Why the Centre must fund the rescue of India’s collapsing cities

As India’s urban centres groan under the weight of crumbling roads, overburdened public transport, erratic waste disposal and inadequate water and sanitation systems, the Centre must step up in its role as the primary investor in urban infrastructure.

But recent trends in the Union Budget show a retrenchment in capital expenditure, despite clear signs that the Centre’s financial capacity has improved.

Without investment, India’s urban poor will suffer the most: from expensive housing, poor connectivity, inaccessible basics and waterlogging. Given the central role of Indian cities in economic productivity and human development, the future cannot be managed with patched roads and broken drains.

Capital expenditure cuts

State governments and civic authorities finance much of the urban infrastructure in cities via municipal budgets, user charges and local taxes, with the Centre investing through large-scale capital outlays and focused programs.

For instance, in Delhi, the Centre in July approved Rs 821.26 crore as a special finance assistance package for 33 projects such as metro corridors, roads, housing, and water facilities. Of this, Rs 105.26 crore was for the Delhi Metro Phase-IV corridors. The remaining is from state government budgets and local governments.

The Centre’s capital expenditure on infrastructure increased by 2.2 times between the financial years 2021-’22 and 2024-’25, with the budget for 2024-’25 allocating...

Read more