hpec (ahluwalia) report 2011 - icriericrier.org/urbanisation/events/30-5-14/hpec_shimla.pdf · hpec...
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Goa
HPEC (Ahluwalia) Report 2011
Highlights and Recommendations
May 30, 2014
Capacity Building Workshop
Shimla, Himachal Pradesh
Urban Share of Total Population in 2011
India and Some Selected Countries
48
India Indonesia China Mexico Korea Brazil
31
78 83
87
(per cent)
2
Urban Share of Total Population in 2011
India and 12 Selected States
(per cent)
31
India
3
Himachal Pradesh
Assam Meghalaya Arunachal Pradesh
Sikkim Tripura Jammu and Kashmir
Nagaland Manipur Uttarakhand Mizoram Chandigarh
10 14
20 23
25 26 27 29 29 30
52
97
Except for Mizoram and Chandigarh, all the states have urbanisation levels that are lower
than the national average of 31 per cent in 2011. Himachal Pradesh has by far the lowest.
Per capita income and urbanisation levels: States 2011
Source: Estimates based on Census of India data and CSO.
4
Arunachal Pradesh
Assam
Chandigarh
Himachal Pradesh
Jammu & Kashmir Manipur
Meghalaya
Mizoram
Nagaland Sikkim Tripura
Uttarakhand
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
0 20000 40000 60000 80000 100000 120000
Per Capita Gross State Domestic Product 2011-12
Urb
anis
atio
n 2
01
1
Besides Chandigarh and Mizoram, Jammu and Kashmir and Manipur have urbanisation levels
higher than expected given their income levels.
India is urbanising with increasing number of metropolitan cities
Metropolitan cities are cities with population over 1 million or 10 lakh (Class IA and Class IB cities); Other cities are
cities with population between 1 lakh and 10 lakh
Urban agglomeration is a continuous urban spread of a town and its adjoining outgrowths, or two or more physically
contiguous towns with or without outgrowths of such towns. An urban agglomeration must have at least one statutory
town and its total population should not be less than 20,000 (as per Census 2001).
5
India’s urban population to increase
• From 377 million today to 600 million by 2031
• From 52 metropolitan cities in 2011 to 87 by 2031
• Of the 12 states and union territories, only Jammu & Kashmir
has Srinagar which is a metropolitan city
6
Cities other than metropolitan cities
State Number of cities by population size (2011)
Below 20,000 20,000 – 49,999 50,000 – 99,999 1 lakh and above
Arunachal Pradesh 14 3 0 0
Assam 74 22 7 7
Himachal Pradesh 49 6 0 1
Jammu and Kashmir 58 4 5 2
Manipur 24 4 0 1
Meghalaya 6 2 1 1
Mizoram 19 2 0 1
Nagaland 3 4 2 0
Sikkim 8 1 0 0
Tripura 16 6 0 1
Uttarakhand 55 14 3 4
2001 2011
All India 1362 3894
Assam 45 126
Jammu and Kashmir 3 36
Tripura 10 26
Uttarakhand 12 42
Census Towns Statutory Towns
2001 2011
All India 3799 4041
Assam 80 88
Jammu and Kashmir 72 86
Tripura 13 16
Uttarakhand 74 74
Need to Recognise Urbanisation
Census towns have at least 75% of male working population engaged in non-agricultural activities, have a population of at
least 5,000 and have a population density of at least 400 per sq. km
Statutory towns have local bodies like municipal corporations, municipal committees, etc. irrespective of their
demographic characteristics
7
2001 2011
Arunachal Pradesh 0 26
Nagaland 8 19
2001 2011
Arunachal Pradesh 17 1
Nagaland 1 7
The opposite observed in...
Census Towns Statutory Towns
In 6 out of the 12 states, there was parallel increase in Census Towns and Statutory Towns.
In 4 states, there is need to recognise urbanisation which is a more typical experience across India. .
In 2 states, we see the opposite trend.
Much more increase in Census Towns than in Statutory Towns
Composition of municipal solid waste in India (2011): per cent
Biodegradables 51.3
Recyclables 17.5
Inert 31.2
• Moisture content - 47%
• Calorific value - 7.3 mega joules per kg
Calorific value is the quantity of energy that can be released by complete combustion of a material.
