The Story So Far
In 2015, the NDA government identified urban development as a key growth strategy, recognizing that cities contribute nearly 67% to GDP.
However, cities are noticeably absent in the vision for a “Viksit Bharat”.
What Was Allocation for Urban India?
Total allocation for urban development: ₹96,777 crore (higher than last year's ₹82,576.57 crore).
Actual expenditure is expected to be ₹63,669.93 crore, showing a 22.9% underutilization.
The Pradhan Mantri Awas Yojana (Urban)-PMAY saw a drastic reduction from ₹30,170.61 crore to ₹13,670 crore in the Revised Estimate, highlighting a gap between policy goals and implementation.
Despite the increase in total outlay, the focus remains on capital-intensive projects instead of addressing urban infrastructure gaps.
How Has Reduction Happened?
Direct transfers to Urban Local Bodies (ULBs) have decreased.
Post-GST, ULB revenues fell by over 21%, and central devolution didn’t compensate for the loss.
Transfers to ULBs reduced from ₹26,653 crore to ₹26,158 crore.
Centrally Sponsored Schemes (CSS): Allocations for major urban schemes, like PMAY, Swachh Bharat Mission, and AMRUT, have been cut.
PMAY's allocation saw a 30% reduction, and SBM spent only 44% of its budgeted amount.
Central Sector Schemes:
Focused on capital-intensive metro rail projects, with significant increases in funding (₹24,691.47 crore in FY 2024-25, up from ₹21,335.98 crore).
The prioritization of metro projects raises concerns about the inclusivity of urban mobility.
What Next?
A new Urban Challenge Fund of ₹10,000 crore has been introduced, with an ambitious ₹1 lakh crore target for urban redevelopment, but half the funds are expected from private investments.
The budget highlights the focus on capital-intensive projects, with less emphasis on employment generation, sustainable development, and economic equity, potentially increasing urban disparities.
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