The budget may take the steam out of the flagship urban development schemes like Smart Cities Mission, Amrut and Hriday, as the government has slashed the allocation for these programme and has shifting the focus to rural India.
As per the Budget document, funds for Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities have been slashed to Rs 9,000 crore for the next fiscal year, from Rs 9,559 crore (RE) in the current fiscal year.
The Ministry of Urban Development got an allocation of Rs. 34,212 crore, marginally up from the last fiscal.
This is almost half of what the ministry had sought to fund its various projects such as developing 100 smart cities, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) being undertaken in 500 cities.
The Fourteenth Finance Commission (FFC) has recommended a grant of around $ 87,000 crore to the municipalities for the period 2015-20, constituting assistance of around $500 per capita per annum on average.
Under the Smart Cities Mission, the centre has committed to provide Rs 200 crore per city in the first year followed by Rs 100 crore each for next three years. So far the government has enlisted 60 cities under the scheme and the ministry is planning to enlist 40 more cities for the smart city programme in 2017-18 fiscal. In this condition, the probable allocation for the project might prove to be too little, and can adversely affect these projects as the private participation is not happening as expected in these sectors.
The budget has proposed average Rs.21 crore for the urban local bodies, which is far below the recommendation of the 14th Finance Commission.
The budget has proposed some reformatory initiatives such as modernisation of land records for which the government has allotted Rs.150 crore, which can help the cities with land records and help in efficient tax collection. Focus on digitization will also cities to revamp their digital infrastructure.
The major boost was the focus on affordable housing and providing a much awaited infrastructure status to this key sector. This is very significant, because it will provide the vital budget housing segment with cheaper sources of finance including.
The government has proposed amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment.
"Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. The major benefits of this game changing initiative will be provision of more efficient public transport facilities, greater public convenience, new investment in this moribund sector," Jaitley said.
For metro project the government has proposed Rs.18,000 crore, which is not sufficient to cover the expansion work in mega cities like Delhi, Mumbai and Chennai and greenfield project in seven cities.
The Economic Survey has devoted a complete chapter on the requirement of spending on Urban Infrastructure.
"Every Indian city faces serious challenges related to water and power supply, waste management, public transport, education, healthcare, safety, and pollution. As per the ranking of global cities based on urban infrastructure, New Delhi and Mumbai are placed at 47th and 50th positions, respectively, showing comparatively lower levels of infrastructure in these cities," the survey had pointed out.
