prof. Usha Raghupati
National Institute of Urban Affairs
Prof. S. Janakrajan New Delhi
Madras Institute of Development Studies
Chennai. Mr. Ajit P. Khatri
Architects & Town Planners Association of India,
Prof. M. P. Mathur Mumbai
National Institute of Urban Affairs
New Delhi. Prof. Pravin Sinclair, PVC, IGNOU, New Delhi

Prof. K.K. Pandey Prof. E. Vayunandan, IGNOU, New Delhi

Indian Institute of Public Administration Prof. B. K. Pattanaik, IGNOU, New Delhi
New Delhi.
Dr. Nehal A. Farooquee, IGNOU, New Delhi.
Prof. Bijoyini Mohanty
Utkal University, Bhubneshwar Dr. P.V. K. Sasidhar, IGNOU, New Delhi

COURSE PREPARATION TEAM

Unit Writers Editing
Prof. Amita Bhide (Unit 1) Prof. O.P. Mathur (Content Editor)
TISS, Mumbai National Institute of Urban Affairs
Mr. T.K. Bose (Language Editor)
Prof. V. Dhar (Unit 2)
New Delhi
NIUA, New Delhi
Prof. B. K. Pattanaik, IGNOU, New Delhi
Dr. Debolina Kundu (Unit 3)
Dr. Nehal A. Farooquee, IGNOU, New Delhi
NIUA, New Delhi
Dr. P.V.K. Sasidhar, IGNOU, New Delhi
Dr. Grace Don Nemching, IGNOU, New Delhi

Programme Coordinators : Dr. Nehal A. Farooquee, Prof. B.K. Pattanaik, Dr. P.V.K. Sasidhar
Course Coordinator: Prof. B.K. Pattanaik, E-mail:[email protected]
PRODUCTION TEAM
Mr. Jitender Sethi Mr. Babu Lal Rewadia
Asst. Registrar (Publication) Section Officer (Publication)
MPDD, IGNOU, New Delhi MPDD, IGNOU, New Delhi

June, 2013
 Indira Gandhi National Open University, 2013
ISBN:
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BLOCK 2 URBAN DEVELOPMENT PLANS
POLICIES AND PROGRAMMES

It is well known fact that the percentage of urban population in the globe has
crossed the fifty percent mark few years back. We now live in an urban world
with lot of disparity and contradictions in the developed and the developing
world. The developing world is confronting urban development as a phenomenon
amidst widespread poverty, unemployment, lack of basic infrastructure and a
number of environmental issues. Further, there are wide variations in the urban
development trajectories among the developing countries too. Now there is also
a growing concern and interest on seeing that urban development policies, plans
and programmes are in conformity with the ground realities of the place. This
block will discuss about the urban development policies worldwide and will
give an overview of policies in India.

Unit 1, Urban Development Policies: A Global Overview, discusses the existing

wide variations in the urban development trajectories between the developed
and developing countries. The unit also discusses the existence of different
approaches to urban development as adopted by different countries. It analyses
the urban development policies of the developed countries like USA and UK
and provides an overview of urban development policy perspectives of a few
developing nations, i.e. China, Brazil and South Africa.

Unit 2, Urban Development Policy Perspectives in India, deals with the

development policy perspectives India has adopted for the development of its
urban areas. It is more significance due the fact that India’s urban population is
likely to reach 575 million by 2030 (40.90 percent of total population). The
importance of India’s urban sector is indisputable, and the urban sector’s
contribution to India’s net domestic product is estimated at between 50 to 52 %,
while at the same time, 64.7 % of employment in trade, commerce, and financial
services; 65 % in manufacturing and 68 % in the transport sector are concentrated
in urban areas.

Unit 3, Urban Development Programmes in India, discusses various urban

development programmes launched by the government of India since
independence. It has also given a detailed description of JNNURM a recently
launched urban development programme in India.
Urban Development Plans,
Policies and Programmes

4
 Urban Development
UNIT 1 URBAN DEVELOPMENT POLICIES: Policies: A Global Overview

A GLOBAL OVERVIEW

Structure
1.1 Introduction
1.2 Changing Global Perspectives on Urban Development
1.3 Urban Development Policy Perspectives in USA
1.4 Urban Development Policy Perspectives in China
1.5 Urban Development Policy Perspectives in Brazil
1.6 Urban Development Policy Perspectives in South Africa
1.7 Drawing Lessons
1.8 Let Us Sum Up
1.9 References and Selected Readings
1.10 Check Your Progress-Possible Answers

1.1 INTRODUCTION
In1995, the world passed through a decisive phase. For the first time in history,
the percentage of urban population in the globe crossed the 50 percent mark. We
now live in an urban world. However, the meaning of urban is very different in
the developed and the developing world. The developing world is confronting
urban development as a phenomenon amidst widespread poverty. It looks towards
urbanisation as a path to economic growth and development. Further, there are
wide variations in the urban development trajectories among the developing
countries too. There is a lot that one can learn from a study of these different
approaches to urban development. It enables one to reflect upon the development
choices of our own country. China, Brazil and South Africa in particular, are
countries that are seen as newly emerging economies in the world along with
India. These are all countries that had extremely low levels of urbanisation at the
turn of the twentieth century. At least two of these, South Africa and Brazil have
had a prolonged experience of colonisation. Thus they have a lot in common and
hence the differences in development choices are even more interesting to study.
After studying this unit, you should be able to:
• Explain the changing global perspectives of urban development
• Describe features of urban development in Brazil, China, South Africa

1.2 CHANGING GLOBAL PERPECTIVES ON

URBAN DEVELOPMENT
Till the mid half of the twentieth century, urbanisation was considered a
concomitant of the development process and in particular, the state of
industrialisation of society. The urbanisation of the Western or the developed
world was seen as the norm and by those standards; the urbanisation, which was
occurring in the developing countries was seen as ‘over urbanisation’.
Urbanisation was seen to be disproportionate to the state of industrialisation.
5
Urban Development Plans, The high population growth of these cities which was non commensurate with
Policies and Programmes
the development of infrastructure was seen as a problem. The solutions offered
were more balanced, even growth and rural industrialisation.

This outlook changed towards the end of the twentieth century. Urbanisation
began to be recognised not as a problem but as a positive force that was capable
of driving economic growth. This changed perspective is clearly reflected in the
World Development Report of 2009. The report titled ‘Shaping New Economic
Geography’ argues that unevenness of development is a natural process. Given
the concentration of innovation, knowledge in the urban areas, these areas are
bound to develop and attract further investment thereby becoming growth centres.
It sees migration as a positive force which evens out the impacts of growth over
a period of time. This changed outlook on urbanisation is currently influencing
many developing countries across the world to pursue aggressive strategies of
urbanisation, seeking to make their cities more competitive and able to attract
investment that has now become transient across national borders.

It is interesting to note that the axis of urbanisation which was in the West in the
nineteenth and twentieth century has now shifted towards the East and the Global
South. The earlier problems of poverty, underdevelopment, still persist but some
of these countries have charted impressive growths in the last few decades.
Developments in the BRICS (Brazil, India, China, and South Africa) in particular
have attracted global interest. Almost all of these countries have focused attention
on urbanisation as a key strategy of development. All these countries are part of
the developing countries and though there are several clear differences in their
regimes, governance systems, starting points on urbanisation; there are several
lessons that they offer for us. This is the backdrop of the stories of urbanization
in China, Brazil and South Africa that followed.

1.3 URBAN DEVELOPMENT POLICY

PERSPECTIVES IN USA
USA does not have a specific urban policy, however, it has strategically addressed
the urban development issues. The main thrusts are poverty reduction, social
justice, ensuring employment, infrastructure networks and housing. The USA
urban policy can be broadly categorised into five phases (Harvey, 2008):
i) Carter Urban Development Policy (1977-1981);
ii) Reagan Urban Development Policy (1981-1989);
iii) George H. W. Bush Urban Development Policy (1989-1993);
iv) Clinton National Urban Policy Report 1995; and
v) Current Urban Development Policy.
I) Carter Urban Development Policy (1977-1981): The deterioration of urban
life in the United States is one of the most complex and deeply rooted
problems of this age. The Federal Government has a clear duty to lead the
effort to reverse that deterioration, these efforts are: (i) the leadership will
deal with complex and deeply rooted problems; (ii) federal efforts alone
will never be enough, everyone has a role; and (iii) if one has to preserve the
special values of urban, suburban, and rural life, one must recognize that
6 these values are interdependent. To a greater extent, than ever before, the
 future of cities and the destiny of the Nation are joined. This link is now Urban Development
Policies: A Global Overview
recognized by almost every American. Yet, throughout most of its history,
America has been ambivalent about its cities.

II) Reagan Urban Development Policy (1981-1989): Some of the Prospective

of Regan Urban Development Policy are: (i) considered by many to be a
retreat from proactive inner city revitalisation (ii) built on the premise of
efficient national economic growth and allowing private enterprise to facilities
revitalisation in distressed areas with minimal public sector involvement
(iii) mix and quality of public services should be made by informed administrations
at the state and local level (iv) economic investment was key, not social
investment, and (v) retreated from a city explicit policy basis.

III) George H. W. Bush Urban Development Policy (1989-1993): The focus

was on housing policy, affordability and tax relief rather than holistic urban
development policy.

IV) Clinton National Urban Policy Report 1995: Some of the important
features of Clinton Urban Development Policy are: (i) maintaining fiscal
integrity (ii) middle class tax relief (iii) expanding opportunities to all (iv)
expanding access to metropolitan opportunities (through leveraging private
investment and jobs, not infrastructure) (v) ensuring access to financial capital
(vi) expanding homeownership opportunity (vii) freedom from fear; and
(viii) empowerment zones and enterprise communities.

V) Current Urban Development Policy: Some of the important urban policy

perspectives of current government are as follows:
i) Strengthening Federal Commitment to cities:
a) create a Whitehouse office on urban policy.
b) fully fund the community development block grant.
ii) Stimulate Economic Prosperity in Metropolitan Regions:
a) support job creation and access to jobs;
b) enhance workforce training;
c) increase access to capital for underserved businesses;
d) create nation network of public-private business incubators;
e) convert manufacturing to clean technology;
f) strengthen core infrastructure;
g) invest in skilled clean tech workforce;
h) housing;
i) tax reform, access to affordable credit; and
j) increase supply of affordable housing through trust funds.

1.4 URBAN DEVELOPMENT POLICY

PERSPECTIVES IN CHINA
In 1950, when the people’s republic of China was formed, the level of urbanisation
was just 10 percent. For four decades after that, rural development and social
7
Urban Development Plans, transformation was a priority for China. Thus even till 1990, the level of
Policies and Programmes
urbanization was just 20 percent. However, after 1990, the country’s approach
towards urbanization has changed rapidly. Thus by 2000, urbanization had
increased to 36 percent and by 2007, it had reached 46 percent. Some of the
cities in China like Beijing have an urban tradition that spans millennia, while
there are several others where urban development has been rapid and has
transformed erstwhile villages and small towns into booming cities in a span of
just a decade or so.

The country’s urbanisation history is rather uneven. The period of the Great
Leap Forward (1958-1960) and the Cultural Revolution(1966-76) were two
periods in particular where there was a very strong attempt to reverse an urbanising
tendency through deliberate population movement to rural areas and
encouragement of rural development policies. This period also witnessed the
strengthening of the system of Hukou (a household registration system for key
benefits) which acted essentially as a block to geographical mobility. The period
of reform which followed in 1980 onwards saw the opening of Chinese borders
to Foreign Direct Investment through the setting up of Special Economic Zones
and a concomitant creation of cities. This pattern has continued through the turn
of the century to unleash a period of unprecedented economic growth and
urbanisation.

During post reform period, cities have played a central role in China’s social and
economic development. In 2001, urbanization (Chengzhenhua in Chinese) was,
for the first time, written into the 10th Five Year Plan (2001-2005) as an explicit
development strategy. In 2001, cities and towns accounted for half of the national
industrial output, 70 per cent of GDP and 80 per cent of all national tax revenue.
Some 90 per cent of higher education and scientific research resources were
located in cities and town (Human Settlement Group, IIED, UNFPA, 2011).

As noted in the Outline of the 10th Five Year Plan

“…….. enhancing the level of urbanization and shifting rural population
benefits an increase in peasants’ income, enlarges the consumer market,
optimizes the rural/urban economic structure…… with the advance of
productivity in the agricultural sector and acceleration of
industrialisation, the time is ripe for the promotion of urbanization and
we should not miss such a chance to implement the strategy of
urbanisation.”
(Human Settlements Group IIED, UNFPA, 2011)

Urbanisation was viewed as a stimulus for economic growth and a solution for
rural-urban disparities. The significance of urbanisation was reiterated in the
11th Five Year Plan (2006-2010). The resolution to promote further urbanization
was confirmed, with emphasis on a healthier development trajectory:

“…….. adhere to the coordination of the development of large, medium

and small size cities and towns; enhance the carrying capacity of cities
and towns; promote urbanisation actively and steadily to transform the
dual rural/urban structure under the principles of step by step, saving
land, intensive development and rational distribution.”
(Human Settlements Group IIED, UNFPA, 2011)
8
Given this backdrop, it may be easy to assume that China’s urbanisation story Urban Development
Policies: A Global Overview
has been led by the centralisation of governance. On the contrary, the urban
growth in China is local. It has been spurred by the enterprise of local bureaucrats
and the freedom with the city governments to take several decisions with
implications for local economic growth. Each city in China thus competes with
each other for opportunities of economic growth. They have pursued distinct
trajectories towards the same. According to the McKinsey report (2006), the
bulk of China’s urban population resides in industrializing cities whose main
challenge is to attract labour intensive industries and pull people out of poverty.
There are other cities that are slowly transforming from an industrializing
economy to one that is more specialised. Finally, there are only a handful of
cities that have become modern cities. In these varying trajectories, cities employ
a wide variety of tools to attract investment. These include facilitating land supply,
using infrastructure development as a driver for economic growth, offering
incentives for investors, loosening of migration policies and investing in
technology development through a synergy between academic institutions and
industry.
This rapid growth has human and environmental costs. The first is the unevenness
of growth where the East coast has become the prime beneficiary while Western
and Southern China remains underdeveloped. The second is the disenfranchisement
of several thousand migrants to cities who work in cities but are denied other
civic rights and the consequent separation of families wherein children stay in
villages while parents work in cities. The thought of sustainability and justice, of
conservation is muted and several cities face challenges of natural resources but
these considerations are seen to be rising in the transforming cities. The potential
in the Chinese story of urbanisation is however in the entrepreneurship and
capacity for pragmatic solutions in city governments to deal with issues that
confront them. The story of Chinese urbanisation is thus where there are several
innovations, many of which are undocumented but all of these are nonetheless
interesting ideas of how urban development can be an engine for economic
growth.

