Budget 2021 Allocates Rs 8,000 Crore to Build 8 New Cities

Budget 2021 Allocates Rs 8,000 Crore to Build 8 New Cities

The Ministry of Housing and Urban Affairs (MoHUA) on Wednesday said that the 15th Finance Commission has recommended a grant of Rs 8,000 crore as aid for development of eight new cities in India. The Ministry called the grant “like never before’.

“To my knowledge, the Finance Commission has never given a grant like this before. The Finance Commission has given us a new window and new thinking. Earlier we had stopped thinking about new cities. (But) the way the nation is growing, unless we have planned cities, it will all be outgrowth cities. And outgrowth is an inefficient use of the city,” the Indian Express quoted MoHUA Secretary Durga Shanker Mishra in its report.

The 2011 Census had categorised 31.2 per cent of India as urban, however, only 26 per cent of that as statutory towns. “This gap of 5 per cent of urbanised India – populated by roughly 6 crore people – is living in either census towns or in outgrowth towns,” he said.

Throwing light on the grant, the Ministry said that the Finance Commission has also allotted Rs 450 crore to a “shared municipal services” fund where it will help smaller urban bodies with their back-end work such as database maintenance.

The ministry made 86 clusters of the smallest urban local bodies (ULBs) which they can help service from afar.

Census towns are towns of over 5,000 people, with a density of more than 400 per sq km, and more than 75 per cent of non-farm, male labourers. These towns are still under the panchayat systems, and not municipalities. Outgrowth towns are in the periphery of big cities, also governed by panchayats.

Meanwhile, Mishra did not specify whether these would be new, greenfield cities or in areas where urbanisation has already started taking course.

"In her Budget speech, Finance Minister Nirmala Sitharaman had announced a new bus scheme and emphasis on MetroLite and MetroNeo systems in cities. The bus augmentation will focus on cities with population of over 5 lakh and the state capitals. With a focus on Metros in Tier-II cities such as Gorakhpur, Jammu, Srinagar, Bhiwadi, and Darihera, the goal is to extend India’s Metro lines to 1,000 km, from a current estimate of 700 km," Mishra said.

For the MoHUA's Pradhan Mantri Awas Yojna (PMAY), the Finance Ministry had allocated Rs 8,000 crore in 2020-21, but spent Rs 21,000 crore. This year, it was Rs 8,000 crore.