February 20, 2022

Budget Direction for Urban Remains the Same No Relief to People

Tikender Singh Panwar

BUDGETARY proposals placed by the finance minister Nirmala Sitharaman on February 1, 2022, for the fiscal year 2022-23 provided no relief to the people, especially those living in urban centres who were severely hit by the pandemic. With meteoric spiked unemployment in the last few years, it was expected that this year budget will at least address this problem partially. However, the much-awaited cry for an urban employment guarantee remained unaddressed. It is estimated that over 200 million people are without work, most of them in the urban centres. There was a dire need for addressing this problem however the budget remained silent on it.

The only positive thing that has emanated from the budget speech is that the finance minister has accepted that the current model of urban development is not sustainable. Having said that the finance minister stated that a new paradigm is required for the urban sector and a team of experts will be constituted to examine this. Also, simultaneously urban development with a new paradigm understanding will be taught in some five centres of excellence in the country. A budgetary outlay has also been marked for that.

So far so good. But going by the past of the current union government and the understanding of urbanisation through some of the documents and works laid out by NITI Aayog and the ministry of housing and urban development, it is more pivotal that we become more cautious about their gameplans. Already urban planning is being taught in various colleges and universities. But this new idea, it seems emanates from (a) the NUPF -National Urban Policy Framework, a document which was prepared by this government a few years ago and (b) NITI Aayog. The NUPF is a disaster on urbanisation that speaks about communalising the urban design. It speaks about ancient cities and 10 sutras- the philosophical principles of governance in the cities- a completely communal outlook. Likewise, NITI Aayog has been advocating massive changes in land use planning – a sample of which we are witnessing in Andaman & Nicobar Islands redevelopment and Lakshadweep.


So in the given situation in over 5,000 towns and cities across India where unemployment is soaring, informal sector and informal workers are finding it difficult to even maintain their livelihoods, costs of urban utilities like water, electricity and other services are increasing, the health sector is focussing more on curative care, housing has become such a big issue that homelessness has increased to over 10 million, eviction of slum dwellers instead of providing them with land tenure rights, urban development is mainly planned by large transnational giants, mobility of the working people is costing more, pollution has become a major hazard; it was expected that these issues will be addressed in the budget with adequate support.

However, this has not been done. Let us take a few examples to substantiate our point.


The much tom-tommed budgetary allocation for urban development from Rs 73,850 crore to Rs 76,549 crore is actually a fall in the real GDP ratio. It is 0.5 per cent of GDP in the current year, whereas for 2022-23, it will be 0.47 per cent, which is a fall in actual terms. Adding the inflation rate of more than 5 per cent to it, the actual allocation on urban development is far less than the current year and too less than what is required to be spent.


The finance minister rightly pointed out that by the year 2047, 50 per cent of India would be urban. But with the current pace and design, we will have more people living in urban slums rather than in decent houses. So, what was expected from the budget was that there will be more support for formal housing. Already formal housing has fallen from near six per cent to three per cent in the last decade.

The PMAY has gotten an outlay of Rs 48,000 crore which is roughly the same as last year. But adding the rate of inflation to it, actually, the allocation is lesser than 2021-22. But what is important is the sluggish pace with which houses are constructed. Of the total sanctioned 1.14 crore housing units for urban areas only 53.42 lakh houses, roughly 47.6 per cent have been completed so far. Another addition to housing was the ARHC-Affordable Rental Housing Complex Scheme. This is important in the context of the informal sector. But the government is pushing for more private sector intervention in it. The government decided to hand over the already constructed houses under various schemes like the JNNURM, BSUP etc., on a rental basis. The sluggish progress can be ascertained from the fact that out of a total of 86,065 houses that are already built, merely 1,934 have been allotted and in this too Chandigarh has allotted 88 per cent -1,707 houses.  Now a promise for 80 lakh houses in the new budget is another target with no spirit of following it on the ground.

The informal sector in cities is providing housing to a large number of city dwellers. Not a word has been mentioned in the budget on slums which comprise nearly 40 per cent of the population of some of the larger urban agglomerates. Simply providing land tenure rights and proper facilities would have improved their lives in a better way.