8
Source: Report of the Task Force on Waste to Energy (Volume 1), Planning Commission, 2014
9
Deteriorating situation of municipal solid waste in India
2001 2011 2031*
Volume of municipal solid waste (million tonnes per year)
45.9 68.8 165.0
Per capita waste generated (kg/day)
0.4 0.5 0.7
1996 2011
Biodegradables (per cent) 42.2 52.3
Plastics/rubber (per cent) 0.6 7.9
* Projections from the Report of the Task Force on Waste to Energy (Volume 1), Planning Commission, 2014, which estimates current municipal
solid waste generation at 62 million tonnes per year.
Source: National Environmental Engineering Research Institute (NEERI)
Source: Central Pollution Control Board (CPCB) and India Infrastructure Research.
Comparing growth of GDP: India and the states
10
0
2
4
6
8
10
12
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
0
2
4
6
8
10
12
14
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
per
cen
t p
er c
ent
Arunachal Pradesh
Assam
India
India Chandigarh
Himachal Pradesh
11
Comparing growth of GDP: India and the states p
er c
ent
per
cen
t
0
1
2
3
4
5
6
7
8
9
10
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
0
2
4
6
8
10
12
14
16
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
India
India
Jammu & Kashmir
Manipur
Meghalaya Mizoram
12
Comparing growth of GDP: India and the states p
er c
ent
per
cen
t
0
5
10
15
20
25
30
35
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
0 2 4 6 8
10 12 14 16 18
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
India
India
Sikkim
Nagaland
Tripura
Uttarakhand
Structural Transformation
37.7
47 52
42
Source: CSO, Eleventh Five Year Plan and the Mid-Term Appraisal Document of the Eleventh Five Year Plan
80
70
60
50
40
30
20
10
0
1970-71 1980-81 1993-94 1999-2000 2009-10 2030-31
63
75
Urb
an
sh
are
of
GD
P
(per
cen
t)
Rapid Growth has meant that as Indian economy goes through a major structural
transformation, urban share of GDP is rising rapidly
13
Role of rural-urban migration
• Pressure of rural-urban migration will increase further with
• increasing role of industry and services sector in growth
• with more labour absorbing growth resulting from increasing integration with the
world economy
• Many cities will experience peripheral expansion, with smaller municipalities and large
villages surrounding the core city becoming part of the metropolitan area.
per
cent
Contribution to Increase in Urban Population
Net Rural-Urban
Migration
Census 2011
figures awaited
Migration has played a
minor role in urbanisation
14
Important Messages from HPEC (Ahluwalia) Report 2011:
The challenge of faster and more inclusive growth
• To sustain growth rates of GDP of 8 per cent per annum, or
• To sustain per capita income increases of about 5.5 to 6.5 per cent per annum
• Faster GDP growth has to come from industry and services, since agriculture at best
can grow at 4 to 4.5 per cent per annum
• To make growth of industry and services more labour intensive
modernise labour laws (to provide greater flexibility in hiring and firing labour)
provide social protection to those who do not find productive employment in the
organised sector.
• Fortunes of the rural sector are crucially linked to the manner in which growth in
the industrial and services sector unfolds
15
• Decline in China’s working age population from 2010 onwards
• Decline in Brazil’s working age population from 2020 onwards
• Increase in India’s working age population will continue till 2040
and begin to decline mildly after that
• Demographic dividend can be reaped if
Youth is empowered with education, skills and innovative capacity
Employment opportunities expand
From demographic opportunity to demographic dividend
54
56
58
60
62
64
66
68
70
72
74 %
of
wo
rkin
g a
ge p
op
ula
tio
n
India
China
Brazil
16
Implications for urban development
The ground reality
• Cities and towns of India are visibly deficient in the quality of services they provide
• Current state of service delivery is far short of what is needed to realise the economic
potential of urban areas
The way forward
• Creating urban infrastructure
• Reforming governance for service delivery
• Providing access to universal service standards for all including the poor
• Consciously building rural-urban synergy
• Recognising importance of urban transport
• Integrating transport and land use planning
• Focussing on metropolitan planning
17
Service Standards
• Water Supply : 100 per cent piped water, 24x7 flow, and 135 lpcd consumption per capita
• Sewerage : Underground sewerage with 100 per cent collection and treatment of
waste water
• Solid Waste : 100 per cent collection, transportation and treatment
• Urban Roads
: Area under roads 11 per cent area for cities
7 per cent for towns
: Road density (km per sq. km.) 12.25 km per sq. km. for cities
7 km per sq. km. for towns
• Storm Water
Drains : Network covering 100 per cent road length on both sides of the road
• Urban Transport : Rail-based and road-based Mass Rapid Transit System for cities with
population1 mn and above, city bus service for smaller cities and towns
• Street Lighting : Illuminance: 35 Lux for all cities and towns; 40 m spacing for major roads,
45 m for collector roads, and 50 m for access road spaces
• Traffic Support
Infrastructure : Details by city size in the Committee’s Report
18
19
Urban Infrastructure Investment requirement (including for
slum redevelopment and capacity building): 2012- 2031
The HPEC provided an estimate of Rs 39 lakh crore as the urban infrastructure requirement
over the period 2012-2031.