1.4.1 Case Study of Shenzhen

Till 1983, Shenzhen was a sleepy fishing village in the Pearl River Delta. China’s
first SEZ (Special Economic Zone) was set up here in 1979. In late 1980, its
population was 94,000 rising up to 8.3 million in 2005. It has an annual growth
rate of 19.6% with 80% of its current population being migrants. Its status as the
SEZ meant a strong Central Government support for infrastructure creation, ability
to offer considerable incentives to investors and a favourable geographic location
in proximity to Hong Kong. The first few years saw massive investments of FDI
in Shenzhen for high intensity low cost labour industries. However this began to
decelerate in 1990s. This is when Shenzhen rediscovered itself as a centre for
financial services, high technology and logistics. The continuous high growth
has generated several pressure points- availability of land and high density,
availability of water and electricity, high levels of pollution and availability of
educated and skilled labour. The city has coped with this through transformation
of the city centre and its redeployment for high tech industries, through additions
to the water and electricity supply and through the extension of some of the most
extensive policies towards migrants seen in China. These however continue to
be areas of challenge for the city which epitomises China’s transformative
urbanisation. 9
Urban Development Plans, In this section you studied the changing global perspective on urban development
Policies and Programmes
and urban development in USA and China. Now, you should be able to answer
the question relating to this section given in Check Your Progress-1.

Check Your Progress 1

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What is the current urban development policy of the Obama government in
the USA?
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2) What are the features of urbanisation in China?
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1.5 URBAN DEVELOPMENT POLICY

PERSPECTIVES IN BRAZIL
Brazil is South America’s largest country, occupying nearly half the continent;
and with a population of 187 million, it is the fifth most populous country (and
the fourth most populous democracy) in the world. Brazil has urbanised rapidly
over the past few decades. According to a 2000 census, over 80 percent of the
population lives in urban areas. However, much of this urbanisation has been
unequal; population has grown around state capitals and neighbouring
municipalities of larger metropolitan areas, while other regions have experienced
negative growth rates. The result has been pockets of poverty with increased
social exclusion and environmental hazards. Brazil began as a federated republic
in 1889. Throughout the twentieth century, the country experienced periods of
development where the government sought to manipulate urban space to shape
society. Post-Brasilia, from 1964 to 1985, the country was under the rule of
military leaders, and until 1990 there were no popular elections for President.
However, beginning in the late 1970s, Brazil gradually returned to democratic
rule, and in 1982, direct elections were held for state governorships. This process
of re-democratisation has actively shaped the nature of urban development policies
in Brazil.
10
The process of re-democratisation expanded the political arena to include diverse Urban Development
Policies: A Global Overview
sections of society who demanded urban reform through active struggles. The
struggle for urban reform began in the 1960s, when progressive sectors of
Brazilian society demanded structural reforms to the legal regulation and use of
public land. The main issue was agrarian reform in the countryside. However
the military coup of 1964 gave rise to an authoritarian political system (lasting
until 1984) which did not allow these reforms to be carried out. Urban reform
issues reappeared in the 1970s and 1980s during a period of slow and gradual
political openness in which social movements slowly gained greater visibility
and political weight, and were able to construct an autonomous discourse and
social practice. The movement’s demands were presented as rights in an effort to
reverse social inequalities on the basis of a new social ethic. At the time, Brazil’s
urban landscape had undergone significant changes. Marked by a high rate of
rural-urban migration between 1940 and 1991 during which time the urban
population increased from 31.2% to 75% of the country’s total population.
Brazilian cities grew without basic infrastructure. Major consequences resulted,
especially the spatial segregation of neighbourhoods which were largely neglected,
lacked the basic conditions for adequacy and developed with the complicity of
the public authorities.

In 1988, the struggle for urban reform was taken up again. In the beginning, the
movement’s struggle was focused on local issues, such as demands for housing.
However, by the end of the military regime, it had begun to incorporate ideas of
the right to a more social life: the idea of the city, the city of all people, a home
beyond one’s house, a home accessed by paved roads, public services, schools,
and transportation. In 1986, the National Urban Reform Movement defined the
concept of urban reform as a new social ethic which rejects the use of the city as
a source of profit for a few while conversely subjecting many to poverty. Thus,
this new social ethic politicizes the debate about the city and creates a discourse
and political platform for urban social movements, in which access to the city is
the right of all its residents and not restricted to a few, or rather, the wealthiest.
The struggle brought together several organizations, movements, professional
organisations .The church too came out strongly in defence of the social role of
property which was a major contribution in a deeply religious society like Brazil.

The culmination of these struggles was the establishment of an internal regulation

in the Constituent Assembly which permitted the use of popular initiatives to
present amendments to the Brazilian Constitution of 1988. More than 12 million
signatures were gathered for popular amendments which contained the earlier
discussed reforms. Conservative forces argued that the principles of social justice
were being used as a pretext to prevent the country’s development (development
was a term long used to disguise the issue of the inequality of urban space) and
that intervening in urban policy would give the state too large of a role. While all
the proposals for reform were not incorporated in the constitution, some important
ones were. With the popular amendment, Brazilian public rights began to
guarantee not only private property and individual interest, but also the protection
of collective interest above the various uses of individual property. Other
achievements at that time were the affirmation and establishment of effective
municipal autonomy and the expansion of popular participation in city
management, both through direct institutional mechanisms like plebiscites,
referendums, popular initiatives and public consultation, as well as other forms
of direct participation such as councils, conferences, forums and public hearings.
11
Urban Development Plans, This ensured the community’s participation in the development of Master Plans,
Policies and Programmes
the main urban planning instrument for municipalities. Further they paved the
way for many other reforms such as the recognition of the right to housing as a
fundamental right in the Brazilian Constitution in 2000 and the approval of the
City Statute in 2001.

The City Statute (Federal Law No. 10.257/01) is the Brazilian development law
that regulates the chapter on urban policy in the 1988 Brazilian Constitution. It
sets the overall guidelines to promote urban policy that must be observed by the
Union (federal government), the states (state governments) and municipalities.
The City Statute specifically addresses:
Ø instruments designed to ensure the fulfilment of the social function of
property, progressive taxation over time on urban property and expropriation
for urban reform purposes;
Ø criteria for municipalities to develop and apply Management Plans;
Ø regulatory instruments for the use of and access to urban lands occupied by
low-income people; and
Ø democratic city management instruments; public hearings; councils; and city
conferences in national, state and municipal plans.
These reforms have set the stage for several policy innovations in cities of Brazil
which incorporate the elements of inclusivity and sustainability. The case of
Curitiba where the principle of planning for the poor first was incorporated to
create a model of a clean and green city, Porto Allegre, where participatory
budgeting enabled the city to set its priorities for the poor first, the city of Rio
where a massive up gradation programme of favelas (slums) is undertaken are
all examples of these innovations that have been made possible due to a high
degree of decentralisation, popular participation and political commitment to
goals of inclusivity and sustainability. Brazil’s urbanisation story is thus one of
possibilities of how problems such as squalor, poverty and inequity can be dealt
with through determined action by both people and policy makers. It is not without
pitfalls. Thus, high proportions of external and public debt are concomitants of
the urbanization in the country. However, the country still has the potential to
become one of the largest growing economies of the world.

1.5.1 Case of Porto Allegre

Porto Allegre is a city in the state of Rio Grande do Sul in Brazil and is home to
about 1.3 million residents. The local government of Porto Allegre, like several
other local governments functioned as a consortium of landed and business
interests till 1988. In 1988, a coalition of Left Parties led by the Worker’s Party
was elected to power and held it for consecutive terms in 1992 and 1996. The
coalition government faced a challenge similar to most Brazilian cities – that is
to build a city government responsive to needs of those who were excluded from
city services .The coalition government began an effort at participatory budgeting
which has progressed to transform the nature of local governance in the city.
The making of the municipal budget in Porto Alegre today is in effect a bottom-
up process. The key innovation has been the creation of district and citywide
budget councils constituted of delegates elected in open assemblies at the
neighbourhood and district levels. Over the years, these councils have come to
12 play an increasingly significant role in negotiating both the broad objectives and
details of the budgetary allocations. The councils also play a role in organizing Urban Development
Policies: A Global Overview
people, build skills in articulating demands, translating them into specific
proposals and advocating for them. The introduction of participatory budgeting
has considerably changed the priorities of local government spending to prioritise
needs like sanitation, housing as opposed to the patronage interests reflected
earlier. As the experiment has advanced, it has also widened the scale of
participation and advanced representation at every stage in the programme. The
municipality has expanded its range of services and a redistributive dimension
has been introduced.

In this section you studied urban development in Brazil. Now, you should
be able to answer the question relating to this section given in Check Your
Progress-2.

Check Your Progress 2

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) Mention some of the urban reforms in Brazil?
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1.6 URBAN DEVELOPMENT POLICY

PERSPECTIVES IN SOUTH AFRICA
South Africa is another nation that is urbanising very rapidly. Over 55% of its
population is urban and estimates indicate that the current rate of urbanization is
about 4.9%.The largest proportion of this urban population (about 67%) is located
in the four metropolitan areas of Pretoria/Johannesburg, Durban, Cape Town
and Port Elizabeth. The country also has a number of medium sized towns in the
South and the East but the four metropolitan areas are the real engines of its
economy, generating over 80% of the GDP of South Africa. The system of
apartheid which characterised the country is expressed in almost every aspect of
South African cities, in particular the larger ones. The system of apartheid with
its accompanying town planning, transport policies and systems of governance
perpetuated by economic forces resulted in cities with extremely high proportion
of inequity and exclusion Thus, there is low- density, well serviced white
neighbourhoods and there are extremely over crowded, poorly serviced black
neighbourhoods which are spatially segregated. Black townships and housing is
usually the worst in these cities and is either in the form of matchbox housing or
shacks. Cities like Durban and Elizabeth have about half their population in
such shack housing which is informal. Most of the economic opportunities are
located in the well services parts of cities. The neighbourhoods were governed
by distinct authorities. Spatial segregation thus was a marker of differential
opportunities.
13
Urban Development Plans, In 1990, when the system of apartheid ended and the country embarked on a
Policies and Programmes
truly democratic path, the crucial challenge that it faced in terms of urban
development was to continue its high growth trajectory while tackling the
challenge of systemic exclusion. Several legislations were passed to materialize
this vision. The South African constitution thus enshrines an access to adequate
housing as a Constitutional right. The Local government Transition Act,1996
attempted to bridge the distinct local governance systems while the Development
Facilitation Act,1995 provides for fast tracking of land development for urban
growth while also providing for integrated planning of cities.

Like the Chinese system, local governments in South Africa are seen to be
primarily responsible for service delivery as well as local economic development
while the tasks of redistribution, etc. are entrusted to the provincial governments.
This has meant that most city governments are engaged in attracting new
investment opportunities and in improving service delivery. The country has
very successfully used the organization of events such as World Cup football
(which took place in 2010) to enhance its infrastructure and economic
competitiveness.

The downside of the South African urbanization story remains that apartheid no
longer continues in its original form but is expressed substantially enough in the
access to housing, services, and economic and other opportunities. However, the
system of ‘Soweto’ where cities were considered the preserves of the rich and
blacks whose access to city was otherwise restricted were brought in mainly to
serve as labour has been broken. Migration is now free. This has brought some
of the contradictions to the fore as witnessed by the increasing occupation of
public lands by poor black population and thus an increase in informal housing.
New challenges are thus being generated in South African cities.

1.6.1 Case Study of Johannesburg

Johannesburg is a city of about 3.0 million populations but forms a conurbation
with nearby provinces of Pretoria and Vereeniging of about 8.0 million. In the
apartheid era, the city ,home to white South Africans had extremely visible areas
of prosperity with standards equivalent to the First World. Poverty, on the other
hand, was invisible and hidden in the Soweto. The post apartheid era has thrown
up the simultaneous challenges of commitment to redistribution and reconciling
the same with need to enhance economic investment, identify resources and
counter powerful vested interests at multiple levels.

The period 1980-2000 saw a reducing rate of economic growth for the country
as a whole. In Johannesburg, this translated into a closure of manufacturing
industries, creating high levels of unemployment especially among African youth.
While the South African constitution is committed to the autonomy of local
municipal governments, the above mentioned pressures and the resultant
restructuring of governments and challenges of service provision in under serviced
areas have preoccupied the local officials . Further while much of the poverty in
South Africa continues to be rural, urban poverty has increasingly become more
visible. Post apartheid Johannesburg thus demonstrates several of the symptoms
of a transitional economy. The end of apartheid saw a system of weak
decentralisation at the local level. However by the end of 2000, autonomy of
local governments was fully established. In Johannesburg, basic service provision
14
to under-served areas has been considerably enhanced. The planning frameworks Urban Development
Policies: A Global Overview
for the city were also revised. Economic opportunities thus also came to be much
more spatially distributed.

Poverty in Johannesburg continues to be geographically concentrated and been

unable to fully counter the impacts of exclusion perpetuated by apartheid planning
systems. However, there is evidence to show that the situation has become much
more dynamic with many more middle class blacks and emergence of significant
social differentiation among the blacks themselves. Johannesburg thus stands as
a testimony to how a challenge of systematised exclusion can be countered while
managing economic growth.

In this section you studied urban development in South Africa. Now, you should
be able to answer the questions relating to this section given in Check Your
Progress-3.

Check Your Progress 3

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What are the features of urbanisation in South Africa?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

1.7 DRAWING LESSONS

India is a large country characterised by diversity and a democratic system which
has developed strong roots. The country also is characterised by inequalities and
in particular, institutionalized systems of inequity like those based on caste,
religion and ethnicity. Policy making in India has few parallels with the systems
in the countries described earlier and yet there are several lessons that we can
learn from these countries.

The first is about the outlook towards urbanisation. The experience of all these
countries shows that urbanization as a conscious strategy of development yields
positive results. At a stage where agricultural employment becomes stagnant, it
helps to relieve the pressure of employment on the farming sector and brings in
new modes of enhancing productivity. It thus also channelizes the energies and
the creativity of the youth, thereby cashing on the demographic dividend available
to these countries. India has urbanised at a moderate pace, our outlook towards
urbanisation is unclear. The spatial dimension to policies is by and large neglected;
our cities develop in an unplanned manner. The experience of China in particular,
offers immense lessons for an integrated approach to economic and spatially
directed development.

15
Urban Development Plans, The second major area for learning is in terms of the difference that effective
Policies and Programmes
local governments make to the growth potential and quality of life in cities. In
China and South Africa, the stakes of local governments in economic development
have enabled these governments to devise ways in which to attract investments
and growth opportunities. In Brazil, decentralisation has enabled the inclusivity
and sustainability to become political agendas, allowing local governments to
pursue pro- poor and inclusive policies through innovations. In India, the
decentralisation agenda began to be developed through the 74th Constitutional
Amendment but the task remains unaccomplished. Most urban local bodies in
the country have very little autonomy to either chart their economic futures or
innovate for inclusivity. The potency of effective decentralisation is thus, a
tremendous lesson offered by these countries.

