8th Five Year Plan (Vol-2)
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Agricultural and Allied Activities || Rural Development and Poverty Alleviation || Irrigation, Command Area Development and Flood Control || Environment and Forests || Industry and Minerals || Village and Small Industries and Food Processing Industries || Labour and Labour Welfare || Energy || Transport || Communication, Information and Broadcasting || Education, Culture and Sports || Health and Family Welfare || Urban Development || Housing, Water Supply and Sanitation || Social Welfare || Welfare and Development of Scheduled Castes and Scheduled Tribes || Special Area Development Programmes || Science and Technology || Plan Implementation and Evaluation



13.1.1 Urbanisation is a natural consequence of economic changes that take place as a country develops. At the same time, urbanisation helps to contribute to the growth process at large. This is manifest in the increasing contribution of urban sector to national income. For instance, in 1950-51 the contribution of urban sector to India's GDP was estimated at only 29 per cent, which increased to 47 per cent in 1980-81 and is likely to rise to 60 per cent by the turn of the century.

13.1.2 The positive role of urbanisation is often over-shadowed by the evident deterioration in the physical environment and quality of life in the urban areas caused by widening gap between demand and supply of essential services and infrastructure. This results from increasing population, pressure on urban centres, most of which are financially and ort.TanLsatioi•!:.iliy ill-equipped to respond to intrastructural needs. Public investment in urban infrastructure has also been less than adequate. The challenge of reorienting the urbanisation process, thus, lies in overcoming the infrastructural deficiencies and taking the best advantage of economic momentum inherent in urbanisation.

Urban Scene

13.2.1 The urban population of India according to the Population Census 1991 was 217.18 million spread over 3768 urban agglomerations/towns. The urban population has been growing at a much higher rate than the total and the rural population and as a result, its proportion in the total population has increased from around 11 percent in 1901 to about 26 percent in 1991. Also, the rate of growth of population has steadily risen from decade to decade except during 1981-91 when it was lower than the earlier decade.

13.2.2 There are wide variations amongst regions/States in the level of urbanisation (Table-2). The Union Territories of Delhi (92.73%) and Chandigarh (93.63%) are the most urbanised in the country and the urban proportion is the lowest (8.47%) in Dadra and Nagar Haveli. Among the major States, Maharashtra is the most urbanised with 38.73 per cent of its population living in urban areas, followed by Gujarat (34.40%) and Tamil Nadu (34.20%).

13.2.3 Inter-state variation in the annual rate of growth of urban population and urban-rural growth differential (URGD) is more revealing. Except in Kerala, Gujarat and Maharashtra, the URGD is lower in all other States during 1981-91 than in 1971-81 (Table-2). Conspicuous deceleration of urban growth during 1981-91 was noticed in Bihar, Orissa, Karnataka and Uttar Pradesh.

13.2.4 The urban areas in the country, excluding Assam, Jammu and Kashmir, consist of 300 Class 1 urban agglomerations/cities, 345 Class II urban agglomerations/towns, 947 Class II! urban agglomerations/towns, 1,167 Class IV urban agglomerations /towns, 740 Class V urban agglomerations/towns and 197 Class VI urban agglomerations/towns, making in all 3,696 urban agglomerations/towns (Table-3). The distribution of urban units among States and Union Territories is quite uneven. A comparison of decadal growth rate of urban population by size classes suggests significantly higher growth rate (46.9%) in class I towns compared to negative growth rate in class V and VI towns. However, if adjustment is made for re-classitication of towns in different size classes in 1981 and 1991 censuses the difference in the decadal growth rate among the different size classes of towns is less marked.

13.2.5 The Class I urban agglomerations/cities accounted for 65.20 percent of the urban population of the country in 1991. A further breakup of the population of cities indicates that a majority (50.5%) of the population of Class 1 urban agglomerations/cities lives in 23 metropolitan urban agglomerations/cities with a population of more than a million each. These cities account for roughly one-third of country's urban popu*-lation. Furthermore, in India there are fouT mega cities namely Bombay, Calcutta, Delhi and Madras, with a population of more than five million each in 1991. Almost one-fourth of the population living in Class I urban agglomeration/cities in the country lives in mega cities.

Table-1 Growth of population in India : 1901-1991

CensusYear PopuIation(Miilion) Percent Variation No. of Towns % contribution of urban population
  Total Urban Rural Urban   Class I Towns Class 11 and III
1 2 3 4 5 6 7 8
1901 238.40 25.85 (10.84) - - 1916 26.0 26.9
19ll 252.09 25.94 (10.29) 6.40 0.33 1908 27.5 27.9
1921 251.32 28.09 (11.17) -1.29 8.27 2048 29.7 26.4
1931 278.98 33.46 (li.99) 9.98 19.12 2220 31.2 28.5
1941 318.66 44.15 (13.85) 11.81 31.97 2427 38.2 27.8
1951 361.09 62.44 (17.29) 8.79 41.43 3060 44.6 25.8
1961 439.24 78.94 (17.97) 20.49 26.41 2700 51.4 28.2
1971 548.16 109.11 (19.90) 21.86 38.23 3126 57.2 26.9
1981 683.33 159.46 (23.34) 19.68 46.39 4029* 60.4 26.0
1991** 844.32 217.18 (25.72) 19.71 36.19 4689 65.2 24.2

* Includes 80 provisional towns of Assam. ** Provisional Population Census of India 1991, Paper-2.
Source: Census of India 1981 and Provisional Population census of India 1991.
Note: (1) Figures in brackets are percentages.
(2) Decrease in the total number of towns in 1961 compared to 1951 was due to the application ofuniform and rigid definition of urban areas adopted for the 1961 Census.