Assuming:
• All the unserved and underserved population between 2012 and 2031 will be covered.
• All the additional population will be covered.
• Service standards will match the norms set by the Ministry of Urban Development.
• This estimate is based on 2009-10 prices.
• This estimate does not include primary education, primary health, electricity distribution
and land cost.
• GDP is assumed to increase at 8 per cent per annum for the 20-year period
Composition of Urban Infrastructure Investment requirement of
Rs 39 lakh crore (including for slum redevelopment and capacity
building): 2012- 2031
Rs
cro
re a
t 2
00
9-1
0 p
ric
es
4500000
3000000
1500000
0
T o t a
l E
x p e n d i t u
r e
U r b
a n
R o a d
s
U r b
a n
T r a
n s p o r t
R e n e
w a l a
n d R
e d e v e l o
p m
e n t
i n c l u
d i n
g S
l u m
s
W a t e
r S
u p p l y
S e w
e r a
g e
S t o
r m W
a t e
r D
r a i n
s
C a p a c i t y B
u i l d
i n g
Tra
ffic
S u p p o r t
I n f r
a s t r
u c t u
r e
S o l i d
W a s t e
M a n
a g e m
e n t
S t r e
e t L i g
h t i n
g
O t h
e r S
e c t o
r s
3 9 1 8 6 7 0
1 7 2 8 9 4 1
4 4 9 4 2 6
4 0 8 9 5 5
3 2 0 9 0 8
2 4 2 6 8 8
1 9 1 0 3 1
1 0 1 7 5 9
9 7 9 8 5
4 8 5 8 2
1 8 5 8 0
3 0 9 8 1 5
% Increase Five-Year Plan
15 XII
12 XIII
8 XIV
8 XV
20
Share of Major Sectors in Total Investment Requirement of
Urban Infrastructure
Urban roads (backlog very large) 50 per cent
Transport and traffic support infrastructure 16 per cent
Water, sewerage, solid waste management, storm
water drains, street lighting 24 per cent
Other sectors 9 per cent
Total Rs 34 lakh crore
Sectors Rs lakh crore
Urban roads 17.3
Urban transport 4.5
Traffic infrastructure 1.0
Water supply 3.2
Sewerage 2.4
Storm water drains 2.0
Solid waste management 0.5
Street lighting 0.2
Other sectors 3.1
Slum Redevelopment Rs 4.1 lakh crore
(12% of infra investment)
Capacity Building Rs 1.0 lakh crore
(2.5 % of infra investment)
21
Projections for Financing (per cent of GDP)
Large sums, but financeable if
• Government of India scales up urban development funding to 0.25 per cent of GDP
per year for 20 years
• State governments enter into Constitutionally mandated revenue-sharing arrangement
with ULBs
• State governments provide enabling environment for ULBs to reform
• ULBs aggressively push reforms to increase own revenues, i.e.,
Access to borrowing and PPP is made possible by working on a
Revenue Model which makes ULBs credit-worthy and market-worthy
2011-12 2031-32
22
Governance is Crucial
And so is Capacity
• The JNNURM has created dynamism in the Indian urban sector which has long suffered
neglect. But progress in implementing reforms under the JNNURM has
been slow. The Mission has generally exposed the lack of capacity to prepare and
implement projects in urban infrastructure within an integrated framework of a City
Development Plan.