Another area for learning is the management of migration. China discouraged

migration directly through the Hukou; it has been forced to engage in a gradual
reform of the system to encourage urban development. South Africa created
divided cities by compelling labour to move to cities in allotted areas. It is still
grappling with the impacts of the systematised apartheid on its cities. Brazil
encountered migration and inequity through a revolutionary process which then
transformed the principles of urban governance totally. In India, cities are
theoretically open to migrants but we have not redressed the issues of identity,
inclusion in city fabric and services in a systematic way, instead forcing them to
find their own solutions by way of slums and informal livelihoods. The
experiences of the three countries should illustrate to us that dealing with urban
poverty and migration is an urgent challenge, especially if it is to be channelled
to improving the prospects of a city.

1.8 LET US SUM UP

As the world becomes urban and the axis of urbanisation shifts to the Global
South, challenges of urbanization that did not exist before and for which little
knowledge is available are emerging. There is thus a lot of value in such countries
learning from each other than following the prescriptions of the West which
never experienced such challenges. China, Brazil, South Africa represent countries
which have followed broadly the same developmental trajectory as India and
thus their urbanization experience offers several invaluable lessons for us.
However, the urban policy perspectives of the USA have also been discussed in
this unit. The experiences of these countries offer a lot of lessons, particularly in
the areas of perspective on urbanisation, decentralisation and management of
migration.

The current phase of urbanisation is one which the world has never experienced
before. Urbanization amidst poverty, the experience of large scale cities
urbanization while the climatic changes create new risks for living environments
are daunting aspects of this urban experience, for which little knowledge exists.
Learning from each other is perhaps the best way of learning at this stage. Lessons
from China, Brazil, and South Africa with broadly similar development
trajectories are thus very useful for us to reflect on our own policies and work
towards redesigning them.

16
 Urban Development
1.9 REFERENCES AND SELECTED READINGS Policies: A Global Overview

Beall,J;Crankshaw,O and Parnell,S (2002),Uniting a Divided City,Earthscan,

London.
Gianpaolo Baiocchi, “Decentralisation of Government in Brazil—Perils and
Prospects” (paper presented at the International Conference on Democratic
Decentralisation, Thiruvananthapuram, 23-27 May 2000).
Goldman Sachs (2006): Dreaming with BRICS: The pathway to 2050, Global
Economics paper no 99
Heller Patrick: Moving the State : Democratic Decentralisation in Kerala, Porto
Alegre and South Africa in Politics & Society, Vol. 29 No. 1, March 2001 131-
163© 2001 Sage Publications.
Human Settlements Group, IIED Population and Development Branch, UNFPA,
Urbanization and Emerging Population Issues-5, Anthony, GO Yeh, Jiang Xu
and Kaizhi Liu “China’s Post-reform urbanisation: Retrospect, Policies and
Trends”, Londan, UK
Harvey, Vanessa (2008) National Urban Policy in the United States, SGS
Economic and Planning.
Kevin R. Cox (with David Hemson and Alison Todes), “Urbanisation in South
Africa and the Changing Character of Migrant Labor,” Department of Geography,
The Ohio State University, August 9, 2005, at: http://geog-
www.sbs.ohiostate.edu/faculty/kcox/cox1.pdf
Mukhopadhyaya Partha(2010): Beginning a Conversation on Chinese
Urbanization in Growing Cities in a shrinking world: The Challenges of Urbanism
in India and China (Ed) Gurung et al, India China Institute, MacMillan ,New
York ,pp 118-142
Piper Laurence and Deacon,R (2008) : Partisan Ward Committees, Elite
Accountability and Community Participation in Transformation,Vol66-67,pp 61-
82
Rebecca Abers, “From Ideas to Practice: The Partido dos Trabalhadores and
Participatory Governance in Brazil,” Latin American Perspectives 23, no. 4
(1996): 39.
South Africa Housing department (1997): Urban Development Framework

1.10 CHECK YOUR PROGRESS-POSSIBLE

ANSWERS
Check Your Progress 1
1) What is the current urban development policy of the Obama government in
USA?
i) Strengthening Federal Commitment to cities.
a) Create a Whitehouse office on Urban Policy.
b) Fully fund the community development block grant. 17
Urban Development Plans, ii) Stimulate Economic Prosperity in Metropolitan Regions.
Policies and Programmes
a) Support job creation and access to jobs.
b) Enhance workforce training.
c) Increase access to capital for underserved businesses.
d) Create Nation Network of Public-Private Business incubators.
e) Convert manufacturing to clean technology.
2) What are the features of urbanisation in China?
The features of urbanisation in China are
a) Strong decentralised system of local government
b) Local governments as the key stakeholders in economic development
c) Economic strategy to attract investment on a long term basis
d) Infrastructure creation to drive urbanisation
e) Use of land as a leverage for investment and
f) Gradual reform of migration policies.
Check Your Progress 2
1) Mention some of the urban reforms in Brazil
The process of urban reforms in Brazil is characterized by popular struggles.
These struggles were rooted in the inequity in Brazilian cities whose
governments represented landed and patronage interests. The key agendas
of the reform were:
a) Decentralisation and empowerment of local governments;
b) Participation; and
c) Equity and inclusion through acceptance of social ends along with private
interests.
This has helped to subsequently open up the doors for several innovative
practices and systems at the local level directed at social and environmental
sustainability.
Check Your Progress 3
1) What are the features of urbanisation in South Africa?
Urbanisation in South Africa has been fairly rapid. Over 55% of its population
is urban and estimates indicate that the current rate of urbanization is about
4.9%.The largest proportion of this urban population (about 67%) is located
in the four metropolitan areas of Pretoria/Johannesburg, Durban, Cape Town
and Port Elizabeth.
Another key feature of urbanisation in South Africa is the legacy of
colonization which restricted opportunities of urbanization only to the White
population and used black labour only as a servantile population. South Africa
has a high proportion of decentralisation. Thus responsibilities of economic
growth and planning, service provision are key functions of these
governments.
18
 Urban Development
UNIT 2 URBAN DEVELOPMENT POLICY Policies: A Global Overview

PERSPECTIVES IN INDIA

Structure
2.1 Introduction
2.2 India’s Urbanisation: Basic Features and Pattern
2.3 Urban Policies and their Impact
2.4 Challenges of Managing Urbanisation
2.5 Let Us Sum Up
2.6 References and Selected Readings
2.7 Check Your Progress – Possible Answers

2.1 INTRODUCTION
Cities around the world are playing an ever increasing role in creating wealth,
enhancing social development and, attracting investment. It’s also harnessing
human and technical resources for achieving unprecedented gains in productivity
and competitiveness. At the same time, cities play a critical role in driving the
transition to sustainable development and promise better access to improved
social amenities such as health, education, culture and recreation among others
and a range of civic services namely water, power, sewerage, sanitation, roads
and transportation to upgrade the quality of life of its inhabitants. As countries
develop, cities and urban settlements account for a larger share of the national
income. Often it generates a disproportionate share of Gross Domestic Product
(GDP) and provides huge opportunities for investment and employment.

However, in reality cities, particularly in developing countries, are often plagued

with severe shortcomings. Displaying a differentiated pattern, they contain centres
of affluence as well as concentrations of abject poverty and neglect. While they
offer some of the best social services including world class education and health
facilities, cities are also host to a great many social ills – chronic poverty, poor
sanitation, crime, environmental pollution and social unrest.
After studying this unit, you should be able to:
• Explain the trends and pattern of urbanisation
• Describe the role played by various policies and programmes in urban
development and management
• Analyse the impact and outcome of these policies and programmes

2.2 INDIA’S URBANISATION: BASIC FEATURES

AND PATTERN
Though, India is less urbanised in comparison with many Asian countries like
China, Indonesia and South Korea. Nevertheless with nearly a third of the
population – in absolute numbers about 286 million urban inhabitants in 2001 –
India had the second largest urban population in the world, next only to China.
19
Urban Development Plans, Given current trends in population growth and migration, estimates of the United
Policies and Programmes
Nations indicate that India is witnessing an ‘urban explosion’ with India’s urban
population likely to reach 575 million by 2030 (40.90 percent of total population).

The importance of India’s urban sector is indisputable. The urban sector’s

contribution to India’s net domestic product is estimated at between 50 and
52 %, while at the same time, 64.7 % of employment in trade, commerce, and
financial services; 65 % in manufacturing and 68 % in the transport sector are
concentrated in urban areas.

As may be seen from Table 1, India’s urban population increased from 62.4
million in 1951 to 159.5 million in 1981 i.e. the absolute increase during the
three decades was of the order of 94 million (1951-1981). This increase may be
attributed to faster pace of industrialisation adopted in five-year plans by
Government of India. During 1981-1991 the urban population increased by 59.4
million which indicates the growing trend towards urbanisation. Urban population
in absolute terms reached 286.1 million in 2001, which constituted 27.8 percent
of India’s total population of 1.02 billion in that year. The percentage of urban
population to total population in the 1991 Census including interpolated
population of Jammu and Kashmir where census could not be conducted in 1991)
was 25.7 percent. Thus, there has been an increase of 2.1 percentages in the
proportion of urban population in the country during 1991 – 2001.

Table 2.1: India: Urbanization and Decadal Growth, 1951 – 2001

Year Total No. of Urban Share of Decadal Index of
population towns population urban to Growth of Urban
(million) and UAs (million) total urban Population
population population (Base
(%) (%) 1951=100)
1951 361.1 2843 62.4 17.3 41.4 100
1961 439.2 2365 78.9 18.0 26.4 126
1971 548.1 2590 109.1 19.9 38.2 175
1981 683.3 3378 159.5 23.3 46.1 256
1991 846.3 3768 217.6 25.7 36.4 349
2001 1028.6 5161 286.1 27.8 31.5 458
Source: Census of India, Final Population Tables 2001, GOI, New Delhi

Basic feature of urbanization in India can be highlighted as:

1) Skewed and lopsided urbanisation
2) Urbanisation occurs without industrialisation and strong economic base
3) Urbanisation is mainly a product of demographic explosion and poverty
Induced rural - urban migration.
4) Rapid urbanisation leads to massive growth of slum followed by misery,
poverty, unemployment, exploitation, inequalities, degradation in the quality
of urban life.
5) Poor quality of rural-urban migration leads to poor quality of urbanisation.
20
The pattern of urbanization in India is characterised by continuous concentration Urban Development Policy
Perspectives in India
of population and activities in large cities. Urbanisation process is not mainly
“migration lead” but a product of demographic explosion due to natural increase.
India’s urbanisation is followed by some basic problems in the field of:
1) Housing,
2) Slums,
3) Transport
4) Water supply and sanitation,
5) Water pollution and air pollution,
6) Inadequate provision for social infrastructure (school, hospital, etc).
Indian urbanisation is involuted not evoluted. Poverty induced migration occurs
due to rural push. The megacities like Delhi, Mumbai, Kolkata, Chennai,
Hyderabad and Bangalore grew in urban population not in urban prosperity. Hence
it is urbanisation without urban functional characteristics. These mega cities are
subject to increasing slum and inadequate shelter, drinking water, electricity and
sanitation.

Urbanisation is degenerating social and economic inequalities which warrant

social conflicts, crimes and anti-social activities. Lopsided and uncontrolled
urbanisation leads to environmental degradation and degradation in the quality
of urban life that is pollution in sound, air, water, created by disposal of hazardous
waste.

In this section you studied the basic features and pattern of India’s urbanisation.
Now, you should be able to answer some questions relating to this section given
in check your progress-1.

Check Your Progress 1

Note: a) Write your answer in about 50 words
b) Check your answer with possible answers given at the end of the unit.
1) What are the basic features of Urbanisation?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) Explain the pattern of India’s Urbanisation.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
21
Urban Development Plans, 3) What are the basic problems in India’s rapidly growing cities?
Policies and Programmes
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

2.3 URBAN POLICIES AND THEIR IMPACT

Urban planning and policy discussions in India have invariably only dealt with
issues like relationship between urbanisation and economic development,
distribution of urban population in various size-classes of settlement, regional
development, growth of large, especially metropolitan cities, infrastructure and
services, urban local bodies and institutional aspects including finance and legal
issues .A good number of reports, documents and papers have been published on
these issues.
Basically the thrust of most of these reports have been that
i) large cities have grown faster than, and at the expense of, small and medium
towns;
ii) this is undesirable;
iii) measures should be taken to arrest large city growth; by making greater
investment in small and medium towns; and
iv) effective industrial location policy, set to achieve at intra-regional balance
in industrial location.
This section focuses on an analysis of urban policy at the national level. It should
be remembered however that urban development, housing, urban policy and
urban planning in India are state subjects under the Constitution. Therefore,
without a thoroughgoing analysis of urban development policies in different
states, it is not possible to paint a comprehensive picture of urban policy in
India. The Centre can, at the most, “issue directives, provide advisory services,
set up model legislation and fund programmes which the states can follow at
will”. The urban policy existing in the states is largely an off shoot of that outlined
in the national five years plans and other policies and programmes of the Central
Government. It is in this context that an analysis of the national level urban
policies and programmes become important to understand the general direction
of urban policy in India.

2.3.1 The First Phase: 1951-56

The 1st Five Year Plan (1951-56) was mainly concerned with housing and
rehabilitation of refugees. The Ministry of Works and Housing was set up to
ensure speedy spatial and occupational rehabilitation of refugees. A large number
of rehabilitation colonies and sub-towns were set up in Delhi, Bombay,
Ahmedabad, Uttar Pradesh, Haryana, Punjab and Calcutta. The city of Chandigarh
was created in the same period as a symbol of ‘modern’ India. In the same plan
22
period the National Buildings Organisation and the School of Planning and Urban Development Policy
Perspectives in India
Architecture were set up in order to improve the quality and efficiency of built
environment building, research and develop housing technologies and create a
cadre of trained town planners. Furthermore, the Central Government also set
up the Town and Country Planning Organisation to provide guidance and
assistance to Central and State governments on urban problems and also to prepare
the Delhi Master Plan which was conceived as the model plan which was
subsequently to provide a framework for master plans to be prepared for other
cities. The other two issues that the 1st Plan was concerned about were industrial
and employer housing and slums.

