Blueprint of a Prosperous India

8/10/2019 Blueprint of a Prosperous India

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Blueprint of a prosperous India

India as a nation is marching ahead on the road firstly to poverty alleviation and

subsequently to prosperity and global economic superpower. No doubt the path is riddled

with obstacles at each and every step but the final goal can be certainly achieved through

relentless, coherent and sincere efforts by the rulers of the country. This requires balanced

good politics, uncompromising good governance and good economics powered through good

governance. We do hear once in a while that good economics is good politics also but never

heard from any quarter that good governance is the key to everything and is in fact the

mother of good politics, good economics and subsequent march to prosperity. Total attack on

the problems facing the country which are impediments in the path of journey to prosperity

requires reforms like legislative, administrative, judicial, election pertaining and appear to be

extremely difficult in the light of fractured mandates and compulsions of coalition politicseven if there is will to do so. But still a lot can be achieved within the framework of existing

rules and regulations and by attacking problem areas whole hearted from all angles rather

than finding a patchwork solution which at best will provide some relief in the short run.

India is on the move. Economic reform has already unleashed investment and growth,offering its citizens rich opportunities. Although the Indian economy has been resilient so far,the key issue now is how to sustain this momentum. Turning around its cities and releasingtheir dynamism will be critical to Indias future economic growth.

Unlike many countries that are grappling with aging populations and rising dependencyratios. India has a young and rapidly growing populationa potential demographic dividend.But India needs thriving cities if that dividend is to pay out. New research estimates byMckinsey & Company, estimates that cities could generate 70 percent of net new jobs created

by 2030, produce more than 70 percent of Indian GDP, and drive a new fourfold in per capitaincomes across the nation.

Surging growth and employment in cities will prove a powerful magnet. Indias urban

population grew from the 290 million reported in the 2001 census to an estimated 340 millionin 2008. This urban expansion will happen at a speed quite unlike anything India has seen

before. The speed of urbanisation poses an unprecedented managerial and policy challengeyet India has barely engaged in a national discussion about how to handle this seismic shift inthe makeup of the nation. Indeed, India is still debating whether urbanisation is positive ornegative and whether the future lies in its village or its cities. This is a false dichotomyvillages and cities are interdependent and symbiotic.

In fact, the urban economy will provide 85 percent of total tax revenue, which will financedevelopment nationwide and some 200 million rural Indias who live in proximity of Indiaslargest 70 cities will directly benefit from it. But cities themselves are not just home to the

proseprous, far from it, some 75% ofurban citizens live in the bottom income segments,earning an average if 80 rupees a day. Addressing life in Indiass cities is clearly not an elitist

endeavour but rather a central pillar of inclusive growth.


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The cost of not paying attention to Indias cities is enourmous. Todays policy vacuum risks

worsening urban decay and gridlock, a declining quality of life for citizens and reluctanceamong investors to commit resources to Indias urban centres. We believe that the lack ofserious policies to manage urbanisation could jeopardise even the 7.4 percent growth rate weassume in our base case, risking high unemployment.

Cities are central to Indias Economic future

By 2008, an estimated 340 million people already lived in urban India, representing nearly 30percent of the total polulation. Over the next 20 years, urban India will create 70 percent ofthe new jobs in India and these urban jobs will be twice as productive than the equivalent

jobs in the rural sector.

A study by McKinsey Global Institute projects that the popluation of indias cities will

increase from 340 million in 2008 to 590 million by 2030 40 percent of Indias totalpopulation (Figue 01).

We will witness over the next 20 years an urban transformation the scale and speed of whichhas not happened anywhere in the world except in China (Figure 02).

In a global context, the scale of Indias urbanization will be immense. India will have 68

cities with population of more than 1 million, 13 cities with more than 4 million people, and 6mega cities with populations of 10 million or more, at least two of which (Mumbai and

Delhi) will be amongst the five largest cities in the world by 2030 (figure 03).


