{"id":34884,"date":"2022-11-16T10:14:51","date_gmt":"2022-11-16T04:44:51","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=34884"},"modified":"2025-04-20T18:10:47","modified_gmt":"2025-04-20T12:40:47","slug":"india-has-to-invest-55-billion-pa-in-urban-infra-to-meet-needs-of-growing-population-world-bank-repo","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/india-has-to-invest-55-billion-pa-in-urban-infra-to-meet-needs-of-growing-population-world-bank-repo\/","title":{"rendered":"India Has to Invest $55 Billion p.a. In Urban Infra to Meet Needs of Growing Population: World Bank Report"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article:<\/strong><\/h3>\n<ul>\n<li><strong>Highlights of the report<\/strong><\/li>\n<li><strong>Suggestions in the report\u00a0<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why In News?<\/strong><\/h2>\n<ul>\n<li>According to a new World Bank report, India would need to invest $840 billion in urban infrastructure over the next 15 years (an average of $55 billion per year) to adequately address the needs of its rapidly rising urban population.<\/li>\n<li>The report was titled as &#8220;Financing India&#8217;s Infrastructure Needs: Commercial Financing Constraints and Policy Action Prospects\u201d.<\/li>\n<li>It emphasises the urgent need to leverage\u00a0<strong>additional private investments<\/strong>\u00a0to cover rising financial gaps.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Highlights of the report:<\/strong><\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/vajiramandravi.s3.us-east-1.amazonaws.com\/media\/editor_images\/2022\/11\/16\/12\/47\/11\/63748e77442c4a05abdd2b59_OI.PNG\" alt=\"\" \/><\/p>\n<ul>\n<li><strong>Urban population:<\/strong>\n<ul>\n<li>By 2036, 600 million people or 40% of the population, would be living in urban areas.<\/li>\n<li>This is projected to place\u00a0<strong>extra strain on India&#8217;s already overburdened urban infrastructure<\/strong>\u00a0and services, with increased demand for clean drinking water, reliable power supply, efficient and safe road transportation, etc.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financing of urban projects:<\/strong>\n<ul>\n<li>Currently, the central and state governments fund more than 75% of city infrastructure, with ULBs funding the 15% with their own surplus revenues.<\/li>\n<li>Only 5% of Indian cities&#8217; infrastructure needs are currently being funded through private sources.<\/li>\n<li><u>A weak regulatory environment and weak revenue collection<\/u>\u00a0add to the challenge of cities accessing more private financing<strong>.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Low revenue:<\/strong>\n<ul>\n<li>Between 2011 and 2018, urban property tax stood at 0.15% of GDP compared to an average of 0.3-0.6% of GDP for low- and middle-income countries.<\/li>\n<li><u>The policy decisions to keep the service charges below those required for cost recovery and financial sustainability contribute to low revenue<\/u><strong>.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Public Private Partnership (PPP):<\/strong>\n<ul>\n<li>PPP transactions for urban infrastructure in India have seen a significant fall (both in monetary value and transaction volume) over the last decade.<\/li>\n<li>For example<strong>,<\/strong>\u00a0124 PPP projects awarded in the urban sector since 2000 worth $5.5 billion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Slow implementation performance:<\/strong>\n<ul>\n<li>States and Urban Local Bodies (ULBs) are implementing several of the flagship missions, such as Smart Cities (SCM) and the Pradhan Mantri Awas Yojana (PMAY), slowly.<\/li>\n<li>g., ULBs across India have so far executed only about one-fifth of the outlay of approved projects under SCM and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) over the last six financial years.<\/li>\n<li>This is mainly due to\u00a0<u>constraints on implementation capacity at the city level<\/u>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Suggestions given in the report:<\/strong><\/h2>\n<ul>\n<li>Cities in India need large amounts of financing to promote\u00a0<u>green, smart, inclusive and sustainable urbanisation<\/u>.<\/li>\n<li>Creating a conducive environment for ULBs to\u00a0<u>borrow more from<\/u>\u00a0<u>private sources<\/u>\u00a0will thus be crucial.<\/li>\n<li>The Government of India can play an important role in removing market frictions that cities face in accessing private financing.\n<ul>\n<li>Over the medium term, a series of structural reforms including those in the taxation policy and fiscal transfer system can allow cities to leverage more private financing.<\/li>\n<li>In the short term, identifying a set of large high-potential cities that have the ability to raise higher volumes of private financing.<\/li>\n<\/ul>\n<\/li>\n<li>Expanding the capacity of city authorities will be crucial to implement the above suggestions for large-scale infrastructure projects.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>PPP transactions for urban infrastructure in India have seen a significant fall over the last decade.<\/p>\n","protected":false},"author":5,"featured_media":34885,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-34884","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=34884"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34884\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/34885"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=34884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=34884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=34884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}