The Plan was categorical about the need for slum clearance. Terming slums a
‘national problem’ and a ‘disgrace to the country’ it stated that “it is better to pay
for the cost of clearing than to…suffer their destructive effects upon human
lives and property indefinitely”. It is to be noted however, that the use of the
term ‘slum’ in the First Plan refers exclusively to dilapidated and over-congested
areas such as the Walled City in Delhi. The 2nd Plan (1956-61) identified “rise
in land values, speculative buying of lands in the proximity of growing towns,
high rentals and the development of slum areas” as features common to most
large towns and cities. It also predicted an escalation in these problems given the
trends in industrialisation. The Plan thus introduced the theme of regional planning
and emphasised the importance of preparing master plans. While recognising
growing housing deficits in urban areas, it placed the problem of housing in the
wider context of urban and regional planning and called for construction of
housing for low income groups. Thus Town and Country Planning legislation
was enacted and in many states institutions were set up for the preparation of
master plans. In 1956, the Slums Areas (Improvement and Clearance) Act was
passed. The Act defined slums as: “any area (where) buildings…(a) are in any
respect unfit for human habitation, or (b) are by reason of dilapidation, over-
crowding, faulty arrangement and design of such buildings, narrowness or faulty
arrangement of streets, lack of ventilation, light or sanitation, or any combination
of these factors, are detrimental, to safety, health or morals” .For preventing the
growth of slums, the Plan recommended strengthening local authorities and
mobilising “the support of enlightened public opinion” in enforcing the
implementation of building codes and municipal by-laws.
It was in the 3rd Plan (1961-66) that urban policy and development planning
began to acquire a cogent form. During this period, Master Plans for various
cities were prepared and the need to strengthen urban local governments,
especially their financial and administrative aspects, was recognised. In order to
guide and enforce the planned development of cities through the implementation
of master plans, para-statal development authorities, such as Delhi Development
Authority (DDA), Mumbai Metropolitan Regional Development Authority
(MMRDA), Madras Metropolitan Development Authority (MMDA), were set
up. It is noteworthy that the master planning approach to tackling urban problems
was an uncritical import from the then prevalent town planning and regulatory
practices in Britain and the United States of America.
The important features of these master plans were:
a) Designing of land use with a future perspective;
b) A city without slums, or in other words, a standard ‘decent’ housing for
everyone; 23
Urban Development Plans, c) Detailed modernised Central Business District;
Policies and Programmes
d) Division of major land use into zones;
e) An efficient highway and transportation system; and
f) Adequate community facilities with residential areas divided into
neighbourhoods.
The master plans give pre-eminence to the planned and orderly development of
cities through a strict spatial segregation of functions such as housing, commerce,
industries, etc. in mono-use zones.

The 3rd Plan also emphasised the need for balanced spatial and demographic
development through locating new industries far away from cities, adopting the
concept of the ‘region’ in the planning of large industries and strengthening rural-
urban linkages. The Plan expressed concern about increase in land prices in
cities and the growth of slums. The concept of urban community development
was introduced to tackle problems of urban slums. Earlier the central government
had introduced a scheme in 1959 to “give loans to state governments for a period
of ten years acquisition and development of land in order to make available
building sites in sufficient numbers”. Moreover, “various measures such as
freezing of land prices, acquisition and development of land and taxation of
vacant land were suggested to control and regulate the urban lands”. The Plan
period also saw significant dispersal of urban planning and development activities
from the centre to the states with massive amounts of investment poured into
developing state capitals and new cities such as Gandhinagar in Gujarat and
Bhubaneswar in Odisha. Thus, we see that the first phase of urban policy was
characterised by the lack of a comprehensive vision on urbanisation or urban
process in India. The Plans prepared during this period largely had an adhoc and
piecemeal approach towards urban issues and problems. Though from the second
plan onwards, planned development of cities became a major theme , there was
little attempt to reconcile the technocratic blueprint of master plans with the
complex realities of a predominantly poor, newly independent, post colonial
country.

2.3.2 The Second Phase: 1969-1984

Achieving balanced urban growth through dispersing populations in smaller urban
centres was the overriding thrust of the 4th Plan (1969-74). This was to prevent
the concentration of population in metropolitan cities such as Delhi, Bombay,
Calcutta and Madras. The creation of small towns and ensuring the spatial location
of economic activity in a planned manner consistent with the objectives of the
Plan was underscored.
The Plan articulated the need for urban land policy at the state level and provided
specific guidelines for the formulation of the same. It recommended that -the
state level urban policies should aim at:
a) The optimum use of land;
b) Making land available to weaker sections;
c) Checking the concentration of land ownership, rising land values and
speculation of land; and
d) Allowing land to be used as a resource for financing the implementation of
24 city development plans.
In 1970, the Housing and Urban Development Corporation (HUDCO) was set Urban Development Policy
Perspectives in India
up to provide loans to urban development authorities and state housing boards
for housing and other development projects such as infrastructure development,
land acquisition and essential services. One of the main goals of the HUDCO
was the “promotion of housing for the persons belonging to low income groups
and economically weaker sections” .The Central Government launched the
Environmental Improvement of Urban Slums (EIUS) scheme in 1972-73 to
provide a minimum level of services, such as, water supply, sewerage, drainage,
pavements in 11 cities with a population of 8 lakhs and above. The scheme was
later extended to 9 more cities. In 1973, towards the end of the fourth plan, the
World Bank started its urban sector operations in India with the launching of the
Calcutta Urban Development Project. The 5th Plan (1974-79) was mainly
concerned with introducing measures to control land prices in cities; providing a
framework for the development of small and medium towns; augmenting basic
services in cities and towns; addressing the problems of metropolitan cities with
a regional perspective and assist development projects having national
significance in metropolitan cities. The priorities expressed in the Plan were
based partly on the National Urbanisation Policy Resolution of the Town and
Country Planning Organisation. In order to evolve a framework for the
development of small and medium towns the central government constituted a
Task Force on Planning and Development of Small and Medium Towns in 1975.
The main objectives of the Task Force, were to “examine laws relating to local
administration and urban development, and to suggest suitable modifications of
these laws, keeping in view the need to assist in the planned growth of small and
medium towns, and to formulate guidelines and regulations in the matters such
as zoning, setbacks, building control and such other relevant matters”. The report
of the Task Force was published in 1977 and recommendations included giving
priority to the development of existing towns and cities within a population range
of 50,000-3, 00,000. The framework for the selection and consequent development
of small and medium towns consisted of the following recommendations:
a) Formulation of a national urban policy;
b) Urban land policy to ensure proper use of land;
c) Development of small and medium towns, cities and metropolises with
organic linkages to their immediate areas;
d) Identification of growth points in the region that may be delineated;
e) Evolution of location policies in the context of regional development;
f) Provision of inviolable greenbelts around settlements of certain sizes;
g) Working out of rational and feasible norms and standards of urban development;
and
h) Creation of appropriate statutory local government agencies at various levels.
The Plan also emphasised the need for infrastructural development of cities with
population over 300,000. To achieve this goal a scheme called Integrated Urban
Development Programme (IUDP) was launched. Also, the Sites and Services Scheme
for making serviced land available to the poor was launched in this Plan period.

One of the most important steps that were taken to check land prices and
speculation in land during the fifth plan period was the promulgation of the
Urban Land (Ceiling and Regulation) Act (ULCRA), 1976. The ULCRA aimed 25
Urban Development Plans, at preventing concentration of urban land in the hands of a few thereby checking
Policies and Programmes
speculation in and profiteering from land. It enabled the socialisation of urban
land to ensure equitable distribution amongst various social classes and orderly
development of urban built environment. The Act provided for fixing ceiling on
the possession and ownership of vacant land in urban areas and acquisition of
excess land for creating housing stock for the poor.

The focus of the 6th Plan (1980-85) was largely on the development of small
and medium towns and provision of basic services in urban slums. Though the
Plan underlined the need to improve environmental conditions in slums through
improvement in drainage, sewerage and sanitation, the urban component of the
6th Plan is remembered primarily for the introduction of a centrally sponsored
scheme called the Integrated Development of Small and Medium Towns (IDSMT)
with the objective of promoting growth in towns with less than 100,000 population
through provision of infrastructure and basic services. The components eligible
for central assistance under the IDSMT included land acquisition and services,
construction of new markets, provision of industrial estates, provision of other
services and processing facilities for the benefit of agricultural and rural
development in the hinterland and low cost sanitation. The state components
included slum improvement, small-scale employment generation, low-cost water
supply schemes, drainage and sanitation, sewerage, preventive medical facilities,
parks and playgrounds. To begin with, the scheme included 231 towns in various
states and union territories, selected on the basis of the ratio of urban population
in the state to the total urban population in the country. Later on, a few additional
towns were added to this list. There was also a lot of emphasis on containing the
growth of metropolitan cities by dispersing industrial and economic activities in
small and medium towns in general and satellite towns of large cities in particular.
However, stagnation in agriculture and skewed investment policies coupled with
favourable economies of agglomeration enjoyed by large cities thwarted all
attempts at ‘balanced regional development’.

2.3.3 The Third Phase: 1986 Onwards

In mid 80s, the Indian economy started taking its first tentative steps towards
liberalisation. The urban policy reflected the trend in economic policy. The 7th
Plan heralded a shift in urban policy by initiating a process of opening up avenues
for private sector participation in urban development. The Plan called for “radical
(re)orientation of all policies related to housing” and entrusted the main
responsibility of housing construction to the private sector. The government’s
role was sought to be reduced to “mobilisation of resources for housing, provision
for subsidised housing for the poor and acquisition and development of land”. In
order to boost the housing finance market, it recommended setting up of the
National Housing Bank. It also proposed to set up a National Urban Infrastructure
Development Finance Corporation to augment the capacity of urban local bodies
to undertake infrastructure creation, particularly water supply and sewerage
facilities.

In 1988, the first ever National Housing Policy (NHP) was announced. The
objectives of the NHP included removal of homelessness, improving the
conditions of the inadequately housed and provision of minimum level of basic
services to all. The Policy conceived the role of the government as “a provider
for the poorest and vulnerable sections and as a facilitator for other income groups
26
and private sector by the removal of constraints and the increased supply of land Urban Development Policy
Perspectives in India
and services”. The IDSMT continued to be the most important scheme for the
urban sector under the Seventh Plan as well. In the Plan period, the coverage of
the scheme was extended to 102 additional towns. The Plan reiterated the need
to integrate town level plans into the regional systems. In 1985 the National
Capital Region Planning Board was formed to reduce population pressure on
Delhi by dispersing and diverting population and economic activity to other
urban centres within the National Capital region, thereby ensuring the balanced
development of the region as a whole. Emphasis was also laid on community
participation at the town/city level. Recognising the need to directly address the
problem of urban poverty, the Plan also launched an urban poverty alleviation
scheme called the Urban Basic Services (UBS) with a focus on improving the
status of women and children in urban low-income families through community
participation, integrated development and cost effectiveness. The UBS was later
merged into the EIUS in 1990 and renamed as Urban Basic Services for Poor
(UBSP). Another important scheme, namely, Nehru Rozgar Yojana (NRY) was
launched in 1989 to generate employment opportunities for the urban poor. The
NRY had three basic components of microenterprises, wage employment and
shelter upgrading. In the same year, the National Commission on Urbanisation
(NCU) submitted its report. The Commission was entrusted with the task of
making a detailed investigation into the process, pattern, trends and issues of
urban development and planning and suggesting appropriate framework and
guidelines for urban policies and programmes in the coming years. The NCU
emphasised close link between urbanisation and economic development. The
NCU marked a significant departure from the policy pronouncements of earlier
government policies and plans as it abandoned the concept of backward area
because “it was felt that instead of forcefully inducing investments in areas which
are backward and have little infrastructure and in which the concessions are
likely to be misused, the identified existing and potential urban centres at
intermediate levels could be developed to attract the migrants as they are located
in closely related regions”.Consequently, the Commission identified 329 cities
called GEMs (Generator of Economic Momentum) which were further divided
into NPCs (National Priority Centres) and SPC (State Priority Centres). Apart
from GEMs, National and State Priority Centres, the Commission also identified
49 Spatial Priority Urban Regions (SPURs). The future growth in urbanisation
was expected to take place along these nodes and corridors.

The Plan expressed the need to link urban growth with economic development
and advanced the following policy directives:
a) Consolidation and operationalisation of spatial and economic dimensions
of planning by:
i) involving an integrated hierarchy of rural and urban settlements based
upon primary economic functions;
ii) linking the urban development plans with respective district level
planning processes including the programmes of various state level and
central departments like agriculture; and
iii) rural development, environment, telecommunications, industries and
other such organisations.

27
Urban Development Plans, b) Convergence of all related programmes that is IDSMT, housing and
Policies and Programmes
infrastructure development programmes of HUDCO, NRY and UBSP aims
to create the desired impact in small and medium towns beyond the threshold
level.
c) Taking legal, organisational and financial measures for enhanced and
equitable supply of urban land and promotion of housing, including review
of master plan standards, amendments to Land Acquisition Act, Urban Land
Ceiling and Regulation Act, Transfer of Property Act and Rent Control Laws.
d) Promoting public-private partnerships in the urban development sector.
e) Developing appropriate specialised institutional support at the central and
state levels to deal with financing and development of urban infrastructure.

In the same Plan period, in 1995, another programme called Prime Minister’s
Integrated Urban Poverty Eradication Programme (PMIUEP) was launched. The
PMIUEP was a five year long scheme applicable to all class II cities with a
population ranging between 50,000 to 1, 00, 00 subject to the condition that
elections to local bodies had been held. In 1992, the Town and Country Planning
Organisation prepared a draft National Urban Policy.
The main objectives of the draft NUP were to:
a) Evolve a spatial pattern of economic activities and population distribution
based on regional development and planning considerations;
b) Secure a balanced distribution of population among the urban centres of
various sizes, so as to maximise economic gain and minimise social costs of
urbanization;
c) Control further growth of metropolitan cities by dispersal of economic
activities in the new growth centres;
d) Prioritise development of those urban centres which have been identified as
prime economic movers in national economic development, such as the
National Priority Cities (NPCs), State Priority Cities (SPCs) and Spatial
Priority Urbanisation Regions (SPURs); and
e) Improve the efficiency of the urbanisation process by removing bottlenecks
and breakdowns in the supply of urban services.

At the beginning of the 8th Plan period, in 1992, the 74th Constitutional
Amendment Act was promulgated. It was a landmark Act which sought to
decentralise decision making in cities and towns through creation of elected
urban local bodies (ULBs) as institutions of democratic self governance and
devolution of essential functions related to city planning and service provision
to these bodies. The salient features of the 74th CAA are:
• introduction of the Twelfth Schedule which lists the functions of the ULBs;
• establishment of ward committees in areas having a population of over 3
lakhs;
• periodic and timely elections of ULBs; and
• devolution of finances to ULBs as per the suggestions of the State Finance
Commissions (SFSs).
28
The Mega City Scheme, a centrally sponsored scheme launched in five cities, Urban Development Policy
Perspectives in India
namely, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore during the 8th
Plan had the express purpose of preparing municipalities to use institutional
finance and eventually market instruments like municipal bonds for capital
investment requirements. One of the highlights of the 8th Plan period was the
publication of the India Infrastructure Report. India Infrastructure Report was
widely considered a landmark document in the push towards privatisation and/
or commercialization of infrastructure creation and management, service
provision and regulatory and governance systems.

