The budget’s urban blind spot

In the background of a raging pandemic, the hope from the Budget 2021-22 was that the urban centres, which saw the worst kind of forced-reverse migration in recent times, would find some redress. The budget speech began with the recognition of the crisis of the pandemic but the finance minister, whilst recognising the role played by essential workers, offered very little to them. The budget aims to “strategically disinvest”, promote “infrastructure development” and address the electoral challenges in the upcoming state elections. The pandemic and the resultant economic crisis for marginal and worker groups — many of whom are in the urban areas — get a rare mention at best.

Urban development and schemes have always played a significant role in the NDA I and II government’s budgets until now. But the few positive measures taken during the pandemic have been put on the back burner. The perfect case being the PM-SVANidhi Scheme, which was received well by street vendors, but has not been continued. The total budgetary outlay for urban development is Rs 54,581 crore, just 9 per cent points above the budgetary estimates of 2020-21. This is just 1.5 per cent of the total budget, even though 34 per cent of Indians live in urban centres and cities contribute to nearly 67 per cent of the GDP and 90 per cent of total government revenues. In all, the proposed amount for the urban centres falls short of the budgets of the four metros in the country. (It is also to be noted that the revised estimates for the previous financial year had fallen to Rs 46,791 crore.)

Even in this budget, there is a shortfall in the total grants outlay to the urban local bodies. There is a reduction from Rs 25,098 crore to Rs 22,114 crore, which is a fall of nearly 11 per cent. This means that the urban bodies will be forced to mop up resources through either user fees on various utilities, or by taxing people more. The Centre has missed the chance to strengthen the state’s role in providing urban services and amenities, which the pandemic revealed was required. Instead, it has relied more on private investment in cities to ameliorate the problems.

The budget can be analysed under three categories of urban schemes. First, the ones being pushed through aggressively, like the thrust on infrastructure augmentation in urban centres. Under the guise of “raising the share of public transport in urban areas” the budget pushes through unsustainable debt-ridden expansion of metro rail network. The city bus service systems, wherever operating, will be converted into “innovative PPP models” to enable private sector players to enter bus services in the cities. This will further dismantle the existing largely public bus transport in favour of metro rail. This is further augmented by giving the car industry a “voluntary vehicle scrapping policy” and not pushing through a strong policy for electric vehicles and non-motorised transport. The increase in vehicles and the consequent rise in air pollution is expected. But the outlay promises only a Rs 2,217 crore programme for air pollution — a mere palliative for cities that are some of the most polluted centres in the world.

Urban development was, therefore, merely reduced to infrastructure enhancement and the imminent climate crisis facing our cities find no mention nor allocation.

The second set of policies are the ones that are continued, but without any infusion of funds. There are hardly any new or increased allocations in key sectors as housing, sanitation and services. The PMAY scheme has been extended by one more year. Similar continued allocations are visible for AMRUT and Swachch Bharat. Though there are continued allocations, there was no mention of the much-showcased smart cities initiative. The budget speech is silent on it as it has become one of the biggest embarrassments due to lack of implementation and policy failure.

The third set of measures are the ones where there is a grievous absence of any substantial allocations, only rhetoric and promises are made in the budget. The best examples are of migrant housing. Instead of government providing immediate thrust on housing and labour hostels, they will be given tax concessions, and there are no separate allocations that ensure the delivery of housing options to migrant workers whose suffering during the pandemic will remain in our collective memory. There is also a section on labour welfare in the budget, but it fails to delineate any measures and resources to the lost livelihoods, reduced wages, and income insecurity that the workers face currently. The budget does mention of universal social security and online portals to access information on workers but gives little cash to the resource-starved informal sector that runs the urban centres.

An urban employment guarantee scheme was the most urgent requirement. In fact, since the 2009 election campaign, the BJP had promised such an employment guarantee scheme. Himachal Pradesh has adopted this measure alongside many other states, but the budget ignores this much-needed livelihood support measure.

Though the budget points out that over 9,000 urban centres, comprising Tier-1,2 and 3 cities, small towns, and other non-statutory urban settlements, hold nearly 34 per cent of the Indian population, but they have been left unsupported. Innovative attempts from other COVID-19 impacted countries (and even some Indian states like Kerala, and Odisha) which have heavily invested in labour security, green infrastructure and sustainable development show the path that the budget could have taken.

A few positive components sustain the hope for a renewed focus on the urban centres. Even though not remarkable at the macro-policy level, they focus more on delivery and implementation mechanisms — for example, the Jal Jeevan Mission (Urban), and the much-needed Urban Swachh Bharat Mission 2.0.

Nevertheless, the absence of drastic policy measures that take on unemployment and environmental challenges will continue to make urban centres more unequal and unsustainable.

Panwar is former deputy mayor of Shimla and Unni is an urban researcher

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