13.2.6 The population in Class I urban agglomerations/cities has continued to increase at a faster rate (46.87 per cent) during 1981-91 than other towns. Considering the common set of towns, the decadal growth rate is 34.5%.

13.2.7 Growth of employment (main workers in urban India during 1981-91 is recorded ai 38.0% as against 26.1% in the country as whole. The population growth in urban areas (36.2%) is close to that of employment growth, As the growth rate of labour force during the same period is expected to be higher than that o1 total population growth in urban areas, urfem-ployment/ underemployment rate might have gone up. With regard to the composition of main workers for which only four broad categories (cultivator, agricultural labour, household industry and other workers) are available, there is no perceptible change between 1981 and 1991 as can be seen from Table 4. However, percentage employed in Household industry has increased to 5.6% from 4.9% in 1981.

Table-2 Level of Urbanisation, Average Annual Exponential Growth, URGD, Rank in Major States of India.

State Urb Level Of anisation El Average Annual (ponential Growth (urban) Urban Rural Growth Differential Rank
  1991 % 1971-81 1981-91 1971-81 1981-91 1981 1991
India 25.72 3.83 3.09 2.05 1.29 - -
Andhra Pradesh 26.84 3.96 3.55 2.39 1.88 7 7
Assam 11.08 3.27 3.27 1.27(est) 1.29 16 16
Bihar 13.17 4.37 2.65 2.49 0.62 14 15
Gujarat 34.40 3.47 2.90 1.46 1.51 3 2
Haryana 24.79 4.67 3.58 2.67 1.73 8 9
Himachal Pradesh 8.70 2.98 3.11 0.92' 1.46 17 17
Jammu and Kashmir 23.83 N.A. N.A. N.A. N.A. 9 10(est)
Kamataka 30.91 4.10 2.55 2.35 0.97 4 4
Kerala 26.44 3.19 4.76 1.73 4.44 12 8
Madhya Pradesh 23.21 4.45 3.71 2.69 1.71 11 11
Maharashtra 38.73 3.36 3.27 1.74 2.92 1 1
Orissa 13.43 5.22 3.08 3.76 1.49 15 14
Punjab 29.72 3.68 2.56 2.07 1.00 5 5
Rajasthan 22.88 4.62 3.31 2.19 1.07 10 12
Tamilnadu 34.20 2.47 1.76 1.25 0.56 2 3
Uttar Pradesh 19.89 4.74 3.29 2.94 1.27 13 13
West Bengal 27.39 2.76 2.54 0.91 0.47 6 6

Plan Performance Review

Thrust of Urban Development Policy

13.3.1 The Seventh Plan asserted that planning of urban development should essentially be supportive of the economic development in the country. It urged making use of industrial location policy to subserve regional and urban planning and suggested that a concerted effort should be made to channelise private industrial investment in the vicinity of small and medium towns to check migration of population to the metropolises. The identification of regional urban systems was suggested on the basis of regional characteristics and needs and functions of each town in its regional context. More explicitly, the needs of the poor were to be taken into account in all physical planning exercises. The following were identified as the major constituents of a comprehensive plan for urban development:

    (i) Planned and integrated development of small and medium towns and cities along with slowing down of growth of the big metropolises; (ii) Revitalisation of civic bodies; *

Table-3 Increase/Decrease of Population in each size Class during 1981-91 - INDIA*

Population increase/decrease during 1981-91 Contribution to India's total urban population
Size Class No.of UA/Towns in l991 Decadal growth b
Absolute Percent a 1981 1991
1 2 3 4 5 6 7
All Classes 3696 56,447,569 36.09 32.81 100.00 100.00
I 300 44,298,200 46.87 34.49 60.42 65.20
II 345 5,119,439 28.14 31.60 11.63 10.95
III 947 5,670,186 25.30 29.57 14.33 13.19
IV 1167 1,600,797 10.72 28.41 9.54 7.77
V 740 -70,982 -1.27 30.02 3.58 2.60
VI 197 -170,071 -21.70 NA 0.50 0.29

'•' Excludes Assam and Jammu and Kashmir
a For all towns as recorded in 1991 census
b For those towns which are common both in 1981 and 1991 census

Table - 4 Percent Distribution of Main Workers by broad categories in
All India - Urban (excluding J and K, Assam)

Year Total Main Workers Worker Participation Rate of population) Cultivator Agricultural Labour HH Industry Others
  (in million) (%) (%) (%) (%) (%)
1981 45.72 29.23 5.13 6.05 4.94 83.88
1991 63.08 29.63 4.99 6.66 5.57 82.78

(iii) Thorough reforms of municipal tax systems and municipal administration in general;

(iv) Concentration on the improvement of slums and the provision of basic municipal services;

(v) Working out measures for regular devolution of funds from State Governments and

(vi) Establishment of the necessary institutional framework for channeling capital funds for the improvement of urban infrastructure.

Programmes in the Seventh Plan

13.3.2 The Plan emphasised the following major programmes :-

(a) Environmental Improvement of Urban Slums (EIUS) Scheme has been in operation in the State sector since 1974. The scheme bone-fitted about 10 million slum dwellers during the Seventh Plan and another 3.3 million during two Annual Plans (1990-91 and 1991-92).

(b) A Centrally Sponsored Scheme known as Urban Basic Services was introduced in 1986, with the primary objective of enhancing the survival and development of women and children of urban low income families. During 1990-91, the scheme was revised to bring about functional integration with EIUS and came to be known as Urban Basic Services for the Poor (UBSP) with 100% Central funding.