The 9th Plan (1997-2002) was greatly influenced by the India Infrastructure
Report. The Plan recognized the skewed nature of urban process in India with
urbanization and economic growth mainly concentrated in certain parts of the
country and certain parts of a state. It thus admitted that the IDSMT that had
been launched in the Sixth Plan to reduce regional disparities had largely been a
failure. The 9th Plan reiterated its commitment towards reducing regional
disparities; however, the primary responsibility for achieving the same was now
with the state governments who were urged to raise resources for their activities
from outside the Plan, specifically from financial institutions and capital markets.
The Plan sought to make ULBs and parastatal agencies accountable and financially
viable by cutting down on budgetary allocations for urban infrastructural
development. The Plan recognised that while larger municipalities may be in a
position to raise funds from capital market and financial institutions directly, the
smaller ULBs simply do not have the financial and technical capability to do so.
It thus proposed to create an ‘Urban Development Fund’ based on the principle
of ‘pooled finance’ to help smaller towns realize commercial borrowings.

In terms of focus, the Plan recommended streamlining of employment generation

programmes and creating housing stock for economically weaker sections and
lower income groups through rationalisation of existing centrally sponsored urban
poverty alleviation programmes. The sectoral objectives of the Ninth Plan were:
a) Development of urban areas as economically efficient, socially equitable
and environmentally sustainable entities;
b) Accelerated development of housing, particularly for the low income groups
and other disadvantaged groups;
c) Development and up gradation of urban infrastructure services to meet the
needs of a growing population;
d) Alleviation of urban poverty and unemployment;
e) Promoting accessibility and affordability of the poor to housing and basic
services;
f) Improvement of urban environment;
g) Promoting private sector participation in the provision of public infrastructure
and of the community and NGOs in urban planning and management of
specific component of urban services; and
h) Democratic decentralisation and strengthening of municipal governance.
The Hashim Committee, set up to review and streamline these programmes
suggested phasing out NRY, PMIUPEP and UBSP and introducing Swarna
Jayanti Shahari Rozgar Yojana (SJSRA) to reorganise self-employment and wage
29
Urban Development Plans, employment parts of the earlier programmes. The shelter upgradation component
Policies and Programmes
of NRY and PMIUPEP was merged with the National Slum Development
Programme (NSDP).

The SJSRY had two sub-schemes, namely, (a) Urban Self Employment
Programme and (b) Urban Wage Employment Programme. The SJSRY sought
to “provide gainful employment to the urban unemployed or underemployed
poor by encouraging the setting up of self-employment ventures or provision of
wage employment”. The implementation of the scheme was to be done through
the setting up of community organisations like Neighbourhood groups,
Neighbourhood Societies and Community Development Societies. The
responsibility of identifying beneficiaries, viable projects suitable for the area,
preparation of applications, monitoring of recovery and general support was
entrusted to the Community Development Societies. The Urban Self Employment
Programme included schemes on self employment through setting up Micro-
enterprises and Skill Development, confined to BPL beneficiaries who have
education up to the 9th standard, and Development of Women and Children in
Urban Areas for poor women who decide to set up self-employment ventures on
a group basis. The Urban Wage Employment Programme was conceived to
provide employment to persons Below Poverty Line in urban local bodies with a
population of less than 5 lakhs. The Plan also suggested that the responsibility
of distribution of water in urban areas should be given over to local bodies or to
the private sector. It encouraged private sector participation in construction and
maintenance of water supply and sanitation schemes.

In 1998, the National Housing and Habitat Policy (NHHP) was announced which
specifically emphasised that housing construction in both rural and urban areas
should be left in the hands of the private sector and that the government should
restrict itself to the role of a facilitator. The Policy promised “Shelter to All” by
the year 2001 but this promise was to be realized through the invisible hand of
the market which was supposed to ensure affordable housing to all if all
impediments to its efficient functioning were removed. As a follow up to the
recommendations of the NHHP 1998, the Two Million Housing Programme was
launched in 1998-99. It was a loan based scheme promoting the construction of
20 lakh additional housing units every year (13 lakh for rural areas and 7 lakh for
urban areas). Out of this, HUDCO was to meet the target of 4 lakh dwelling
units in urban areas and 6 lakh in rural areas annually. In 1999, the Draft National
Slum Policy was announced which proposed the integration of slum dwellers in
the mainstream of urban life through in-situ up gradation. The Draft Policy
included all underserviced settlements in its definition of slums and proposed
their up gradation and improvement as opposed to eviction. It also spoke about
granting tenure to slum dwellers inhabiting government land apart from providing
them with basic civic amenities. The Draft National slum Policy was never
adopted, however in 2001, a Rs. 20 billion subsidy based scheme called the
Valmiki Ambedkar Awas Yojana (VAMBAY) was started with the aim to provide/
upgrade shelter to urban slum dwellers.

In the 9th Plan period, two other major steps were taken to further the process of
liberalization of land and real estate markets. The first step was the repeal of the
Urban Land (Ceiling and Regulation) Act in 1999. The second major step was
taken in 2002 when the government allowed 100 percent Foreign Direct
Investment (FDI) in integrated townships, including housing, commercial
30
premises, hotels and resorts. FDI was also permitted in infrastructure projects Urban Development Policy
Perspectives in India
such as roads, bridges, mass rapid transit systems and for the manufacturing of
building materials. The minimum area to be developed was fixed at 100 acres.

The 2001 Census had shown that contrary to the expectations and predictions of
a wide array of actors, the rate of growth of urban population was steadily
declining. This has been attributed to cities becoming inhospitable to poor
migrants due to the promulgation of neo-liberal urban policies. However, the
10th Plan celebrates this fact and attributes it to “the success of rural development
programmes along with the limited availability of land for squatting in central
urban areas”. The Plan identifies urbanization as “a key determinant of the
economic growth in the 1980s and 1990s, boosted by economic liberalisation”.
The 10th Plan (2002-07) was prepared in the backdrop of the Union Budget of
2002-03 which had announced radical measures to push cities into carrying out
comprehensive urban reforms. The overriding thrust of the 10th Plan was to
promote overhauling of the legislative, governance and administrative structure
of cities through a set of market-friendly urban reforms and promotion of PPPs
in urban infrastructure and services. A lot of emphasis was placed on making
urban local bodies financially strong so that they have to rely less and less on
state transfers. To enable ULBs to raise their own resources the Plan advocated
reform in property tax, levying of user charges, increasing non-tax revenues,
controlling establishment costs, better utilization of municipal assets and
overhauling municipal accounting systems. These reforms, it was suggested,
would enhance the credit-worthiness of ULBs and make them capable to
mobilising funds from capital market and investors. The Plan also spoke about
substantially increasing investment in up gradation of urban infrastructure and
services but made it clear that central assistance in this regard would be made
conditional upon states and ULBs carrying out sector reforms, in particular better
standard of services and levying of user charges.

2.3.4 Current On-Going Programmes

The process of urban reforms which tentatively began in the 8th Plan reached its
high point when in December 2005, the Prime Minister launched the Jawaharlal
Nehru National Urban Renewal Mission (JNNURM). The JNNURM is basically
a reform linked incentive scheme for providing assistance to state governments
and urban local bodies (ULBs) in selected 63 cities, comprising all cities with
over one million population, state capitals and a few other cities of religious and
tourist importance for the purpose of reforming urban governance, facilitating
urban infrastructure and providing basic services to the urban poor. The total
budget of the Mission is estimated to be Rs. 1,26,000 crores out of which the
central government shall provide Rs. 50,000 crores. It is thus by far the single
largest initiative of the central government in the urban sector.
The broad framework of the Mission is as follows:
i) Preparation of City Development Plans (CDPs) by respective cities with a
20-25 years perspective.
ii) Sector-wise detailed project reports to be prepared by identified cities listing
projects along with their financial plans.
iii) A Memorandum of Agreement (MoA) to be signed between the central
government, state governments and ULBs containing the time bound
31
Urban Development Plans, commitment on the part of states/ ULBs to carry out reforms in order to
Policies and Programmes
access central funds under the Mission.
iv) Funding pattern in terms of percentages would be 35:15:50 (between Centre,
States and Urban Local Bodies) for cities with over 4 million population,
50:20:30 for cities with populations between one and four million, and
80:10:10 for other cities.
v) Assistance under the Mission to be given directly to nominated State Level
Nodal Agencies, who in turn would give the same to state government/ ULB
in the form of soft loan or grant-cum-loan or grant.
vi) The assistance thus provided would act as seed money to leverage additional
funds from financial institutions/capital markets.
vii) Public Private Partnership (PPP) to be the preferred mode of implementing
projects.

The Mission comprised of two sub missions, namely, Sub-Mission for Urban
Infrastructure and Governance and Sub-Mission on Basic Services to the Urban
Poor. The admissible components under both these sub-missions together include
urban renewal, water supply and sanitation, sewerage and solid waste
management, urban transport, slum improvement and rehabilitation, housing
for urban poor, civic amenities in slums. The priorities of the government become
even clearer when we look at the set of reforms that the state governments and
ULBs are supposed to carry out if they wish to avail central assistance under the
JNNURM. These reforms have been divided into two parts - Mandatory reforms
and Optional reforms.
i) Mandatory Reforms
A) Mandatory Reforms: State Level
The state governments seeking assistance under the JNNURM would be obliged
to carry out the following mandatory reforms:
a) effective implementation of decentralisation initiatives as envisaged in the
Constitution (seventy-fourth) Amendment Act, 1992;
b) repeal of Urban Land (Ceiling and Regulation) Act, 1976;
c) reform of rent control laws;
d) rationalisation of stamp duty to bring it down to no more than 5 percent
within seven years;
e) enactment of a public disclosure law;
f) enactment of a community participation law, so as to institutionalize citizens’
participation in local decision making; and
g) association of elected municipalities with the city planning function.

B) Mandatory Reforms: Municipal Level

a) Adoption of a modern, accrual-based, double entry system of accounting;
b) Introduction of a system of e-governance using IT applications, GIS and
MIS for various urban services;
c) Reform of property tax so as to raise collection efficiency to 85 per cent;
32
d) Levy of user charges to recover full cost of operation and maintenance within Urban Development Policy
Perspectives in India
seven years;
e) Internal earmarking of budgets for basic services to the urban poor; and
f) Provision of basic services to the urban poor, including security of tenure at
affordable prices.
ii) Optional Refroms
Apart from these mandetory reforms, there is a set of optional reforms common
to both state governments and ULBs, any two of which they are supposed to
implement each year. These include:
a) revision of bye-laws to streamline the approval process for construction of
buildings, development sites etc;
b) simplification of legal and procedural frameworks for conversion of
agricultural land for non-agricultural purposes;
c) introduction of property title certification;
d) earmarking of at least 20-25 per cent developed land in housing projects for
economically weaker sections and low income groups with a system of cross-
subsidisation;
e) introduction of computerised registration of land and property;
f) administrative reforms including reduction in establishment cost by
introducing retirement schemes and surrender of posts falling vacant due to
retirement;
g) structural reforms; and
h) encouraging public private partnership.
The JNNURM was accompanied by another scheme called the Urban
Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT)
which is more or less the same in content except for the minor difference that
towns under the UIDSSMT do not have to prepare City Development Plans.
5098 cities and towns which have a population of less than one million and are
thus not covered under the JNNURM come under the UIDSSMT. Earlier schemes
such as IDSMT and Accelerated Urban Water Supply Programme (AUWSP)
have been merged with the UIDSSMT. Similarly the Mega City Scheme and the
VAMBAY have been partially subsumed under the JNNURM.
There seems to be a formidable consensus that the urban reform agenda, as
enunciated in the JNNURM, the UIDSSMT and several other programmes and
policies, is one of the key instruments for keeping the country on the path of
high growth.
In this section you studied urban policies and their impact. Now, you should
be able to answer some questions relating to this section given in check your
progress-2.
Check Your Progress 2
Note: a) Write your answer in about 50 words
b) Check your answer with possible answers given at the end of the unit.
1) In which five-year plan period, the emphasis was laid on the preparation of
master plans? Please specify the major features of master plans?
33
Urban Development Plans, .......................................................................................................................
Policies and Programmes
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) Specify the main thrust of National Housing and Habitat Policy, 1998.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
3) What is the broad framework of Jawaharlal Nehru National Urban Renewal
Mission (JNNURM)?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

2.4 CHALLENGES OF MANAGING

URBANISATION
The challenge of urbanisation in India is to ensure service delivery at the enhanced
minimum standards that are necessary when planning ahead.
The major challenges of Urbanisation are the following:
• Strengthening ULBs through better capacity building and financial
management;
• Increasing the efficiency and productivity of cities with emphasis on reducing
incidence of poverty and promoting sustainable development;
• Provision of essential urban infrastructure, amenities and services with public
– private partnerships;
• Establishing regulatory/ institutional framework to oversee the functioning
of public and private sector;
• Integration of economic and spatial planning with a view to achieving a
rational spatial – economic development at city, state and national levels;
• Strict enforcement of anti – pollution laws and to reduce dangerous levels
of air pollution particularly in metro cities; and
• To establish a cost effective, energy efficient, socially desirable and transport
system.
34
The challenge of managing urbanisation will have to be addressed through a Urban Development Policy
Perspectives in India
combination of increased investment, strengthening the framework for governance
and financing, and a comprehensive capacity building programme at all levels
of government.

In this section you studied challenges of managing urbanisation. Now, you should
be able to answer some questions relating to this section given in check your
progress-3.

Check Your Progress 3

Note: a) Write your answer in about 50 words
b) Check your answer with possible answers given at the end of the unit.
1) What are the main challenges of Urbanisation?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) What needs to be done to facilitate sustainable urbanisation in India?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

2.5 LET US SUM UP

India is urbanising. This transition, which will see India’s urban population reach
a figure close to 600 million by 2031, is not simply a shift of demographics. It
places cities and towns at the centre of India’s development trajectory. In the
coming decades, the urban sector will play a critical role in the structural
transformation of the Indian economy and in sustaining the high rates of economic
growth. Ensuring high quality public services for all in the cities and towns of
India is an end in itself, but it will also facilitate the full realisation of India’s
economic potential.

India’s economic growth momentum cannot be sustained if urbanisation is not

actively facilitated. Nor can poverty be addressed if the needs of the urban poor
are isolated from the broader challenges of managing urbanisation. Cities will
have to become the engines of national development. India cannot afford to get
its urban strategy wrong, but it cannot get it right without bringing about a
fundamental shift in the mindset which separates rural from the urban.

India’s municipal corporations, municipalities and nagar panchayats, commonly

known as Urban Local Bodies (ULBs) need to be strengthened as local self-
35
Urban Development Plans, government. It has clear functions, independent financial resources, and autonomy
Policies and Programmes
to take decisions on investment and service delivery. They must also be made
accountable to citizens. Elements of this shift are already present in the local
government framework as reflected in the 74th Constitutional Amendment, the
Jawaharlal Nehru National Urban Renewal Mission (JNNURM), and the emphasis
placed on the urban sector by the Thirteenth Central Finance Commission.
To sum up, the steps needed to facilitate sustainable urbanisation in India are:
• Increasing investment in urban infrastructure.
• Engaging in renewal and redevelopment of urban areas including slums.
• Improving regional and metropolitan planning with integration of land use
and transportation.
• Ensuring access to services for all including the poor to meet the
recommended norms.
• Reforming systems of service delivery.
• Improving governance of cities and towns.
• Strengthening and securing the financial base of ULBs.

