Urban Budget Allocation and Priorities
The examination of the current Budget allocation reveals significant insights into measures that need attention from the three tiers of government to optimize the utility of funds designated for urban development in India.
Budget Allocation Overview
- The urban affairs ministry consistently receives about 2% of the Budget outlay, although the distribution among urban sectors and initiatives has shifted.
- Urban housing allocation has decreased as focus remains on completing existing projects rather than launching new ones.
- There is an increased allocation for transport (notably Metro rail) and basic services, with the discontinuation of the Smart Cities mission and introduction of the Urban Challenge Fund.
Urban Housing Initiatives
- Allocations focus on subsidies for PMAY-U Phases 1 and 2, and industrial housing schemes.
- PMAY-U Phase 1: More than 75% earmarked for subsidies, emphasizing completion of 3.2 million pending houses for economically weaker sections (EWS).
- Importance of enhancing access to affordable home loans due to increased beneficiary share in construction costs.
- PMAY-U Phase 2: Focuses on a home loan interest subsidy scheme (ISS) with allocations mainly for EWS and low-income groups.
- Industrial housing allocations support rental housing development for industrial workers, encouraging balanced urban growth.
Metro and Urban Development
- Steady rise in Metro rail budgetary allocations highlights its vital role in urban transport.
- Emphasis on well-planned, dense development along metro lines, with recommendations for implementing transit-oriented plans like the Delhi Master Plan 2041.
Basic Urban Services and ULBs
- Capital investments in basic services like water and sanitation are covered under AMRUT and Swachh Bharat Mission.
- Urban local bodies (ULBs) are encouraged to improve creditworthiness to attract private investment, relying on own revenue to cover expenses.
- Challenges faced by ULBs due to the need for state government approval for revenue adjustments, like property tax revisions, are highlighted.
