Re: [in-enaction] budget 07/08: ...and the cities

Anand Bhatt wrote:
> Just back from a longish briefing on the Budget

Om Prakash Mathur: The Budget and the cities

India plans to spend just 0.6% of GDP on its cities versus 3-5% in China

Om Prakash Mathur / New Delhi March 11, 2007


The week following the presentation of the Budget has occupied the 
country’s macro and fiscal economists into debating whether or not this 
Budget would help achieve the growth targets and objectives, bring the 
fiscal deficit to levels required under the Fiscal Responsibility and 
Budget Management Act (FRBMA), improve the lives of the aam admi, and 
enable the country to swiftly integrate with the global economic system. 
With the din of the economists having subsided, let me draw the 
attention of the finance minister to at least one aspect whose 
centrality to the country’s growth trajectory seems to have been missed 
out in the budget-making exercise. This relates to cities and towns: how 
sensitive has this Budget been to the financial needs of cities and 
towns? Has the Budget made adequate provisions for them to be able to 
contribute to, let us say, the XIth Plan goals and objectives? Cities 
and towns hold 310 million people or 30 per cent of the country’s total 
population. About 75 million of them belong to the category of the poor 
(2004-05 estimates). Cities and towns are key generators of the net 
domestic product (NDP): the CSO estimates that in 1999-2000, cities and 
towns generated 51.7 per cent of the NDP, claiming a productivity 
advantage of 1.7:1 vis-à-vis the rural areas. They accounted for 56 per 
cent of the increase that took place in the NDP between 1993-94 and 
1999-2000.
....
The Budget, of course, bears the assumption that fund allocation for 
JNNURM will leverage private capital — an estimated leveraging factor of 
one, apart from bringing in close-to-matching investments from states 
and cities. The Budget probably also assumes that there will be some 
off-Budget financing available for urban infrastructure from specialised 
financing institutions and a few enterprising urban local governments 
who may venture to expand their resource base by entering the debt 
market. All this would add up to an investment of approximately Rs 
21,000-23,000 crore in 2007-08,

cont'd....
http://www.business-standard.com/common/storypage.php?autono=277282&leftnm=4&subLeft=0&chkFlg=