2.6 REFERENCES AND SELECTED READINGS

1) Background Paper on Urban Infrastructure, (Prepared for the 25th Meeting
of the Central Council of Local Government and Urban Development),
unpublished, NIUA New Delhi, December 1994.
2) Mohan, R., and S. Dasgupta, The 21st Century: Asia Becomes Urban’,
Economic and Political Weekly, January 15, 2005
3) National Environmental Engineering Research Institute (NEERI), Nagpur,
quoted in J.P. Singh “Challenges of Urbanisation and Environmental
Degradation in India”, Think India (Social Science Journal) Vo.5 No. 3, July
– September 2002, New Delhi
4) O. P. Mathur, India’s Urban Sector: An Assessment, National Institute of
Public Finance and Policy (NIPFP), New Delhi, 2005.
5) O.P.Mathur and S. Thakur, India’s Municipal Sector – A Study for the 12th
Finance Commission, NIPFP, New Delhi, 2004.
6) Report of the Parliamentary Standing Committee on Urban Development
(2010) quoted in the Economic Times (New Delhi), 22 April, 2010.
7) Task Force on Planning of Urban Development, p.68, Planning Commission,
Government of India, 1982.
8) UN-Habitat, State of the World’s Cities, Nairobi, 2006
9) UN – Habitat, State of the World’s Cities, Nairobi, 2008 Part 3.2 pp.130 –
140 “Cities and Climate Change”. City examples from UN – Habitat Best
Practices database, <www.bestpractices.org>
10) Urban Statistics Handbook, National Institute of Urban Affairs (NIUA), New
Delhi, 2008.
36
11) .‘Urbanisation and the Future of Cities’ in Base-cum-Issues paper Habitat II Urban Development Policy
Perspectives in India
(Istanbul Summit) , Ministry of Urban Development, Government of India,
(mimeo), August 1994.
12) Vaidya,C., Urban Issues, Reforms and Way Forward in India, Working Paper,
Department of Economic Affairs, Ministry of Finance, GOI, July 2009.
13) Report of the Parliamentary Standing Committee on Urban Development
(2010 )quoted in the Economic Times (New Delhi), 22 April, 2010.

2.7 CHECK YOUR PROGRESS- POSSIBLE

ANSWERS
Check Your Progress 1
1) What are the basic features of Urbanisation?
Urbanisation is characterised by continuous concentration of population and
activities in cities and towns. It is a process characterised by rural-urban
migration, natural increase in population and increase in municipal area.
Rapid urbanisation leads to massive growth of slum followed by misery,
poverty, unemployment, exploitation, inequalities, degradation in the quality
of urban life. Poor quality of rural-urban migration leads to poor quality of
Urbanisation.
2) Explain the pattern of India’s Urbanisation.
The pattern of urbanisation in India is skewed and is characterised by growth
of cities and towns in regions of agricultural surplus, stagnant or backward
region. The big cities attained inordinately large population size leading to
virtual collapse in the urban services and quality of life. Migration and natural
increases are the predominant factor of urban growth.
3) What are the basic problems in India’s rapidly growing cities?
Problem of urbanisation is manifestation of lopsided urbanisation, faulty
urban planning, urbanisation with poor economic base. Due to rising demand
for infrastructural provisions in the rapidly growing cities, and ineffective
supply of services and facilities, the cities and towns environment is
deteriorating in terms of :
1) poor housing
2) increase slums
3) inefficient transport
4) ineffective provision of water supply and sanitation
5) increase in air and water pollution
6) inadequate provision for social infrastructure.
Check Your Progress 2
1) In which five-year plan period, the emphasis was laid on the preparation
of master plans? Please specify the major features of master plans.
It was in the 3rd Plan (1961-66) that emphasized the preparation of Master
Plans for various towns and cities. The important features of these master
plans were 37
Urban Development Plans, a) designing of land use with a future perspective;
Policies and Programmes
b) a city without slums, or in other words, a standard ‘decent’ housing for
everyone;
c) detailed modernised Central Business District;
d) division of major land use into zones;
e) an efficient highway and transportation system,
f) adequate community facilities with residential areas divided into
neighbourhoods
2) Specify the main thrust of National Housing and Habitat Policy, 1998.
In 1998, the National Housing and Habitat Policy (NHHP) was announced
which specifically emphasised that housing construction in both rural and
urban areas should be left in the hands of the private sector and that the
government should restrict itself to the role of a facilitator. The Policy
promised “Shelter to All”. As a follow up to the recommendations of the
NHHP 1998, the Two Million Housing Programme was launched in 1998-
99.
3) What is the broad framework of Jawaharlal Nehru National Urban
Renewal Mission (JNNURM)?
The JNNURM is basically a reform linked incentive scheme for providing
assistance to state governments and urban local bodies (ULBs) in selected
63 cities, comprising all cities with over one million population, state capitals
and a few other cities of religious and tourist importance for the purpose of
reforming urban governance, facilitating urban infrastructure and providing
basic services to the urban poor. The total budget of the Mission is estimated
to be Rs. 1,26,000 crores out of which the central government shall provide
Rs. 50,000 crores. It is thus by far the single largest initiative of the central
government in the urban sector.
Check Your Progress 3
1) What are the main challenges of Urbanisation?
The major challenges of Urbanisation are the following:
• Strengthening ULBs through better capacity building and financial
management,
• Increasing the efficiency and productivity of cities with emphasis on
reducing incidence of poverty and promoting sustainable development,
• Provision of essential urban infrastructure, amenities and services with
public – private partnerships,
• Establishing regulatory/ institutional framework to oversee the
functioning of public and private sector;
2) What needs to be done to facilitate sustainable urbanisation in India?
Some of the steps that need to be taken are the following:
• Increasing investment in urban infrastructure
• Engaging in renewal and redevelopment of urban areas including slums
• Ensuring access to services for all including the poor
38
 Urban Development Policy
UNIT 3 URBAN DEVELOPMENT Perspectives in India

PROGRAMMES IN INDIA

Structure
3.1 Introduction
3.2 Urban Development Programmes Initiated Since Independence
3.3 Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
3.4 Mission Toolkit
3.5 Mission Framework
3.6 Mission Process
3.7 Monitoring Framework
3.8 Outcomes of the Project
3.9 Status of the Mission
3.10 Let Us Sum Up
3.11 References and Selected Readings
3.12 Check Your Progress-Possible Answers

3.1 INTRODUCTION
As per 2001 population census 285.35 million people reside in urban areas. It
constitutes 27.8% of the total population of the country. In post-independence
era, while population of India has grown three times, the urban population has
grown five times. The rising urban population has also given rise to increase in
the number of urban poor. As per 2001 estimates, the slum population is estimated
to be 61.8 million. The ever increasing number of slum dwellers causes
tremendous pressure on urban basic services and infrastructure. In order to cope
with massive problems that have emerged as a result of rapid urban growth, the
government of India has launched many programmes since independence. One
of the illustrious examples is JNNURM launched recently to rejuvenate urban
development in India.
After studying this unit you should be able to:
• Describe various urban development programmes launched in India since
independence.
• Discuss JNNURM.

3.2 URBAN DEVELOPMENT PROGRAMMES

INITIATED SINCE INDEPENDENCE
Urban development programmes with a focus on reduction and alleviation of
poverty, has been one of the objectives of five-year plans in the country since the
beginning of the planned era. This was, however, brought into the core of planning
exercise only during the Fifth Year Plan. The consumption levels of different
commodities were projected in this plan by taking higher growth rates for people
in lower consumption brackets. Extensive research has since then been carried
out to study the dimensions of poverty, its temporal trend, spatial pattern etc. 39
Urban Development Plans, This led to identification of theoretical solutions for reduction of poverty and
Policies and Programmes
launching of programmes during the past Five Year Plans.
An analysis of the government policies and programmes and investment pattern
during the fifties, sixties and seventies reveals a distinct bias for urban areas.
Public sector investment in infrastructure and basic services improved the level
of services in urban centers, which accentuated the rural urban disparity. These
investments were concentrated mostly in the large cities that attracted private
investments as well as subsidized institutional funds. This resulted in creation of
employment opportunities at a higher level of productivity earnings than in rural
areas, widening the gap between their income levels. This period also witnessed
the creation of a number of Boards and Corporations at the state level and
development authorities at the city level. Considerable funds were routed through
these agencies that improved the level of services for at least a section of the
urban population.

Removal of poverty received attention initially in the Fifth Five Year Plan. The
earlier plans did not emphasize on proper analysis of the dimension of poverty.
The Fifth Plan noted that the consumption levels of the bottom 30 per cent of the
country’s population remained below the minimum of Rs.40.6 per capita per
month at 1972-73 prices. No distinction was, however, made between rural and
urban poverty. The plan stressed poverty could be removed by promoting
economic growth and through proper implementation of the national level
programmes like Minimum Needs Programme. The Sixth Plan addressed the
problem of poverty in a more focused manner and recognized that economic
growth process by itself was not enough to tackle poverty. It noted that about 51
per cent of the rural population and 41 per cent of the urban population were
living below the poverty line in 1979-80. Specific programmes like Integrated
Development of Small and Medium Towns, Minimum Needs Programme, Urban
Basic Services, Integrated Rural Development Programme, National Rural
Development Programme (NRDP) etc. were recommended for urban and rural
areas. The Sixth Plan showed a distinct bias in favour of rural poverty by
implementing specific programmes. The programmes that have been launched
since independence have been briefly discussed in the following section.

i) Integrated Development of Small and Medium Towns (IDSMT): The

programme was launched in 1979-80 basically for developing small and
medium towns partly by providing basic services to poor and also by
improving their economic conditions so that the growth of metro cities could
be arrested. Initially, the scope of the programme was restricted to towns
with population below one hundred thousand as per the 1971 Census. It had
been decided in the Eighth Plan to include cities having population of five
hundred thousand as per the Census of 1991.

ii) Low Cost Sanitation Programme (LCS): The goal of providing sanitation
facilities to eighty per cent of urban population was fixed in the early eighties
with the announcement of the UN Decadal Programme for Water Supply
and Sanitation. Accordingly, a centrally sponsored scheme was launched in
1980-81, with the objective of eliminating manual scavenging through
conversion of dry latrines. It covered all the households, which have dry
latrines and those having no latrines including slum and squatter settlements.
40
 Under this scheme, loan and Central subsidy were both channeled through Urban Development
Programmes in India
HUDCO.
iii) Shelter and Sanitation for Pavement Dwellers (SSPD): This programme
was launched in large urban areas including metropolitan cities, having sizable
shelter less population. The Tenth Plan has pointed out that the provision of
subsidy under the scheme has to be adequate to make it feasible for the
NGOs to take up shelter construction. The grants per bed should also be
revised to achieve the objective of providing a sufficient number of nights –
shelters for the homeless women and children. The Pay and Use component
of this scheme is being merged with the Nirmal Bharat Abhiyan of VAMBAY.
iv) Accelerated Urban Water Supply Programme (AUWSP): This is another
centrally sponsored scheme launched during the Eighth Plan for providing
water to the towns having less than 20,000 population as per the Census of
1991, operationally under the State PHED to be funded by the Central
Government, State Government and concerned ULBs on 50:45:5 ratio. The
Centre met the entire cost in Union Territories.
v) National Slum Development Programme (NSDP): The NSDP initiated in
1996 as a scheme of Special Central Assistance for slum improvement, has
been providing additional central assistance to state governments to provide
water supply and sanitation among other facilities to the slums.
vi) VAMBAY (Valmiki-Ambedkar Awas Yojona): This scheme has been
launched in 2001-02 to provide shelter or upgrade the existing shelter of the
people living below poverty line in urban slums implemented in partnership
with state governments who will set up the implementation machinery,
arrange for land where required and for the credit component for housing.
The state funds under the scheme will be in proportion to their slum
population.
vii) Nehru Rozgar Yojana (NRY): In order to alleviate the conditions of urban
poor, a Centrally Sponsored Programme - Nehru Rozgar Yojana - was
launched at the end of the Seventh Five Year Plan (October 1989) with the
objective of providing employment to the urban unemployed and
underemployed poor. The Central Government indicated its overall
contribution while the essential task of identifying, earmarking and
coordinating the relevant sectoral inputs was undertaken by the State
Governments. The NRY consisted of three schemes namely (i) the Scheme
of Urban Micro Enterprises (SUME); (ii) the Scheme of Urban Wage
Employment (SUWE); and (iii) the Scheme of Housing and Shelter
Upgradation (SHASU). During the Eighth Plan, 92% of the available funds
were utilized but for the shortfall in the number of dwelling units upgraded/
in progress under SHASU, the targets have been achieved under all the other
schemes.

viii)Urban Basic Services for the Poor (UBSP): The UBSP Programme was
implemented as a Centrally Sponsored Scheme during the Eighth Five Year
Plan with the specific objectives of effective achievement of the social sector
goals; community organization, mobilization and empowerment; and
convergence through sustainable support system. The expenditure on the
41
Urban Development Plans, Programme was being shared on a 60:40 basis between the Central and the
Policies and Programmes
State Governments and UTs (with legislatures). Further, the per capita
expenditure on any slum pocket is Rs.75/- in the first year and Rs.50/- from
the second year onwards after the basic infrastructure is developed.

ix) Prime Minister’s Integrated Urban Poverty Eradication Programme

(PM IUPEP): Recognizing the seriousness and complexity of urban poverty
problems, especially in the small towns, the PMI UPEP was launched in
November, 1995 applicable to all Class II urban agglomerations with a
population ranging between 50,000 and one lakh subject to the condition
that elections to local bodies have been held.

x) The Swarna Jayanti Shahari Rozgar Yojana (SJSRY): The Nehru Rojgar
Yojna (NRY) and Prime Minister’s Integrated Urban Poverty Eradication
Programme (PMI UPEP) were two important direct poverty alleviation
programmes in urban areas. Although their thrust was on employment and
income generation for urban poor, these had components for provision of
basic services as well. PMI UPEP was launched in the year 1995-96 with the
objectives of employment generation, shelter upgradation, social development
and community empowerment. It may, however, be noted that during 1997,
the three programmes of UBSP, NRY and PMIUPEP have been merged into
a single employment generation programme called Swarna Jayanti Shahari
Rojgar Yojona (SJSRY).

The SJSRY is a Centrally Sponsored Scheme applicable to all the urban areas
with expenditure to be shared in ratio 75:25 between the Centre and States/UTs.
The programme has two sub-schemes namely: (a) Urban Self –Employment
Programme and (b) Urban Wage Employment Programme.

The self-employment and wage employment components of the NRY and

PMIUPEP have been re-organised under this single programme. The shelter
upgradation components of both NRY and PMIUPEP have been merged with
the National Slum Development Programme.