Urban mobility is another area where the budget has laid emphasis. Urban mobility is of utmost importance and has a direct linkage with so many things. It is linked to the working people’s ability to commute; it is linked to their savings; their health; climate change action plans in cities and not to forget rising pollution levels. What was desired was a strong stimulus for enhanced public mobility by linking grants to creating urban mobility infrastructure based on bus rapid transport, pedestrianisation and cycling tracks. However, wedded to the large capital-intensive technological paradigm of urban mobility, the budget once again reiterates its emphasis on metros which is not one of the core desired forms of mobility, especially for the working population.

The only addition is of providing 20,000 buses which is like providing four buses to each of the 5,000 urban townships. It is ridiculous. Besides, even these buses will be run on a PPP basis which shows the clear intent of the union government. The intent is for more private entry into the public transport sector of the cities.


It was desired that the government will increase capital expenditure and will assist the cities in some of their pressing demands. Take for example improvement in urban health infrastructure. The emphasis over the years in urban planning, and particularly since Modi took over in 2014, is for a complete change in urban health design. Instead of primary and community health centres, urban planning is designed for constructing more super speciality hospitals. The PHCs and CHCs are lacking in some of the basic infrastructures- for an x-ray machine, for laboratories etc. The budget announced support for over 11,024 urban health centres but the actual outlay is less than last year. Under the centrally sponsored schemes under health, the budget proposes to reduce the budgetary allocation from Rs 50,591.14 to Rs 47,634.07 crore. This amply shows the priority of the government in the health sector.


Another major area that has usurped one of the highest numbers of advertisements and propaganda from the prime minister’s office, apart from the vaccine is Swachh Bharat Mission(SBM). Now with the launching of SBM 2.0, it was felt that the failure of the previous SBM would be rectified and more stress would be laid out to help cities in handling their solid and liquid waste. The emphasis instead of decentralised waste management has been for more capital-intensive technology-driven waste management and a good amount of subsidy was ushered for such units mostly run by private individuals. There is hardly any success story in the country of such a waste to energy plant. The budgetary allocation for SBM remains the same as the current year Rs 2300 crore, with not a single paisa increase.  The cities are becoming minarets of heaps of untreated waste and the urban agglomerates are the worse. In a recent supreme court comment on Delhi waste, it said that one of the waste dumping sites would soon cross the height of the Qutub Minar in Delhi. These are the new aesthetics that neoliberal urbanisation is providing to the residents.


The government, it seems forgot about one of its flagship programmes. These were supposed to be the lighthouses of urban development – “the smart cities”. Not a word on smart cities figured in the budget speech. It is good that they dump this idea of smart cities as they have become centres of exclusive planning and urban development. Even the infrastructure development parallel to JNNURM- AMRUT saw a meagre increase of Rs 200 crore in the budget from Rs 13,900 crore to Rs 14,100 crore. With the inflation rate, this is actually a fall in fiscal terms.


Water to every household in another major propagated scheme of the union government. The Jal Jeevan Mission promises to provide water to every household in the urban areas. The model of its implementation is interesting. The mission intends to gap nearly 2.7 crore households in urban India who do not have water connections in a period of five years. The scheme(urban) was designed and showcased in February 2021 with a total outlay of Rs 2,87,000 crore in a period of five years. The target is to reduce the non-revenue water(NRW) to 20 per cent and the tool for achieving it is a replica of the Telangana model of PPP. There is no problem in reducing NRW, in fact, that should be done by plugging leakages and overhauling the infrastructure, however little is granted for that. The other way is by levying a user fee on the residents which shall be equivalent to the cost of production of water. With a PPP model, the interests of the large tech giants are secured and thrust on the people. Even the budgetary allocation of Rs 60,000 crore for JJM both urban and rural is made under revenue expenditure and not a single penny on capital expenditure.


There is not a single word on climate change in the budget speech. The cities are facing the worst forms of impacts of climate change. In the recent past, these have aggravated unprecedently. Floods, heat island effects, people dying because of heatwaves are now common features in urban India.

Forget about mitigation strategies even the desired goals of mapping vulnerability in cities are not a priority of our government. Most of the towns do not even have a climate atlas or even a vulnerability study to assess the challenges that the cities face. It was desired that some allocation from the union budget be made to take on this task. However, the budget is silent on it.  

The priorities of this government can clearly be seen through the prism of this budget which is for continuing the previous models of urbanisation i.e., instead of providing relief to the people, allowing the cities to become centres of massive accumulation of capital through the appropriation of basic urban services.