Need for a unified urbanisation plan, Pg8

Key Highlights:

• India's 2027 Census will classify urban settlements based on traditional criteria, despite evolving economic realities.
• The United Nations estimates 44% of Indians live in urban areas today, projecting this to exceed 720 million by 2050.
• The Economic Survey 2026 indicated India was functionally 63% urban in 2015, significantly higher than official definitions.
• The 16th Finance Commission increased local grants for urban local bodies to 45% and introduced a ₹10,000-crore 'urbanisation premium'.
• A National Urbanisation Policy is proposed to create a coherent framework for recognizing transitioning settlements and aligning fiscal incentives.

India's Urbanisation.jpg

Detailed Insights:

• Current urban classification relies on Census Town Criteria (population ≥ 5,000, density ≥ 400/sq km, ≥75% male non-agricultural workers) or notification as a Statutory Town.
• Urban growth is highly uneven, with 94% of urban settlements being small towns, while 60% of the urban population resides in Class I cities.
• Peri-urban areas are experiencing the fastest growth at approximately 4.15% annually, outpacing growth within administrative city limits.
• The Union Budget 2026 allocated ₹5,000 crore to City Economic Regions, shifting focus from individual cities to broader economic geographies.
• Classification significantly impacts access to master plans, municipal finance, Finance Commission grants, and scheme eligibility.
• Article 243Q(2) grants States discretion in notifying urban areas, often without standardized criteria or public reasoning.
• Many statutory and census towns lack master plans, and planning legislation in several states remains unupdated since the 74th Constitutional Amendment of 1992.
• A National Urbanisation Policy aims to standardize definitions, modernize spatial planning, reorient finance, and establish a National Urbanisation Council.
• The policy advocates for regular review of settlement status using geospatial data, rather than solely during the Census.
• It emphasizes extending regional planning beyond million-plus cities and making peri-urban zoning mandatory.
• India's municipal revenue is low at about 1% of GDP, highlighting the need for stronger own-source revenue and formula-based transfers.
• Existing constitutional provisions for Metropolitan and District Planning Committees (Articles 243ZE and 243ZD) can be leveraged for improved coordination.
• Reforms should be based on functional units like airsheds or river basins, rather than strictly administrative boundaries, for effective problem-solving.

Key Concepts Involved:

• Census Town: A settlement meeting specific demographic and economic criteria but not formally notified as urban by the state.
• Statutory Town: An urban area formally notified by a State government under relevant municipal laws.
• Peri-urban Areas: Transitional zones surrounding cities, characterized by mixed rural and urban features and rapid development.
• 74th Constitutional Amendment Act: Constitutionalized Urban Local Bodies, providing a framework for municipal governance, planning, and decentralization.