• Financing is crucially dependent on the reform of institutions and the capacity
of those who run the institutions for service delivery and revenue generation.
• Municipal entities need to be empowered to raise ‘own’ sources of revenue, predictable
transfers from state governments, and other transfers from the GoI
and state governments, to help them discharge the larger responsibilities assigned to
them by the 74th Constitutional Amendment.
• The ULBs themselves need to carry out reforms to strengthen their finances, and
improve service delivery
• Building and developing a Municipal cadre is very important
23
Recommendations
A. Major recommendations on governance
Administrative
• One ministry of Housing and Urban Affairs at national level
• Urban Development, Urban Transport, and Housing in one department at state level
• Unified Mission (NIJNNURM)
• Unified command under an empowered and accountable Mayor
Regulatory framework
• Urban Utility Regulator
• Local Body Ombudsman
• Local Funds Audit Commission
Reforms for service delivery
• Corporatisation
• Inter municipal cooperation
• Legislative reforms at state level to facilitate PPPs
• Use of e-governance
Planning
• Town Planning related
• Metropolitan and Regional Planning related
25
1. Tax reforms
• Introduce a ‛Local Bodies Finance List’ in the Constitution
• Empower ULBs with ‛exclusive’ taxes
• Constitutionally ensure sharing by the state governments of a pre-specified
percentage of their revenues from all taxes on goods and services with ULBs
• Provide for formula-based transfers and grants-in-aid to ULBs from the divisible pool
• Abolish octroi and entry taxes in all states
• Reform property tax so as to levy tax on constructed building under an Area Based
System and levy of vacant land tax on the basis of ready-reckoner capital value
B. Major recommendations on financing
26
2. Unlocking land value
• Tapping land-based financing sources including conversion charges, betterment
charges, impact fees, and development charges
• Pricing of Floor Space Index (FSI) above a certain limit, within overall planning guidelines
• Preparing city-wide inventory of land assets
• Putting in place a transparent and accountable mechanism for monetisation of public land
with due attention to the needs of the poor and the marginalised
B. Major recommendations on financing...contd.
27
3. Reforms to strengthen non-tax revenues
• Municipal Service Regulator should be assigned the responsibility of revising user
charges regularly. Even when different segments of the population are charged
differently, the cross-subsidisation should be such that the overall O&M cost is
recovered and a minimal surplus generated. Automatic indexation will ensure
smooth increase over time without the challenge of having to defend cumulative
adjustment every few years.
• User charges to be so structured as to meet O&M cost, debt servicing, and
depreciation towards the cost of the project. In addition, they must also generate
some surplus to enable building the equity base of ULBs, supported, where
appropriate, with viability gap funding (VGF)
• Levy water and sewerage charges separately rather than build into the property tax
• Introduce parking fee to enhance revenue streams and promote the use of public
transport
• Collect trade licensing fee on the basis of a self assessment return
B. Major recommendations on financing...contd.
28
Other reforms
• State governments to set up state financial intermediaries to work with small ULBs
• Government of India to create a ‛Regulatory Guidelines Handbook for Municipal Borrowings’
• ULBs to prepare ‛Intended Use Plans’, requiring them to prepare a borrowing programme
based on their investment needs and repayment capacity
• Remove fixed cap of 8 per cent on annual interest on municipal bonds to make the
bonds attractive
• HUDCO to have a professional Board; to receive benefits available to infrastructure
financing companies; and be regulated by the Reserve Bank of India
B. Major recommendations on financing...contd.
29
• Set up five Indian Institutes of Urban Management
• Create Reform and Performance Management Cells (RPMC) at Government of India, and
also at state government level
• Build/Reform Municipal cadres in all states
• Train 300 officers from the Indian Administrative Services (IAS) and other central services
annually as urban specialists
• Infuse funds and new talent into existing Schools of Urban Planning
• Promote think tank initiatives in urban policy through Centres of Excellence/Innovation
• Encourage lateral hiring of professionals
C. Major capacity building initiatives
30
Thank You