New Delhi, Nov 2 (UNI) Urbanisation is not a side effect of economic growth, it is an integral part of India's development process, says World Bank.
Stating that India's urban areas make a major contribution to the country's economy, it added although less than 1/3 of India's people live in cities and towns, these areas generate over 2/3 of the country's gross domestic product (GDP) and account for 90 per cent of government revenues.
India's towns and cities have expanded rapidly as increasing numbers migrate to towns and cities in search of economic opportunity. Slums now account for 1/4 of all urban housing. In Mumbai, more than half the population lives in slums, many of which are situated near employment centres in the heart of town, unlike in most other cities in developing countries.
To meet the needs of India's soaring urban populations, government will have to address critical issues like poor local governance, weak finances, inappropriate planning that leads to high costs of housing and office space, it said.
It added that issues of critical infrastructure shortages and major service deficiencies that include erratic water and power supply, and woefully inadequate transportation systems have also to be addressed.
The World Bank has listed lack of modern planning, multiplicity of local bodies that obstruct efficient planning and land use, rigid master plans and restrictive zoning regulations that limit availablility of land for building, constricting cities' abilities to grow in accordance with changing needs as urban challanges in India.
It said building regulations that limit urban density - such as floor space indexes - reduce the number of houses available, and thus push up property prices. '' Outdated rent control regulations reduce the number of houses available on rent, poor access to micro finance and mortgage finance limit the ability of low income groups to buy or improve their homes, policy, planning, and regulation deficiencies lead to a proliferation of slums.'' Further, weak finances of urban local bodies and service providers constraints their ability to expand the trunk infrastructure that housing developers need to develop new sites, it added.
On the service delivery front, the World Bank held the view that most services were delivered by city governments with unclear lines of accountability and service providers were unable to recover operations and maintenance costs and depended on the government for finance.Independent regulatory authorities that set tariffs, decided on subsidies, and this lead to poor enforcement of quality service standards. City governents have strong bias towards adding physical infrastructure rather than providing financially and environmentally sustainable services.
The World Bank said most urban bodies in India do not generate the revenues needed to renew infrastructure, nor do they have the creditworthiness to access capital markets for funds. It calls for holistic urban transport planning which should focus on meeting the needs of large number of people who walk or ride bicycles.
On environment, it said the deteriorating urban environment in India is taking a toll on people's health and productivity and diminishing their quality of life.