(c) Scheme for Integrated Development of Small and Medium Towns (IDSMT) to provide complementary infrastructural support of critical significance was continued. During the Seventh Plan period 145 additional towns were covered.

(d) Development of National Capital Region around Delhi was aimed at providing infra-structural support to priority towns and the region as a whole.

(e) In the State sector, provisions were made for infrastructure facilities, civic amenities, and development of State capital projects.

(f) The Nehru Rojgar Yojana was launched in October, 1989. It is targeted Towards persons living K'Sow die poverty line in urban areas. It has three components viz. Micro-enterprises, Wage employment and Shelter Upgradafion.

13.3.3 A significant source of funding in the urban development sector during Seventh Plan and the Annual Plans 1990- 91, 1991-92 was external assistance. Total utilisation of external aid in 1990-91 alone was approximately Rs.280 crores.

An overview of Plan Outlay

13.3.4 Tables 5 and 6 indicate the approved outlays for Urban Development during the Seventh Plan and the Annual Plans, 1990-91 and 1991-92 for States and the Central Sector. Major features of the Plan outlay are summarised be-low:-

a) In financial terms the Annual Plans 1990-91 and 1991-92 showed a marked increase over the average expenditure per annum during the Seventh Plan, primarily due to introduction of NRY in 1989. However, the Annual Plan outlay in the central sector showed a decline in 1991-92.

b) EIUS continued to be the must significant programme in the urban sector with Seventh Plan outlay of Rs. 269.5 crores and Annual Plan outlay of Rs. 65.3 crores and Rs. 63.4 crores in 1990-91 and 1991-92 respectively.

Emerging Issues

13.3.5 The review of urban policy framework in historical perspective indicates that until the Sixth Plan (1980-85), the urban policies mainly addressed problems like housing, slum clearance, slum improvement and upgradation, preparation of Master Plans, development of small and medium towns, strengthening of municipal civic administration etc. The Sevefith Plan made a new beginning by explicitly recognising the problems of urban poor which were seen to be linked with creation of employment opportunities. It is now being recognised that urban policies can directly contribute to achieve the goals of poverty reduction and removal of unemployment and under- employment. During the last decade, the growth rate of employment in the urban areas averaged around 3.3% per annum, while the employment growth rate in the rural areas dropped to about 1.6 per cent for males.

Table - 5 Approved Outlays - Urban Development State - Sector
(Rs. in Lakhs)


Seventh Plan

1990-91 1991-92
1 Andhra Pradesh 9000 3757 3540
2 Arunachal Pradesh 50 20 30
3 Assam 1200 363 378
4 Bihar 1900 1580 1734
5Goa 665 144 200
6 Gujarat 13105 2295 3196
7 Haryana 2000 272 452
8 Himachal Pradesh 925 435 480
9 Jammu and Kashmir 3907 6791 6820
10 Karnataka 3000 1429 1786
11 Keraia 2500 529 989
12 Madhya Pradesh 7760 2826 3944
13 Maharashtra 16000 3600 7500
14 Manipur 755 540 141
15 Meghalaya 500 260 600
16 Mizoram 550 300 459
17 Nagaland 800 360 283
18 Orissa 650 1650 1710
19 Punjab 4075 4472 6866
20 Rajasthan 2371 815 1358
21 Sikkim 150 90 100
22 Tamil Nadu 16000 4296 4916
23 Tripura 700 327 350
24 Uttar Pradesh 24700 8350 6810
25 West Bengal 23220 8079 9360
Total - (States) 136483 53580 64002
26 A and N Islands 300 123 155
27 Chandigarh 6113 1550 1970.61
28 D and N Haveli 7 2 6.6
29 Daman and Dm - 35.2 15
30 Delhi 19770 10925 11000
31 Lakshadweep 0 25.1 3.5
32 Pondicherry 655 184 224
Total - (UTs) 268451 2844.3 13374.71
Total - (States and UTs; 163328 .6424.3 77376.71

13.3.6 Thus, urban areas have to be enabled to absorb larger increments to the labour force. Further, promotion of non-agricultural activities, Upgradation of skills and infrastructure development of smaller towns will need added impetus.

13.3.7 The most glaring problem has been the high incidence of marginal employment and urban poverty. It is estimated on the basis of NSS 43rd round (1987-88 data) that 41.8 million people are below the poverty line. It is recognised that the incidence of marginal and low income employment is mostly in the informal sector, which accounts for large share of total employment in large cities. What is needed is Upgradation of informal sector occupations and their integration with the urban economy at large.

13.3.8 The gap between demand and supply of infrastructural services has been continuously widening. Increasing pressure of population, particularly concentration of urban population in large cities and metres and escalating per capita cost of providing urban services account for deterioration of infrastructure services and amenities. The worst sufferers are the poor, whose access to the basic services like drinking water, sanitation,education and basic health services is shrinking.

13.3.9 Unabated growth of urban population has made the problems of urban housing more severe. The accumulated backlog in the urban housing along with the housing needs for the additions to the urban population has aggravated the problem further, resulting in proliferation of slums and squatter settlements and decay ot^city environment, i

13.3.10 Fast growth of urban population, spread of urban areas and spurt in secondary and tertiary activities have led to urban transport problems like severe traffic congestions, slowing down of vehicular movement, high air and noise pollution, longer journey hours, increasing costs of travel etc. Urban transport is an important service sector and plays a crucial role in the development of the urban economy and the time has come to take stock of the urban transport scenario.