The SJSRY seeks to provide gainful employment to the urban unemployed or

underemployed poor by encouraging the setting up of self-employment ventures
or provision of wage employment. This programme is based on the creation of
suitable community structures on the UBSP pattern and delivery of inputs under
this programme was devised through urban local bodies and similar community
institutional structures and rests on the foundation of community empowerment.
Community organisations like Neighbourhood Groups (NHGs), Neighbourhood
Committees (NHCs) and Community Development Societies (CDSs) have been
set up in the target areas based on the UBSP pattern. The CDSs is the focal point
for purposes of identification of beneficiaries, preparation of applications,
monitoring of recovery and generally providing whatever other support is
necessary to the programme. The CDSs identifies viable projects suitable for
that particular area.

In this session you read about various urban development programmes initiated
since independence in India by the government . Now answer the questions given
in Check Your Progress-1.
42
Check Your Progress 1 Urban Development
Programmes in India
Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) Briefly describe the programme launched for urban sanitation.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) Write short note on Nehru Rozgar Yojana (NRY).
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

3.3 JAWAHARLAL NEHRU NATIONAL URBAN

RENEWAL MISSION (JNNURM)
Urban Renewal, with a focus on inclusive development of urban centers, is one
of the thrust areas in the National Common Minimum Programme of the
Government and accordingly Jawaharlal Nehru National Urban Renewal
Mission (JNNURM) was launched on 3rd December 2005 with an investment
of Rs.50,000.00 crores in the Mission period for seven years beginning
from 2005-06. The Mission aims to encourage reforms and fast-track
infrastructure development with a focus on efficiency in urban infrastructure
and services delivery mechanism, community participation, and accountability
of ULBs towards citizens. The primary objective of the JNNURM is to
create economically productive, efficient, equitable and responsive cities. To
achieve this objective, the Mission focuses on integrated development of
infrastructure services; securing linkages between asset creation and
maintenance for long-run project sustainability; accelerating the flow of
investment into urban infrastructure services; planned urban development;
renewal of inner- city areas and universalisation of urban services to ensure
balanced urban development.

The Mission has also succeeded in getting the state and city governments to
commit themselves to structural reforms which the Central government had failed
to achieve despite adopting several measures and incentive schemes proposed
since early nineties through other programmes and legislations (Kundu, et.al
2007). In fact, a set of 23 mandatory reforms have to be introduced by the
respective state governments and cities as per the commitments made by them in
the Memorandum of Agreement (MoA) at the beginning of the mission period.
43
Urban Development Plans, The JNNURM is thus a mission of macro economic growth wherein ground
Policies and Programmes
conditions have been created through reform measures and infrastructural
investment in 65 select cities for attracting domestic and foreign investment.
The JNNURM has two sub-missions for the mission cities, viz, (1) Urban
Infrastructure and Governance (UIG) and (2) Basic Services to the Urban Poor
(BSUP).

3.3.1 Mission Strategy

i) Planned urban perspective frameworks for a period of 20-25 years (with 5
yearly updates) indicating policies, programmes and strategies of meeting
fund requirements would be prepared by every identified city. This perspective
plan would be followed by preparation of Development Plans integrating
land use with services, urban transport and environment management for
every five year plan period.

ii) Cities/Urban Agglomerations/Parastatals will be required to prepare Detailed

Project Reports for undertaking projects under identified areas.

iii) Private Sector Participation in development, management and financing of

Urban Infrastructure would be clearly delineated.

iv) Funds for the identified cities would be released to the designated State Nodal
Agency, which in turn would leverage, to the extent feasible, additional
resources from the financial institutions/private sector/capital market.

v) Funds from Central and State Government will flow directly to the nodal
agency designated by the State as grant. The nodal agency will disburse
central assistance to ULBs or para-statal agencies as the case may be, as soft
loan or grant-cum-loan or grant.

vi) A revolving fund will be created to meet the operation and maintenance
costs of the assets created under the Mission.

3.3.2 Mission Objectives

i) Focused attention to integrated development of infrastructural services in
the cities covered under the Mission.
ii) Secure effective linkages between asset creation and asset management so
that the infrastructural services created in the cities are not only maintained
efficiently but also become self-sustaining over time.
iii) Ensure adequate investment of funds to fulfill deficiencies in the urban
infrastructural services.
iv) Planned development of identified cities including peri-urban areas, out
growths, urban corridors, so that urbanization takes place in a dispersed
manner.
v) Scale up delivery of civic amenities and provision of utilities with emphasis
on universal access to urban poor.
vi) To take up urban renewal programme, i.e., re-development of inner (old)
cities area to reduce congestion.

44
3.3.3 Mission Components Urban Development
Programmes in India
i) Admissible Components: Projects pertaining to the following will be
admissible under the Sub-Mission on Urban Infrastructure and Governance.
i) Urban Renewal i.e. redevelopment of inner (old) city areas (this would
include items like widening of narrow streets, shifting of industrial/
commercial establishments from non-conforming to ‘conforming’ areas
to reduce congestion, replacement of old and worn-out water pipes by
new/higher capacity ones, renewal of sewerage/drainage/solid waste
disposal systems, etc).
ii) Water Supply (including de-salination plants) and sanitation,
iii) Sewerage and Solid Waste Management,
iv) Construction and improvement of drains/storm water drains,
v) Urban Transport, including roads, highways/expressways/ MRTS/metro
projects,
vi) Parking lots/spaces on Public Private Partnership basis,
vii) Development of heritage areas,
viii)Prevention and rehabilitation of soil erosion/landslides only in case of
Special Category States where such problems are common, and
ix) Preservation of water bodies.
Note: Land cost will not be financed except for acquisition of private land
for schemes/ projects in the North Eastern States and hilly States viz
Himachal Pradesh, Uttaranchal and Jammu and Kashmir.

ii) Inadmissible Components: Projects pertaining to the following will not be

admissible under the Sub-Mission:
i) Power
ii) Telecom
iii) Health
iv) Education
v) Wage employment programme and staff component

3.3.4 Mission Coverage

Keeping in view the paucity of resources and administrative constraints in taking
up all cities and towns under this intensive urban infrastructure improvement
programme, it is suggested that under JNNURM only selected cities/Urban
Agglomerations (UAs) as per 2001 Census will be taken up, as per norms/criteria
mentioned below.
A) Cities/UAs with 4 million plus population as per 2001 census
B) Cities/UAs with 1 million plus but less than 4 million population as per
2001 Census
C) Selected Cities/UAs (State Capitals and other cities/UAs of religious/historic
and touristic importance)
D) The cities should have elected bodies in position.
45
Urban Development Plans,
Policies and Programmes 3.4 MISSION TOOLKIT
The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) requires
cities applying for assistance to lay down a time schedule for implementing the
proposed reform agenda. The reform agenda consists of reforms that are to be
undertaken: (i) by urban local bodies (ULBs) and (ii) by the state governments.
This Toolkit is designed to seek information from the applicant cities that will
enable the Ministry of Urban Development (MoUD) or the Ministry of Urban
Employment and Poverty Alleviation (MoUEPA) to set the following: (i) the
benchmarks on each of the constituents of the reform agenda, and (ii) a time
schedule for implementing the reform agenda. The timeline for implementing
the reform agenda will be attached to the Memorandum of Agreement (MoA).
In addition, Toolkits separately provide details of the criteria that are proposed
to be used for appraising project proposals and the timeline for urban reform
agenda. The Urban Reforms shall broadly fall into two categories:

(a) Mandatory reforms and (b) Optional Reforms.

All the mandatory and optional reforms shall be implemented by the State/ ULB/
parastatals within the mission period. Core reforms at ULB/Parastatal level aims
at process re-engineering through deployment of technology to enable more
efficient, reliable, timely services in a transparent manner. The other set of reforms
are framework related at State level.

Reforms
State Level ULB Level
Mandatory Reforms Mandatory Reforms
Implementation of decentralization Adoption of modern, accrual-based
measures as envisaged in 74 th double entry system of accounting in
Constitution Amendment Act. States Urban Local Bodies
should ensure meaningful association/
engagement of ULBs in planning
function of parastatals as well as delivery
of services to the citizens.
Repeal of Urban Land Ceiling and Introduction of system of e-governance
Regulation Act. using IT applications like, GIS and MIS
for various services provided by ULBs
Reform of Rent Control Laws balancing Reform of property tax with GIS, so that
the interests of landlords and tenants. it becomes major source of revenue for
Urban Local Bodies (ULBs) and
arrangements for its effective
implementation so that collection
efficiency reaches at least 85% within
next seven years.
Rationalization of Stamp Duty to bring Levy of reasonable user charges by ULBs/
it down to no more than 5% within next Parastatals with the objective that full cost
seven years. of operation and maintenance or recurring
cost is collected within next seven years.

46
 Urban Development
Enactment of Public Disclosure Law to Internal earmarking within local body, Programmes in India
ensure preparation of medium term fiscal budgets for basic services to the urban
plan of ULBs/Parastatals and release of poor.
quarterly performance information to all
stakeholders.
Enactment of Community Participation Provision of basic services to urban poor
Law to institutionalize citizen’s including security of tenure at affordable
participation and introducing the concept prices, improved housing, water supply,
of Area Sabha in urban areas. sanitation and ensuing delivery of other
already existing universal services of the
Government for education, health and
social security.
Assigning or associating elected ULBs
with “city planning function”. Over a
period of seven years, transferring all
special agencies that deliver civic
services in urban areas to ULBs and
creating accountability platforms for all
urban civic service providers in
transition.
Repeal of Urban Land Ceiling Act
Reform of Rent Control Act

Optional Reforms(Common to State and ULBs)

Revision of bye-laws to streamline the approval process for construction of
buildings, development of sites etc.
Simplification of legal and procedural frameworks for conversion of
agricultural land for non-agricultural purposes.
Introduction of Property Title Certification System in ULBs.
Earmarking at least 20-25% of developed land in all housing projects (both
Public and Private Agencies) for EWS/LIG category with a system of cross
subsidization.
Introduction of computerized process of registration of land and property.
Revision of bye-laws to make rain water harvesting mandatory in all buildings
and adoption of water conservation measures.
Bye-laws for reuse of recycled water.
Administrative reforms i.e. reduction in establishment by bringing out voluntary
retirement schemes, non-filling up of posts falling vacant due to retirement
etc., and achieving specified milestones in this regard.
Structural reforms
Encouraging Public Private Partnership

Note: 1. Any two optional reforms to be implemented together by State & ULBs/Parastatals
in each year.
2. All the reforms (mandatory as well as optional) shall be implemented by State/
ULB/Parastatal within the Mission period.

47
Urban Development Plans, The State Governments and the ULBs including parastatal agencies wherever
Policies and Programmes
necessary would execute Memorandum of Agreement (MoA) with Government
of India indicating their commitment to implement identified reforms. MoA would
spell out specific milestones to be achieved for each item of reform. Signing of
MoA will be a necessary condition to access central assistance. This tripartite
MoA would be submitted along with Detailed Project Reports (DPRs). The central
assistance will be predicated upon the State Governments and the ULBs/
Parastatals agreeing to the reforms platform.

3.5 MISSION FRAMEWORK

The framework was evolved to provide incentives for reforms in urban
development and thereby facilitate sustainable investments in urban infrastructure.

3.5.1 Institutional Arrangement for Policy Oversight

National Steering Group (NSG): At the national level, the JNNURM shall be
steered by the NSG. It shall be chaired by the Minister of Urban Development
(MOUD) and co-chaired by Minister of State (Independent charge) Urban
Employment and Poverty Alleviation (MoUEPA). The NSG, a coordinating arm
of the Government of India, shall provide policy oversight and evolve policies
to facilitate the achievement of JNNURM objectives. The NSG shall review the
agenda of reforms and may add additional reforms to the identified reforms. The
NSG shall review the progress of the Mission. Besides, the NSG shall monitor
the progress status of urban development and associated reforms in eligible cities.

Under the Sub-Mission on Basic Services for Urban Poor, there will be a high
level committee chaired by Minister for Urban Employment and Poverty
Alleviation with Joint Secretary (UEPA) as Member-Convener.

3.5.2 Institutional Arrangements for Mission Operationalisation

A) Sub-Mission Directorates (SMD): At the national level, the Mission shall
be operationalised through two Sub-Mission Directorates one under the
charge of Joint Secretary in Ministry of Urban Development (MoUD) and
other under Ministry of Urban Employment and Poverty Alleviation
(MoUEPA) for ensuring effective co-ordination with State Governments and
other agencies for expeditious processing of the project proposals. The Joint
Secretary in charge of each Mission Directorate would be designated as
Mission Director. National Technical Advisor will be a member of both the
Directorates.
The two Sub-Mission Directorates established are:
i) Sub-Mission Directorate for Urban Infrastructure and Governance:
The Sub-Mission of Urban Development and Governance has the charter
of achieving development of urban infrastructure with a focus across
sectors in the urban context.
ii) Sub-Mission Directorate for Basic Services to the Urban Poor: The
Sub-Mission for Basic Services to the Urban Poor shall focus on access
to infrastructure for the urban poor. This Sub-Mission shall have a seven-
point charter: security of tenure, housing, water supply, sanitation,
education, health and social security cover.
48
B) Central Sanctioning and Monitoring Committee: There will be two Urban Development
Programmes in India
Central Sanctioning and Monitoring Committees headed by respective
Secretaries for Urban Infrastructure and Governance, and Basic Services to
the Urban Poor. The CSMCs shall be entrusted with sanction and monitoring
of the projects and associated reforms.

C) State-Level Steering Committee (SLSC): In order to identify, decide and

prioritize the projects for inclusion in JNNURM, an apex body in each State,
namely the SLSC shall be constituted. The SLSC shall screen and prioritize
the identified projects. The identified projects shall be recommended to the
respective CSMCs for sanction. The SLSC shall also monitor the
implementation of the projects and review the progress of urban reforms in
the State. In pursuing these tasks, the SLSC shall be assisted by the State
Level Nodal Agency (SLNA), to be appointed for the said purpose.

D) State Level Nodal Agency (SLNA): The scheme would be implemented by

a SLNA designated by the respective State governments. The SLNA would
perform various functions, key ones being:
• Assisting ULBs/Parastatal agencies in the preparation of CDPs and DPRs
and in training and capacity building.
• Appraising projects submitted by ULBs/ Parastatal agencies.
• Obtaining sanction of State Level Sanctioning Committee for seeking
assistance from the Central Government under NURM.
• Managing grants received from the Central and State governments.
• Monitoring the implementation of reforms as committed in the MoA
and submitting quarterly reports to that effect.
JNNURM Directorate, Ministry of Urban Development (MoUD), has evolved a
state level mechanism for third party Monitoring and Review of the projects
sanctioned under the JNNURM Sub-Mission-I (Urban Infrastructure and
Governance) component. It is intended that the review and monitoring process
in the 63 Mission cities will keep track of the physical and financial progress of
projects throughout the project development life-cycle. This toolkit is to enable
the State Level Nodal Agencies (SLNAs) set in motion the process of appointing
the Independent Review and Monitoring Agencies (IRMAs) for monitoring and
review of all projects implemented under JNNURM by urban local bodies,
parastatals and other state agencies.

