Improving Urban Infrastructure

Abstract

The investment needs in basic infrastructure that determine the pace of development of cities are considerably higher than the quantum of flow of funds. The key indicators of the major urban services reveal that there is a failure to achieve even moderate success in service delivery. The components of the traditional approach to financing urban services have been grants and loans from government-owned financial institutions on basis of guarantees. The urban local bodies (ULBs) in India are weak in terms of capacity to raise both resources and financial autonomy. Given the major risks involved, private sector has also largely stayed away from urban infrastructure projects, until very recently. These have resulted in huge gap between the demand and supply of urban basic services. The present government has launched several Missions to promote urban development in the country through strict adherence to reforms to strengthen financial and governance capacities of ULBs and participating in competition at state and city levels to qualify for accessing resources apart from other grants-based missions. In this context, the article discusses the investment requirements, progress of programmatic interventions for urban development in India and their financing mechanism. The article focuses on recently completed Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and the newly launched National Urban Mission programmes.