Table - 6 Approved outlays on urban development: Central Sector
(Rs. in lakhs)

Sl. Name of Scheme
Seventh Plan 1985-90 1990-91 1991-92
1 2 3 4 5
l.I.D.S.M.T. 8800 2500 1500
2.Equity Support to HUDCO (Infrastructure) 3500 200 450
3. Contribution to NCR Planning Board 3500 1000 1400
4.Research and Training in Urban and Regional Planning 200 - 40
5. Development of Displaced Persons Colonies 150 32 10
6. Urban Basic Services 500 2500 2300
7. Urban Transport Consortium Fund - 200 500
8. Nehru Rozgar Yojana * - 12000 11300
9. Scheme for Educated Employment Generation in Urban Localities - - 200
10.Grants to urban local Bodies through HUDCO/UD and UWS Financing Corporation - - 200
11. Removal and Collection of cattle in Calcutta 150 - -
Total 16800 18432 1790

* Nehru Rozgar Yojana was started in 1989-90 and funds released in 1990-91.

13.3.11 In the context of the growing demand for urban services, the rationalisation and the augmentation of revenue system have not made commensurate progress resulting in increasing dependence of urban local bodies (ULB) on the financial assistance from the States and Central Government. Own revenues of the local bodies are not adequate even to meet operation and maintenance expenditure. In the case of smaller LJLB's, the weak financial position is also combined with lack of organisational and technical capabilities.

13.3.12 The weak financial and organisational base ot'ULB's has, in turn, led to highly subsidised and inequitable supply of various urban services with critical dependence on State grants.

13.3.13 Much of the ills of urban housing and resource mobilisation in larger urban areas can be perhaps attributed to the problems inherent in the urban land market. While urban development programmes have to depend largely on a well coordinated land development programme, the existing legal and administrative machinery has impeded supply and development of serviced land. Also, very little efforts have been made to mop up the large appreciation in values of real estate particularly in metropolitan cities.

13.3.14 The role of ULBs has weakened progressively over the last two or three (iecades. In recent years, some of the functions performed earlier by the ULBs have been transferred to State level bodies, including Urban Development Authority and Functional Bodies. This process needs to be reversed so as to foster stronger and more responsive local governments, reflecting local initiatives, perceptions and priorities.

13.3.15 A corollary to the above process is exploration of avenues through which private initiatives can find a greater role in urban development programme. The role of private sector needs to be expanded. The extent and the manner in which private developers can contribute to urban renewal and squatter settlements and peripheral areas in metropolitan regions (including residential and trunk infrastructure development) needs assessment.

13.3.16 Attention needs to be focussed not only on the growing challenges of urbanisation but on the relationship between urban and rural development. The rapid transformation in the country's urban scenario must be taken into account and provided for, in order that urban growth becomes compatible with healthy socio-economic development of the nation. It will be necessary to take note of the prevailing dichotomy in rural and urban development and evolve a mechanism for bringing about rural-urban cohesion in the management of growth. This can be achieved through the process of spatial planning, which is an integrating concept that

makes it possible to achieve the composite development of human settlements while stimulating economic growth. Spatial development plans would need to be prepared keeping in view the "growth centre" concept. This will provide a framework for identification of "nuclei of development " and lower order centres" where investments could be attracted, depending upon their infrastructure level and growth potential.

The Perspective

13.3.17 Population projections made by the Expert Committee, indicate doubling of India's urban population in two decades i.e. 1981-2001. Growth rate of labour force in urban areas is expected to be even higher. However, the 1991 census recorded significantly lower urban population than that projected. Yet, it may not be prudent to be guided by this transitory trend. Population projections, have been made on the basis of a longer term trend of annual growth of urban population with base year population corrected on the basis of 1991 census. Estimates worked out are presented in Table-7. The overall level of urbanisation by the turn of the century is likely to be less than that projected earlier, but absolute addition will still be quite large (148 million during two decades). Moreover, a higher share of population in "million plus" cities imply proportionately higher burden of demand for urban services and also higher per capita cost in real terms.

TABLE-7 Urban population projection -1991-2001

Total Urban Population (in million) % Urban population % share of million plus cities to Urban population
Committee of Experts Now Projected    
(A) (B) (A) (B)
1991 235 217 27.5 25.7 32.5(23)
1997 267 28.3 -
2001 332 307 33.0 30.5 35.8(40

Figures in the bracket indicate Number of million plus cities.

Thrust areas in the Eighth Five Year Plan

13.4.1 In the light of experiences gained during the Seventh Plan and the two Annual Plans and also taking into consideration the emerging issues and perspective as indicated above and as elaborated in the Report of National Commission on Urbanisation (1988), the thrust areas for the Eighth Plan will consist mainly of more effective implementation of the strategies adopted during the Seventh Plan and partly in formulation of new strategies. The overall Seventh Plan strategy of urbanisation being supportive of economic development with appropriate location of industry and other employment generating activities will be continued. The programmes for the urban poor and for the small and medium towns will have the same focus, but the content and manner of implementation of these programmes will be made more comprehensive and compatible with the overall strategy at the State level. Resource mobilisation and programmes aimed at strengthening of institutions will be given a concrete shape. The distinctive features of the Plan are as follow.s:-

  1. Spatial and economic dimension of planning for the urban sector needs to be consolidated and operationalised.
  2. Convergence of all related programmes to create the desired impact in small and medium towns beyond the threshold level is necessary.
  3. The key to success of urban development strategy lies in taking measures-legal, financial and organisational — for enhanced and equitable supply of urban land.
  4. Private and public sectors have to act in tandem for urban infrastructure and housing. Innovations in funding pattern and role of private developers in specific areas need to be explored.
  5. In view of the deteriorating environmental conditions caused by both natural and man-made factors, the conventional city plans should be modified to incorporate the measures needed for restoration of healthy environment.
  6. Programmes to deal with the problem of urban poverty should be developed in integrated manner emphasising both employment generation and access to basic services involving community level organisations.