At the state level, it is envisaged that a Program Management Unit (PMU) shall
be established and housed in each SLNA to provide strategic coordination and
support for all JNNURM related reforms, projects, capacity building initiatives
and other activities in the State. The PMU within the SLNA will play the key
role of coordination and oversight of the IRMA on behalf of the SLNA. Likewise
at the city or urban local body level, it is envisaged that a Project implementation
Unit (PIU) shall be established and housed in the ULBs of the Mission Cities, to
take the lead charge with respect to implementation of all JNNURM projects
and reforms in the city. The PIU will play a key role in facilitating the work of
the IRMA and coordinate between the IRMA and the Project Executing Agency
(PEA).

49
Urban Development Plans, 3.5.3 Institutional Arrangement for Advisory Support
Policies and Programmes
For successful deployment of assistance targeted through JNNURM, advisory
support is envisaged. Advisory assistance is expected through the Technical
Advisory Group (TAG) comprising professionals across the legal, environment,
social and urban infrastructure sectors that would assist the CSMCs, SLSC, SLNA
and ULBs. The TAG shall provide advisory support at the macro and micro level
for obtaining financial assistance within the provisions of JNNURM. Detailed
Project Reports would be scrutinized by the Technical wings of the Ministry or
if necessary by specialized/technical agencies before placing such proposals for
sanction by Central Sanctioning and Monitoring Committee which are submitted
by the states. The Committee would assign higher priority in sanctioning projects
of urban renewal, water supply including sanitation, sewerage, solid waste
management, drainage, urban transport including roads.

3.6 MISSION PROCESS

The JNNURM is expected to cater to the non-mission towns and cities under the
two components, namely: (i) Urban Infrastructure and Governance (UIG) of
UIDSSMT and (ii) Integrated Housing and Slum Development Programme
(IHSDP). The programme is expected to cover all other Census towns under
Urban Infrastructure Development Scheme for Small and Medium Towns
(UIDSSMT) . The existing programme of IDSMT, AUWSP has been subsumed
under UIDSSMT. Likewise, the existing VAMBAY and the discontinued NSDP
have been subsumed in the IHSDP.
The objective of the Mission would be met through preparation of City
Development Plans (CDPs), Detailed Project Reports (DPR) and signing of MoA
between the Centre, State, and Urban Local Body (ULB). Every city is expected
to formulate a City Development Plan (CDP) indicating policies, programmes
and strategies, and financing plans. The CDP would include identification of
projects leading to the formulation of Detailed Project Reports (DPRs). The
Urban Local Bodies (ULBs) / Parastatal agencies have to prepare DPRs for
undertaking projects in the identified spheres. The projects should be planned so
as to optimize the life-cycle costs. A revolving fund would be created to meet the
O & M requirements of assets created, over the planning horizon.

Balancing the need for

ULB STATE /ULB
development with
available resources.
CDP
CDP Leveraging the
REFORM resources to facilitate
AGENDA greater development.
DPR Integrating existing
DPR infrastructure and
enhancing its capacity/
life for desired
performance and usage.
CAPITAL IMPROVED
INVESTMENTS
Strengthening local
MANAGEMENT
bodies with replicable
models/ formats/
processes.
THE PROCESS

Source: M. Mathur, (2009); Urban Reforms: JNNURM, Presentation, National Institute of

50 Urban Affairs, New Delhi.
In order to seek JNNURM assistance, projects need to be developed in a manner Urban Development Policy
Perspectives in India
that would ensure and demonstrate optimization of the life-cycle costs over the
planning horizon of the project. On approval of the CDPs and DPRs, the State
Government and ULBs including parastatal agencies, wherever necessary would
execute a MoA with GoI indicating commitment along with a timeline to
implement identified reforms. The pattern of funding is illustrated below:

FINANCING PATTERN
Source: M. Mathur, (2009); Urban Reforms: JNNURM, Presentation, National Institute
of Urban Affairs, New Delhi.

The first installment of 25% will be released on signing of Memorandum of

Agreement by the State Government/ULB/Parastatal for implementation of
JNNURM projects. The balance amount of assistance shall be released as far as
possible in three installments upon receipt of Utilization Certificates to the extent
of 70% of the grants (Central and State) and subject to achievement of milestones
agreed for implementation of mandatory and optional reforms at the State and
ULB/Parastatal level as envisaged in the Memorandum of Agreement.

3.7 MONITORING FRAMEWORK

• The MoUD/MoUEPA would periodically monitor the schemes through
designated representatives.
• SLNA would send quarterly progress report to the MoUD/MoUEPA.
• Upon completion of the Project, the SLNA through the State Government
shall submit a completion report of activities undertaken as a part of
JNNURM.
• The CSMC may meet as often as required to sanction, review and monitor
the progress of projects sanctioned under the Mission.
• Monitoring of progress and implementation of reforms would be outsourced
to specialized/technical agencies. 51
Urban Development Plans,
Policies and Programmes 3.8 OUTCOMES OF THE PROJECT
On completion of the Mission period of seven years, it is expected that ULBs/
Parastatals will achieve the following outcomes:-
a) Modern and transparent budgeting, accounting, financial management
systems designed and adopted for all urban services and governance functions.
b) City-wide framework for planning and governance will be established and
become operational.
c) All urban residents will be able to obtain access to a basic level of urban
services.
d) Financially self-sustaining agencies for urban governance and service delivery
will be established through reforms to major revenue instruments.
e) Local services and governance will be conducted in a manner that is
transparent and accountable to citizens.
f) e-Governance applications will be introduced in core functions of ULBs/
Parastatals resulting in reduced cost and time of service delivery processes.

3.9 STATUS OF THE MISSION

As a result of the reforms implementation, the community participation law has
been passed by nine states, public disclosure law has been enacted by 16 states,
Maharashtra and Andhra Pradesh have abolished the urban land ceiling legislation,
nine states have rationalized stamp duty to the desired level of 5%, 29 local
bodies have shifted to accrual-based double entry system of accounting, 45 local
bodies out of 65 mission cities have started earmarking funds for the urban poor,
three states of North East have for the first time passed legislation for constitution
of urban local bodies and Jharkhand held urban local body election after a gap of
22 years. Twenty four states have introduced computerized process of registration
of land and property and 47 city bodies have undertaken revision of by-laws for
rain water harvesting.

Status at a Glance
1. Number of cities covered under JNNURM 65
2. Number of City Development Plans (CDPs) appraised 64
3. Number of Memorandum of Agreements (MoAs) signed 65
4. Number of projects approved (Till 09-Feb-10) 524
5. Total approved project cost ( For 524 projects) 58283.33
crores
6. Central Share (ACA) released for Projects (till 31-Mar-10): 11280.69
crores
7. Number of States for which projects approved 30
(Out of 31States/UTs)
8. Number of Cities for which projects approved (Out of 65 cities) 62
9. Number of completed projects 61

52
In this section, you have studied about JNNURM, mission toolkit, mission Urban Development
Programmes in India
framework, mission process, monitoring framework, outcomes of the project
and status of the mission, and now answers the questions given in Check Your
Progress-2.

Check Your Progress 2

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What are the objectives of JNNURM?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
2) Briefly write various components of JNNURM.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

3.10 LET US SUM UP

Urban development programmes with a focus on reduction and alleviation of
poverty, has been one of the objectives of five-year plans in the country since the
beginning of the planned era. This was, however, brought into the core of planning
exercise only during the Fifth Five Year Plan. In order to cope with massive
problems that have emerged as a result of rapid urban growth, it has become
imperative to draw up a coherent urbanization policy/strategy to implement
projects in select cities on mission mode. The need for the mission also rose in
order to harness the potential of reforms in urban infrastructure, for National-
Level Reform-linked Investments, for sustainable infrastructure development
and efficiency enhancements. The JNNURM is the outcome of the mission
strategy and is in vogue since 2005 for fastening the process of urban development.

3.11 REFERENCES AND SELECTED READINGS

Asthana, M.D. and Sabir Ali (2004), Urban Poverty in India, New Delhi, Council
for Social Development and Uppal Publishing House.
Council for Social Development (2006), India: Social Development Report, Delhi,
Oxford University Press.
Jha, Ramanath, and Nasrin Siddiqui, (2000), People-friendly cities: Explorations
in India Urban Governance, Mumbai, UNICEF. 53
Urban Development Plans, Kadekodi, G.K. and G.V..S.N. Murty, (1992), Poverty in India: Data Base Issues,
Policies and Programmes
New Delhi, Vikas Publishing House Pvt Ltd.
Kundu, A. Bagchi, S. and Kundu, D. (1999), “Regional Distribution of
Infrastructure and Basic Amenities in Urban India”, Economic and Political
Weekly, 34/28/1999.
Kundu, Amitabh (2001), “ Institutional Innovations for Urban Infrastructure
Development-The India Scenario”, in Good Urban Governance Campaign-India
Launch Learning from one another, UNCHS (Habitat), New Delhi, September
4 to 6.
Kundu, Amitabh and Darshini MaAhadevia (2002), Poverty and Vulnerability
in a Globalising Metropolis :Ahmedabad, New Delhi, Manak Publications Pvt
Ltd.
Kundu, Amitabh and Niranjan Sarangi (2005), “Issue of Urban Exclusion”,
Economic and Political Weekly, August13.
Kundu, Amitabh, (1993), In the Name of the Urban Poor: Access to Basic
Amenities, New Delhi, Sage Publications India.
Sen, Amartya, (1981), Poverty and Famines: An Essay on Entitlement and
Deprivation, Delhi, Oxford University Press.
United Nations Development Programme (UNDP) (2006), Human Development
Report 2005, New Delhi.
Ministry of Urban Development (2005), Jawaharlal Nehru Urban Renewal
Mission-Overview; Government of India, New Delhi; https://jnnurmmis.nic.in
Ministry of Urban Development (2005), Jawaharlal Nehru Urban Renewal
Mission-Toolkit; Government of India, New Delhi;
https://www. jnnurm.nic.in /nurmudweb/toolkit/Overview.pdf
www.indiaurbanportal.in/ JnNURM
Infrastructure Leasing & Financial Services Limited (ILFS) India: IL&FS IDC
Services offered for JNNURM and UIDSSMT Schemes, Undated Presentation.
Indian Infrastructure: JNNURM Progress Report, February 2009
JNNURM information from the Centre for Civil Society, New Delhi
M. Mathur, (2009); Urban Reforms: JNNURM, Presentation, National Institute
of Urban Affairs, New Delhi.
Economic Times (15 Nov 2009); Way Forward for India’s Urban Reforms, Special
Report, New Delhi; http://economictimes.indiatimes.com / features/sunday-et/
special-report/Way-forward-for-Indias-urban-reforms/articleshow/5231672.cms
Ministry of Urban Development (2007), Jawaharlal Nehru Urban Renewal
Mission- Toolkit for Appointment of Independent Review and Monitoring
Agencies for projects.

54
 Urban Development
3.12 CHECK YOUR PROGRESS – POSSIBLE Programmes in India

ANSWERS
Check Your Progress-1

1) Briefly describe the programme launched for urban sanitation.

The goal of providing sanitation facilities to eighty per cent of urban

population was fixed in the early eighties with the announcement of the UN
Decadal Programme for Water Supply and Sanitation. Accordingly, a centrally
sponsored scheme was launched in 1980-81, with the objective of eliminating
manual scavenging through conversion of dry latrines. It covered all the
households, which have dry latrines and those having no latrines including
slum and squatter settlements. Under this scheme, loan and Central subsidy
were both channeled through HUDCO.

2) Write short note on Nehru Rozgar Yojana (NRY).

In order to alleviate the conditions of urban poor, a Centrally Sponsored

programme - Nehru Rozgar Yojana - was launched at the end of the Seventh
Five Year Plan (October 1989) with the objective of providing of employment
to the urban unemployed and underemployed poor. The Central Government
indicated its overall contribution while the essential task of identifying,
earmarking and coordinating the relevant sectoral inputs was undertaken by
the State Governments. The NRY consisted of three schemes namely (i) the
Scheme of Urban Micro Enterprises (SUME); (ii) the Scheme of Urban Wage
Employment (SUWE); and (iii) the Scheme of Housing and Shelter
Upgradation (SHASU). During the Eighth Plan, 92% of the available funds
were utilised and but for the shortfall in the number of dwelling units
upgraded/in progress under SHASU, the targets have been achieved under
all the other schemes.

Check Your Progress 2

1) What are the objectives of JNNURM?

The various objectives of JNNURM are as follows:
a) Focused attention to integrated development of infrastructural services
in the cities covered under the Mission.
b) Secure effective linkages between asset creation and asset management
so that the infrastructural services created in the cities are not only
maintained efficiently but also become self-sustaining over time.
c) Ensure adequate investment of funds to fulfill deficiencies in the urban
infrastructural services.
d) Planned development of identified cities including peri-urban areas, out
growths, urban corridors, so that urbanization takes place in a dispersed
manner.
2) Briefly write various components of JNNURM.
Two types of components under JNNURM are described below:
55
Urban Development Plans, i) Admissible Components: Projects pertaining to the following will be
Policies and Programmes
admissible under the Sub-Mission on Urban Infrastructure and Governance.
a) Water Supply (including de-salination plants) and sanitation
b) Sewerage and Solid Waste Management
c) Construction and improvement of drains/storm water drains.
d) Urban Transport, including roads, highways/expressways/ MRTS/metro
projects.
ii) Inadmissible Components: Projects pertaining to the following will not be
admissible under the Sub-Mission:
i) Power
ii) Telecom
iii) Health
iv) Education

56
 Urban Development
Programmes in India

MEDS-043: Dynamics of Urban Planning and

Development
Block Unit Nos. Unit Titles

I SUSTAINABLE DEVELOPMENT
Unit 1 Sustainable Development: An Overview
Unit 2 Public Administration and Sustainable Development
Unit 3 Natural Resource Management and Environment
Unit 4 Environment Management System
II URBAN DEVELOPMENT PLANS, POLICIES AND
PROGRAMMES
Unit 1 Urban Development Policies: A Global Overview
Unit 2 Urban Development Policy Perspectives in India
Unit 3 Urban Development Programmes in India
III URBAN REFORMS
Unit 1 Legal and Structural Reforms
Unit 2 Decentralization: An Overview
Unit 3 Decentralized Planning Process
Unit 4 Rural–Urban Continuum
IV MUNICIPAL FINANCE
Unit 1 Fiscal Decentralisation: A Global Overview
Unit 2 Fiscal Decentralisation in India: An Overview
Unit 3 Municipal Finance in India
V DISASTER MANAGEMENT
Unit 1 Meaning and Classification of Disaster
Unit 2 Disaster Management – Recent Trends
Unit 3 Community Based Disaster Management
Unit 4 Disaster Management Strategies

57
 MEDS-043
Dynamics of Urban Planning
and Development
Indira Gandhi National Open University
School of Extension and Development Studies

Urban Development Plans, Policies and

Programmes 2