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Figure 01


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Figure 02


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Figure 03


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Figure 04

Indias urban operation model should focus on five elements

Many countries like the United Kingdom, China, South Africa have turned their cities around

in as little as ten years. There are five main dimensions that are important, these are funding,

governance, planning, sectoral policies and shape.


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Figure 05

Figure 06


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Figure 07

Funding:Sufficient resources for investment to build services for citizens, preferably anticipatingdemand rather than playing constant catch-up as we see in India, are the bedrock ofsuccessful cities. In countries around the world, governments have devised mechanisms toensure cities have reliable access to funds, internally generated and externally supported. Indeveloped countries governments have created transparent, formulae based mechanism(rather than ad-hoc mechanisms like in India) to fund their cities. India will need to unlockclose to $ 2.3 trillion dollars in new urban infrastructure investments including $ 1.2 trillionin capital expenditure.

Governance:Choices that cities make on leadership and management are a second vital component. Themost successful governance is a developed model that empowers local leaders but holds themaccountable. Within a parliamentary democracy, the United Kingdom created an empowered,directly elected mayor of London who sets policies and executes operations throughcorporatized agencies such as Transport of London. India needs to empower cityadministrations (municipal and metropolitan) and modernise service delivery structures.


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Figure 06

Planning:

Effective and systematic urban planning has been part the fabric of successful cities fordecades. Planning is important to allow cities to make uniform trade off on their use of scareresources such as land. A metropolitan master plan sets out the overall strategy for theeconomy, mass transitm and affordable housing. For example, London plans 20 years inadvance how to control peak morning traffic. Overhaul metropolitan and municipal plans,

planning systems and planning capabilities in needed in the urban Indian cities.


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Figure 07

Sectoral policies in job creation, public transportation, affordable housing and climate-

change mitigation:Great cities invest efforts in designing policies for the most important sectors that influencethe citys economy and quality of life. For example, affordable housing for low incomegroups is an important consideration in most cities. Great cities also invest a great deal ofattention in facilitating community networks that foster innovation and drive the soul andethos of the city. India should craft policies for key urban sectors, especially affordablehousing for low income groups and environmental sustainability. There are four critical areasthat need to be addressed job creation, affordable housing for low income groups, public

transportation and of late climate-change mitigation.


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Figure 08

Shape:Most countries in the world have had the luxury of urbanizing organically through historyand have ended up with different portfolios and distributions of cities. Urban India today isdistributed in shape with a diverse range of large and small cities spread widely across thenation. India should continue to strive for a distributed model of urbanisation because this

suits its federal structure and helps to ensure that migrations flows are not unbalanced

towards any particular city or cities.


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Figure 09

References

Indias urban awakening: Building inclusive cities, sustaining economic growthMckinsey

and Company

http://veekay-indiandreamsvsreality.blogspot.in/2012/11/blue-print-to-prosperous-india.html

http://www.li.com/docs/default-document-library/prosperity-in-depth-back-to-the-future-

india-s-tarnished-economic-miracle.pdf?sfvrsn=6
http://veekay-indiandreamsvsreality.blogspot.in/2012/11/blue-print-to-prosperous-india.htmlhttp://www.li.com/docs/default-document-library/prosperity-in-depth-back-to-the-future-india-s-tarnished-economic-miracle.pdf?sfvrsn=6http://www.li.com/docs/default-document-library/prosperity-in-depth-back-to-the-future-india-s-tarnished-economic-miracle.pdf?sfvrsn=6http://www.li.com/docs/default-document-library/prosperity-in-depth-back-to-the-future-india-s-tarnished-economic-miracle.pdf?sfvrsn=6http://www.li.com/docs/default-document-library/prosperity-in-depth-back-to-the-future-india-s-tarnished-economic-miracle.pdf?sfvrsn=6http://veekay-indiandreamsvsreality.blogspot.in/2012/11/blue-print-to-prosperous-india.html

Blueprint of a Prosperous India

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