13.4.2 Specific thrust areas of Eighth Five Year Plan

(a) Macro strategy for urban development with explicit recognition of rural-urban linkages has to be evolved. In particular, the benefits of accelerated pace of agricultural development should be taken advantage of through appropriate utilisation of backward and forward linkages. This, together with appropriate location policy for development of industry and other major employment generating non-agricultural activities, can provide an effective avenue for absorption of surplus rural labour force.

(b) As a corollary to the above macro level strategy, an integrated plan of hierarchy of rural and urban settlements needs to be evolved. This will imply introducing ex-plicity spatial dimension.

(c) Particular emphasis will be placed on the development of small and medium (S and M) towns which serve as an important link between the village and the large cities. In order to realise the objective of more balanced distribution of urban growth both in terms of its distribution over space and also by size class of urban areas, the small and medium towns have to act as important centres of attraction, in terms of economic opportunities, to the potential migrants not only from villages but also from urban areas to large cities. To operationalise this planning approach, the integration of this strategy for development of small and medium towns in a spatial context with the existing district planning process may be attempted. The concept of GEMS as identified by the National Commission on Urbanisation will be kept in view for this purpose.

(d) The programme implementation approach has accordingly to undergo a change from the present practice of implementing urban development programme in an ad-hoc and isolated manner. Not only the physical infrastructure but also the economic infrastructure should form part of urban development programme.The policy of locating industries in rural areas only at a short distance away from the metropolitan or large cities is only symbolic of dispersal policy. Instead, it will be worthwhile to promote industries in small and medium urban centres having the desired impact on decentralisation of urban growth. It would also be necessary to plan for more efficient land use and economic regeneration of old city areas in the metro region keeping in view the new Industrial Location Policy which aims at more flexible approach to location of industries in the metro region. Similarly, the programmes of the Ministries of Agriculture, Rural Development and Telecommunication need to be oriented to small towns which primarily serve as Rural Service Centres.

(e) In order to achieve better co-ordination of various related programmes within the Ministry of Urban Development, the programme of IDSMT, housing and infra-structural development programmes of HUDCO, and also employment generation scheme under NRY can be suitably integrated. Identification of towns and cities should be made on a selective and priority basis and the investment plan properly coordinated and placed above the threshold level to have the desired impact. Prioriti-zation should be done in the first instance, with regard to primary economic functions (eg. rural growth centres, service towns, tourist towns, industrial towns, etc.) and later integrated with service level deficiency in the urban areas.

(f) Increasing reliance on institutional finance which needs to be dovetailed to an overall plan of infrastructure support in the urban areas is necessary.

(g) With regard to the problem of urban poverty and unemployment, the NRY can be made more effective by identification of potential and more appropriate activities, and by suitable organisation at the district/local level and people's participation.

(h) With regard to the access of the urban poor to basic services like water supply, sanitation, health and education, a combined package of UBSP and EIUS may provide effective means of overcoming the problems.

(i) Resource mobilisation measures of the metropolitan Governments, including rationalisation of existing tax and non-tax resources, and the need for devolution of funds from the State to the Local Governent need an urgent plan of action .

(j) Legal bottlenecks (for example, Urban Land Ceiling and Regulation, Transfer of Property, Land Acquisition and Rent Control Acts) need to be removed. This aspect has been examined in detail by the National Commission on Urbanisation and also incorporated in the draft National Housing Policy. A time bound action to effect necessary amendments to these Acts is now called for. Rationalisation of regulatory framework is also necessary as a complementary measure.

(k) A decentralised framework of urban Government with necessary participation of local communities and opinion leaders in planning, implementation and monitoring of urban development programmes is another prerequisite for the success of urban development strategy. In addition to the enactment of the Nagar Palika Bill, which is a necessary but not a sufficient condition for efficient urban development, other normal management improvement schemes, including national and local level training programmes and delegation of administrative functions and responsibilities, will help the process. In case of large city government, shift from one centralised authority to a system of smaller area-based committees may be more effective in delivery of urban services.

(l) In view of the large size and the complexity ' of urban development programmes, institutional support and delivery systems at town and area level (for large cities) need to be developed in the immediate future.

(m) It is necessary to examine the feasibility of developing appropriate specialised organisations at the Centre and State level to deal with financing and development of urban infrastructure.

Eighth Plan Programmes

13.5.1 Given the above thrust areas of the Eighth Plan, the Plan programmes, covering both the State and the Central sectors have been worked out in detail. While most of the programmes are extension of those of the Seventh Plan and 1990-91/91-92 Annual plans, the content, physical coverage and funding pattern have been revised in most cases in accordance with the thrust areas of Eighth Plan. The major/priority programmes are discussed in detail in the subsequent sections:

Integrated Development of Small and Medium Towns

13.5.2 The Integrated Development of Small and Medium Towns (IDSMT) scheme was initiated by the government in 1979-80 with a view to reducing the migration of population from rural areas to large cities, generating employment by creating resource generating ventures in the small and medium towns and providing su^'icient infrastructure facilities in these towns. The scheme provided for Central assistance on matching (50:50) basis with a ceiling of Rs.40.00 lakhs, which assumed the form of a loan repayable in 25 years. Until March 31, 1991, a total of 457 towns had been covered under the scheme for which the loan assistance released was Rs. 162.73 crores.

13.5.3 The scheme has broadly served its objective but it has not had the desired impact on the hinterland. Delays in land acquisition and4ffvel-opment and inadequate counterpart funding by the States/UTs have been identified as toajor bottlenecks in the scheme.

