How can urban allocations be improved

Source: The post how can urban allocations be improved has been created, based on the article “Updated urban definitions could optimize our resource allocation” published in “ Live mint” on 6th March 2024.

UPSC Syllabus Topic: GS Paper 2- polity- Devolution of powers and finances up to local levels and challenges therein.

News: The article discusses the need to empower local governments in India for economic growth and urban development. It suggests using advanced data and tools for city identification, tailored resource allocation for different city sizes, and a local-government-centric approach for better urban planning and resource distribution. How can urban allocations be improved?

A detailed article on Local Governments in India can be read here

What are the issues in empowering local governments in India?

Limited Financial Resources: Local governments in India receive minimal funding. They get only 4% of the divisible pool, with cities receiving a meager 1.4%, significantly less than countries like China, where urban investment was 2.8% of GDP from 2000-2014.

Outdated Census Data: Decisions are based on the 2011 Census, which doesn’t accurately reflect the current pace of urbanization.

Limited Modern Criteria: Current definitions do not adequately consider modern urban characteristics like mobility, labor markets, and built-up forms.

Complex and Varied Administrative Structures: There are 88 municipal acts across different states and union territories, leading to inconsistent governance and planning standards.

One-size-fits-all approach: Different types of cities, like large metropolitan areas and smaller towns, have unique needs. A one-size-fits-all approach doesn’t work well for resource allocation.

For more information read Article 1, Article 2

How can urban allocations be improved?

Advanced Identification of Cities: Use geospatial tools and alternative data for more accurate city identification, moving beyond reliance on just the 2011 Census data. Examples include population projections from the Union Ministry of Health and Family Welfare, night-time luminosity, consumption expenditure, and data from vehicle and property registrations.

Special Focus on Metropolitan Areas: Allocate resources to metropolitan areas based on outcomes and goals related to economic growth, sustainability, and equity, covering the entire area and treating census towns within these areas as urban.

Differentiated Resource Allocation: The 16th Finance Commission should encouraged to differentiate between large, mid-sized, and smaller cities for resource allocation, considering their unique needs and capabilities.

Utilization of Districts for Allocation: Recognize the district as a key unit for resource allocation, especially in the context of India’s unique urbanization pattern, to facilitate integrated development.

Local-Government-Centric Approach: Directly allocate resources to urban local bodies based on their share of the total urban population, focusing more on local needs rather than a state-centric model.

What is the expected outcome?

Implementing these changes in urban allocations can lead to better urban planning and development. This approach is crucial for India’s economic growth and achieving ‘Viksit Bharat’, especially aiding smaller cities with populations under 100,000, by setting them on the path of planned urbanization and development.

Question for practice:

Examine the challenges facing the empowerment of local governments in India and propose strategies for improving urban allocations.