The Union Budget 2017-18 continued the high rhetoric with a new catchphrase TEC (Transform, Energise and Clean) India, whereas flagship programme like “Smart Cities” received a raw deal, except affordable housing and Swachh Bharat Mission. The real estate is highly sluggish and it was expected to revitalise the confidence in the urban economy, swiftly aligning it on the path of growth trajectory.
However, the prognostic approach for urban development is completely missing as sluggish economic growth continues after demonetization. Real Estate Investment Trust has been mooted to stimulate housing activity without giving any details on how it stimulates real estate investment. A few concessions under Pradhan Mantri Awas Yojna for affordable housing has been given with 100 per cent deduction on profits for a firm which undertakes housing
project for flats up to 30 sq metres in four metro cities and 60 sq metres in other cities within three years of approval.
Further, urban rejuvenation mission received Rs 9,783 crores for construction services under ‘Housing for All’. A new metro rail policy and construction of airports in Tier-2 cities under PPP will improve mobility of workers.
However, Bengaluru and other major metropolitan cities continue to face the basic infrastructure problem like providing drinking water, improving road infrastructure, recycling of municipal waste, slum development, reducing air pollution, etc. For want of investments, this will affect efficiency, productivity and quality of life of millions of city dwellers.
As the Economic Survey 2016-17 observes, Bengaluru collects only 5 per cent of its potential property taxes, which implies that poor revenue generation results in poor infrastructure unless budgetary allocations come from the state and Central government. There are no programmes for Bengaluru city for which budgetary allocation for linking Metro Rail to Bangalore International Airport was expected.
Overall the Union budget has completely focused on rural infrastructure and neglected the urban development needs.
However, rural development will reduce migration to cities, improve access to basic needs and decrease income inequality. The Union budget is just like Hamlet without the Prince of Denmark. The budget is without vision on urban development, which could cost the economy.
Author: Prof Krishna Raj is Associate Professor and Head, Centre for Economic Studies and Policy, Institute for Social and Economic Change, Bengaluru
Credits Bangalore Mirror