13.5.4 Therefore, the Eighth Five Year Plan envisages a fresh approach to the development of the towns, dovetailing the activities under the employment generation programmes into the supportive infrastructure development programme with a view to:-

  1. generating employment opportunities to reduce the rural-urban and urban-urban migration;
  2. developing growth centres for the betterment of rural hinterland adopting a regional approach;
  3. providing infrastructural facilities to support such employment generation activities; and
  4. evolving resource generating schemes for local bodies for meeting the expinditure on operation and maintenance of the infra-structural facilities so created. The IDSMT scheme is intended to cover objectives (ii), (iii) and (iv) and objective (i) forms part of larger framework of employment generation.

13.5.5 To overcome the financial constraints inherent in the original IDSMT, the reformulated approach envisages that the scheme should not depend solely on budgetary finance but should seek support from institutional finance. The budgetary provisions should be used mainly for the provision of seed capital to the State Corporation/local bodies for generation of funds and for critical infrastructure which does not have any direct return.

13.5.6 The coverage of the scheme will he in towns with population between 20,000 to 3 lakhs as follows:

Population Categories
20,000 - 50,000 A
50,000 - 1,00,000 B
1,00,000 - 3,00,000 C
Less than 20,000 X

The guidelines for the scheme indicate the criteria and the order of priorities for selection of towns. The actual selection of the towns is, however, being left to the State Governments.

13.5.7 The scheme will make the towns with a population of 20,000 to 50,000 the prime target, while the inclusion of towns in 50,000 to 3,00,000 category and less than 20,000 category will be on a selective basis.

13.5.8 The schemes eligible for central assistance will depend on the category as well as special characteristics of the town. Central assistance will be available in general for the following activities:

  1. Strengthening of link road facilities;
  2. Provision of bus terminals;
  3. Development of market yards;
  4. Industrial sheds;
  5. Water supply;
  6. Construction/upgradation of road and side drains;
  7. Development of Shopping Centres;
  8. Provision of tourist facilities; and
  9. Localised drainage works.

13.5.9 Land acquisition and development have been a bottleneck. The modified scheme seeks to tackle this problem by excluding payment of land acquisition cost from the Central share and by stipulating that land for the scheme is to be made available within a year of approval. Access to institutional funds need not be limited to local bodies and urban development authorities. Moreover, the borrowers are expected to adopt a basket type approach so that the expenses incurred on the non-remunerative side and for the weaker sections are made up through adequate returns from the remunerative components. The projects under the scheme will have to be comprehensive covering all facets of development including social services and amenities, and be based on the long term Master Plan/Development Plan of the town within its district or regional context.

Financing Pattern

13.5.10 A summary of the financing pattern is presented in the following table:(Rs. in Lakhs)

Category Max.Project cose perm. Central Assistance (loans) State share HUDCO loan/ other sources
A 200 72 48 80
B 500 120 80 300
C 1000 180 120 700
X 100 36 24 40

The HUDCO will examine the project reports submitted by the State/UTs and will assist by way of lending for the identified components. The scheme will be monitored by the Town and Country Planning Organisation. The assistance for the towns which have already been selected under the erstwhile IDSMT will be continued during the Eighth Plan.

The proposed coverage of additional towns during Eighth Plan under modified IDSMT is about 200.

Environmental Improvement of Urban Slums

13.5.11 The scheme was made an integral part of the Minimum Needs Programme in 1974 and transferred to the State Sector. The scheme is applicable to notified slums in all urban areas and aims at provision of basic amenities like water supply, services, storm water drains, community baths and latrines, widening and paving of existing lanes and pathways and street lighting. During the Seventh Plan, the scheme provided for a per capita expenditure ofRs.300/-Against the target of 76.91 lakh slum dwellers, 99.78 lakhs slum dwellers were covered during the Seventh Plan. During 1990-91, the targeted number of beneficiaries was 15.40 lakhs, against which the achievement was 19.35 lakhs. The per capita expenditure was enhanced to Rs.525/-from 1991-92. During the Eighth Plan, the scope of the EIUS is being widened to ensure that the EIUS, the Urban Basic Services Programme, theNRY and the Scheme of Liberation of Scavengers form a coordinated whole. Assur-, ance of providing tenurial rights and evolving feasible cost recovery mechanism are important pre-conditions for the success of the programme in a longer term context.

Urban Basic Services for the Poor

13.5.12 The Urban Basic Services Scheme(UBSS) was initiated on a pilot basis in 1986, with the involvement ot'UNICEF and the State Governments. The Programme aimed at child survival and development; provision of learning opportunities for women and children and community organisation for slum population. The services, meant to be delivered, included environmental sanitation, primary health care, pre-school learning, vocational training and convergence of other social services at the slum level.

13.5.13 The Urban Basic Services for the Poor (UBSP) is a revised scheme based on the experience of UBSS. The revised scheme includes assistance to mentally retarded and handicapped children, rehabilitation of alchoholics and drug addicts, and special programmes for street children. It also enables formation of registered societies/cooperatives of slum dwellers at the community level. The scheme is to operate on the principle of convergence of programmes aimed at the urban poor and limited to those slums covered by EIUS. The Central Government will give Rs. 175/- per capita for provision of social services in the first year of a new project. In addition, the State Government will provide Rs.525/- per capita for physical amenities. From the second year onwards the per capita provision will be limited to the recurring component of Rs. 88/- per capita. This will be shared on matching basis between the Centre and the State. The scheme will also include provisions for strengthening of Urban Local Bodies, NGOS, some physical works, and creation of an organisation for monitoring and evaluation and organisation of marketing assistance.

