Context:
Urban development is imperative as cities account for 67% of India’s GDP. Still, while the “Viksit Bharat” vision is espoused, urban issues remain relegated to the backburner in the Budget.
Overall Allocation
- Total urban development outlay
- ₹96,777 crore ↑ from ₹82,576.57 crore in the previous Budget.
- Adjusted for inflation, real spending has decreased.
- Revised Estimate (RE)
- ₹63,669.93 crore, showing 22.9% underutilization.
- PMAY (Urban) saw a drastic cut:
- Allocated: ₹30,170.61 crore
- Revised to: ₹13,670 crore
Urban Local Bodies (ULBs) and Revenue Shortfall
- ULBs face reduced direct transfers: ₹26,653 crore (last year) → ₹26,158 crore.
- GST implementation led to a 21% drop in ULB revenue.
- Lack of central support may lead cities to impose higher local taxes.
Centrally Sponsored Schemes (CSS) Cuts
- PMAY (CSS component) down 30% from last year.
- Swachh Bharat Mission (Urban) allocation unchanged at ₹5,000 crore, but only ₹2,159 crore expected to be spent.
- AMRUT & Smart Cities Mission experience flat allocations.
New Urban Challenge Fund & Private Sector Involvement
- ₹10,000 crore Urban Challenge Fund launched
- ₹1 lakh crore to be spent on urban redevelopment; 50% to come from private investment
- Smart Cities Mission has witnessed minimal private sector participation. Hence, the target is over optimistic.
Conclusion
- The Budget is more capital intensive in infrastructure rather than sustainable urban policies.
- Less focus on employment, green jobs, and social equity could widen urban disparities.
- Without increased local funding, cities may struggle to provide essential services.
