Note4Students

From UPSC perspective, the following things are important :

Prelims level: Budget

Mains level: Budget, proposals for Urban planning and urban reforms, sustainable cities

Context

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24. It has been marked by areas of continuity over the past three years. However, we should not overlook the missed opportunities for more fundamental reforms while celebrating continuity.

Areas of focus

Some areas like the continued boost in capital expenditure have received wide attention. Others, such as the reform of urban development and planning processes have received less.
As India grows, the quality of urbanisation will determine the quality of economic growth, and vice versa.
From this perspective, the continued focus on improving urban infrastructure and land-use efficiency is welcome.

Urban planning reforms and efficient land use: Cities will be encouraged to undertake urban planning reforms, adopting practices that use land more efficiently, creating resources for urban infrastructure, making urban land affordable, and improving inclusivity.
Infrastructure financing: Cities will be incentivized to ring-fence user charges on infrastructure and undertake property tax governance reforms so that they are creditworthy enough to issue municipal bonds.
Infrastructure Development fund for Tier 2 and 3 cities: A fund will be created by using shortfalls in priority sector lending to create infrastructure in Tier 2 and Tier 3 cities. Rs 10,000 crore is the expected amount to be made available for this fund. States will be expected to adopt user charges to access these resources.
Improving sewage and waste management: Proposals on improvements in infrastructure for handling sewage and managing waste.

The 2021-22 budget focused on providing urban infrastructure public transport, waste management and universal water supply.
In 2020-21, the budget, like this year, proposed improvements in sewage treatment and waste management to do away with manual cleaning.
It proposed tax concessions to encourage overseas borrowing for specified municipal bonds. In 2019, the government announced, and then formulated a model tenancy law to promote rental housing.

States and city administrators have themselves come around to the benefits of market-oriented reforms, obviating some of the necessity for the Centre to champion them. This could be driven by the emergence of cities as engines of growth, the resultant commodification of urban land markets and, therefore, the increasing focus on land-use efficiency.
Greater openness to new ideas of urban planning could also be driven intellectually by changes in the outlooks of professionals in the field urban planners, architects and administrators who are increasingly able to work directly with state and municipal governments.

It could be that while cities are increasingly economically significant, they are not yet significant enough politically for politicians to look at urban governance issues more seriously.
While the 73rd and 74th amendments to the Constitution devolved many powers to local governments, state governments continue to hold most of the aces. This could change rapidly in the future as India transitions from rural to urban.

While urban governance systems are improving, India’s cities are still plagued by issues that need fundamental changes. Our building by-laws, restrictions on land use and zoning still create inefficiencies and make our cities unaffordable, dirty and polluted. The government’s steps to increase capacity building and to create expert committees to propose reforms in these areas is commendable. However, the pace of these proposals is inadequate and need to prioritised to meet urban India’s challenges.