Nehru Rozgar Yojana

13.5.14 The Nehru Rozgar Yojana was launched in October, 1989.' It is targetted towards persons living below the poverty line hi urban areas (i.e. households with an annual household income of Rs.11,850/- at 1991-92 prices). Within the target group of the urban poor the Scheduled Castes and the Si.:hcdu'icd1 Tribes will have special coverage through earmarking of funds for these sections. The NRY consists of the followina three schemes:

i) The Scheme of Urban-Micro Enterprises (SUME)

The SUME is designed to encourage unemployed and under-employed youth to take-up self-employment ventures in all urban settlements. The scheme envisages that 30% of beneficiaries should be women. The scheme has loan-cum- subsidy component and the training and infrastructure component. Under the loan and subsidy component, 25% of the project cost is given as a subsidy, subject to a ceilin.g of Rs.5,000/- for SCs/STs and women and Rs.4,000/- for others. It is now proposed that loans upto Rs.30,000/- per unit may be given by banks. The training component is aimed at up-gradation of technical and commercial skills of the beneficiaries. Infrastructural support in relation to common facility centres, job centres, design centres technology upgradation, marketing etc., is provided. Upto 30% of the funds earmarked for training and infrastructure support can be used for this purpose.

ii) The Scheme of Urban Wage Employment (SUVVE)

This scheme is designed to provide employment to the urban poor through the creation of socially and economically useful assets in the low income neighbourhoods in towns with a population below one lakh. Works like community centres, common worksheds, common selling places for the poor, paving of lanes, low cost water supply, construction of drains and sewers, pay and use community baths cum latrines and childrens ponds could he included in the scheme. The material labour ratio is 60:40. While the unskilled labourers are to be paki statutory minimum wages, the skilled labourers would receive market v.'ages. The beneficiaries of the scheme would be the urban poor. The works under the scheme have to be departmentallv executed.

iii) The Scheme of Housing and Shelter Upgradation(SHASHU)

The scheme aims at providing employment for persons involved in housini; and building activities. The scheme has two components viz. training and subsidy cum-loan assistance. The training component is meant for skill upgrada-tsnp of masons, cai?e,T,e:-.- iihimhers, sanitary \vo;'ke.rs. dJctndans ar'd otiw; engaged in construction trades as well as infrastructure support i'cr coii;;'"'1" facilities to beneficiaries and machinery equipment to training institutions. The scheme is operative in urban settlements having a population between 1 lakh and 20 lakhs with relaxation in the population criteria for hilly states, UTs and new industrial townships. HUDCO is monitoring this component of NRY and also provides the requisite institutional finance.

Sharing of Expenditure and Operation

13.5.15 The training component of SUME and SHASU has been entirely provided for by the Central Government. The remaining expenditure under SUME and SHASU has been shared on 50:50 basis respectively between the Central Government and the State Governments. The SUWE expenditure has been shared on 80:20 basis between the Central Government and the State Governments. During Eighth Plan period, the expenditure under all the three schemes is proposed to be shared between the Central Government and the State Government uniformly on 60:40 basis. At the State level, a State Urban Development Agency will monitorthe NRY. At the district level, the District Urban Development Agencies will be entrusted with the implementation of the scheme, while at the town level it will ^e entrusted to the Urban Local Bodies. The community structures created under Urban Basic Services for the poor will be mobilised for the NRY, as it will be implemented in convergence with other schemes.

Scheme for Educated Unemployed of Employment Generation in Urban Localities (SEEGUL)

13.5.16 This scheme (which is under review) in towns with a population above one lakh seeks to provide self employment opportunities for the educated unemployed. The scheme aims at providing training to beneficiaries for the enchance-ment of their technical skills. The scheme is targetted at all the unemployed persons who are matriculates, ITI diploma holders or have attended a Government sponsored technical training course of at least six months duration and whose family income does not exceed a specified level.

National Capital Region Planning Board (NCRPB)

13.5.17 The Regional Plan - 2001 for the National Capital Region approved by the National Capital Region Planning Board (NCRPB) has the following objectives:

  1. reducing pressure of population in Delhi and
  2. achieving a balanced and harmonious development of the National Capital Region.

13.5.18 The specific aims of the NCR Plan are:-(i) containing the growth of Delhi UT within a manageable population size of 112 lakhs by 2001 AD, (ii) moderate growth of Delhi Metropolitan Area (DMA), excluding Delhi UT, to accommodate a total population of 38 lakhs by 2001 AD, and (iii) induced growth of the rest of the region to hold 49 lakhs of urban population in towns/complexes identified for priority development i.e. 19 lakhs additional population in priority towns between 1990 and 2001 AD.

13.5.19 The main thrust areas during the Eighth Plan are as follows:-

  1. Large scale employment generation in priority towns by making available developed land;
  2. Development of Regional infrastructure: Transport, and Telecommunications;
  3. Development of local infrastructure in priority and DMA towns; and
  4. Development of State highways and transmission and distribution system for power in the State grid.

13.5.20 The NCR Plan envisages that the State Governments will play a role in operationalising the programmes, conceiving appropriate schemes/projects, financing and implementing the programmes. The Central Government is expected to play a lead role in the implementation of the development programmes. A conducive financial and legal climate will be created to enlist the participation of the private sector. The HUDCO and other financial institutions are also expected to finance the infrastructure development programmes in the NCR sub-regions. ,

13.5.21 The activities proposed to be taken up t during the Eighth Plan are as follows:

  1. Land Acquisition and Development for residential use and economic activities;
  2. Development of Sub-Regional Centres;
  3. Development of Counter Magnet Areas;
  4. Institutional strengthening for Plan Implementation;
  5. Upgradation of regional roads;
  6. Development of Power Transmission and Distribution; and
  7. Augmentation and Rehabilitation of Urban Infrastructure in DMA and Priority Towns.

13.5.22 The NCRPB is to be provided outlays, through the budget of Ministry of Urban Development, for extending loan assistance to States/Implementating Agencies. The States/Implementating Agencies will have to provide funds on a matching basis for land acquisition and development, development of regional centres and development of counter magnet areas while financial institutions such as HUDCO will be involved in local infrastructure schemes. In addition, schemes relating to National Highways, Expressways, Railways, Telecommunications and Power are proposed for which funds may be provided by the Central Ministries.

Urban Mapping and Research and Training

13.5.23 There is presently no agency to compile and maintain the requisite data and maps tor preparation of developmental plans of towns. In order to fill this gap, a three tier Urban and Regional Information System is proposed to be created at the national, the state and the local levels. Preparation of large scale base maps with the help of aerial photographs for about 50 fast growing towns is proposed. These maps may also be used for assessment and monitoring of property values in large cities.

13.5.24 Spatial Planning Approach, to achieve maximum coordination between the sectoral and spatial plans as well as total investment plan for the region is to be adopted during the Eighth Plan. This will require preparation of regional plans by States, in which endeavour the Central Government will extend necessary technical assistance for carrying out pilot studies in representative regions/districts and for drawing up an Implementation Plan linked with various programmes.

13.5.25 The planning units will also be strengthened to carry out this task of preparation of an Urban Development Strategy Paper for the State which will outline the developmental priorities of each town based on the economic function and role of the town within its district/regional context.

13.5.26 It is expected that during first three years of the Eighth Plan, exercises under the above two paras will provide the base for orienting future programmes of urban development sector to a long-term development plan of each priority town/city in a regional centre.

Urban Transport

13.5.27 The transport problems of urban areas, and specially those of the metropolises, have not received due attention in the past. Meanwhile, the traffic has cotinued to multiply with the result that the urban transport infrastructure in almost all large cities is on the verge of a breakdown. In the absence of reliable public transport, people are compelled to resort to private vehicles, which has aggravated congestion, pollution and energy intensity. There is no single agency to plan, coordinate or execute transport policies and programmes in urban areas.

13.5.28 It is in this context that the subject of planning and coordination of Urban Transport was entrusted to the Ministry of Urban Development in 1986 and in 1988-89 an Urban Transport Consortium Fund was created, which has since been employed to assist State Governments in taking up feasibility studies for Urban Transportation Systems. This appears to be a modest achievement because the objective of this was to involve the concerned Ministries of the Government of India, State Governments, financial institutions and local bodies in planning, coordination and execution of urban transport projects.

13.5.29 The Eighth Plan will continue the Consortium Approach initiated earlier. It may be worthwhile to consider the creation of a financial institution for funding urban transport projects on soft terms as also to explore involvement of private/joint sector agencies in the development of transport systems. The research and development priorities during the Eighth Plan include - development of Urban Bus and introduction of energy efficient transit systems. The participation of the Ministry of Railways in developing mass rapid transport system in mega cities appears to be crucial. A comprehensive study of urban transport is also long overdue and is proposed to be undertaken during the Eighth Plan.

Eighth Plan Outlay

13.6.1 The outlays on urban development sector during the Eighth Plan reflect the reorientation of urban development strategy and thrust areas. Thus, the IDSMT for which actual expenditure during the Seventh Plan (1985-90) was Rs.80.03 crores, is being enhanced to Rs. 145 crores as central assistance in its modified form. This will be supplemented by larger loan assistance from HUDCO. A complimentary programme in the water supply sector for towns below 20,000 is also envisaged with Central assistance ofRs. 50 crores. For the scheme ofUBSP, an amount of Rs. ]00 crores has been earmarked. The outlay on NCRPB will be Rs. 200 crores as compared to Rs. 35 crores during the Seventh Plan. This Central assistance has to be matched by contribution from the State Governments in accordance with the investment plan prepared by the NCRPB. The outaly on urban development in the State sector is also being raised from Rs. 1633 crores in the Seventh Plan to Rs. 3984.88 crores during the Eighth Plan. Similarly, for the Central sector, the budgetary support is being raised from Rs. 168 crores in the Seventh Plan to Rs. 692.10 crores during the Eighth Plan.

13.6.2 The States and Central sector outlays on Urban Development are presented in the following Table:

Table - 8 Outlays on Urban Development for the Eighth Five Year Plan (Rs. in Crores)

S. Description No. Eighth Plan Total Outlay (1992-97) Budgetary Support IEBR Total
1. States and UTs   3984.88
2. Central Government ,
2.1 Integrated Development of Small and Medium Towns 145.00
2.2 Nehru Rozgar Yojna 227.00
2.3 Urban Basic Services for the Poor 100.00
2.4 Contribution to NCR Planning Board 200.00
2.5 Central Urban Infrastructure Support Scheme 10.00    
2.6 Urban Transport Consortium Fund 4.60    
2.7 Research in Urban and Regional Planning and Urban Mapping 5.50    
3. Total (Central Sector) 692.10 600* 1292.10
4.Grand Total (Centre, States and UTs)   5276.98

*0ut of total IEBR ofRs. 1685 crores for Housing, Urban Development, Water Supply and Sanitation about Rs. 600 crores can be notionally allocated to Urban Development including Water Supply Schemes ' for small towns below 20,000. *

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