Urbanization and Urban
Transport -12th Plan
Thirteenth Annual Conference on Indian Economic Policy Reform
Stanford University
September 28, 2012
Patricia Clarke Annez
[email protected]
12th Plan—Much to like
• Approach paper has more emphasis on Urban
Issues than 11th Plan
• Comprehensive quantification of investment
• Endorses shift toward Local Solutions and
Governance away from top down mandates
• Desire to address inefficiencies in land use
• Recognizes gaps in urban coverage of plan
programs—National Urban Health Mission
Some Orders of Magnitude
• How relevant for Cities is the traditional Plan model?
• Flagship Programs—11th Plan
– Generous estimate allocates 17% of project funds to urban areas
– JNNURM— the only large urban infrastructure program accounts for
7% of total outlays
– JnNURM allocation per annum is about Rs. 250 per capita in cities
– HPEC estimates for 12th plan show investment requirements alone of
more than 20X that—those are conservative (don’t include land costs,
or the additional 50% for maintenance)
• For cities—the Plan has to be about more than money and centrally
sponsored schemes—and this is recognized in the approach paper
• In today’s diverse, faster- growing and private sector oriented
economy, the plan should move away from directing investment to
improving decisions locally
Some Specific Ideas about moving
beyond Money
• Two key areas where Plan should send the
right signals for Urban Policy and Investments
– Better Urban land management (public and
– More information and open access to information- complement strong analytical capacity in India
Urban Public Lands-where the money
• HPEC estimates roughly 100,000 Rs per capita
today’ s urban population is needed to meet next
20 years of urban investment requirements
• Early estimates from a public land inventory in
Ahmedabad suggest value of underutilized public
land is of equivalent order of magnitude
• This land is well situated and valuable for urban
economy and transport networks etc.
Urban Public Lands Management
Who owns it?
What is it worth?
Where is it?
Who is benefitting from allocations?
What are rules for disposition?
What is value of public land used for subsidizing PPPs?&
What is bang for the buck in these barter deals?
• How much is under or inappropriately utilized? ( e.g. golf
courses on defense lands)
None of this is readily knowable now--but could be and needs
to be if this asset is to be managed for the broader public
Private Urban Lands—Key Factor of
Production in Urban Economy
• Regulations prevent intensive use of land in
locations market would value
• Property rights system impedes private
investments and redevelopment of land
• Both distortions affect productivity of
infrastructure investment
• Near absence of relevant economic information
stymies policy analysis and impoverishes dialogue
–protects rents of beneficiaries of status quo
Ahmedabad Built up density map 2001
Ahmedabad—Built Up Densities 1991
Ahmedabad Location of newly built up
areas between 2001-2011
Implications for Public Transport
• Uniform maximum floor space index strongly
distorts density patterns
• Density profile appears to be flattening—altho
inability to access census 2011 prevents us from
updating estimate
• As city gets richer, density of built up area is
going up—rather than down
• Far flung and fragmented suburban development
will be difficult to service with public transport
esp metro
Ahmedabad-Land Development at the
Urban Periphery
Plot by plot
upgrading of
Plot by plot
grant of NA
Plot by plot
registering of land
transaction and
levy of stamp duty
Plot by plot
updating of
land cadastre
Property by
registration and
levy of stamp duty
Sanction of DP
Sanction of TPS
Zoning of land
in DP
Building city
Detailed area
planning –
Building TPS
Plot by Plot development of
real estate
Building permission
Construction monitoring
Building use permission
Purchase of land
for development
Use of
Urban DevelopmentDept.
Private Sector
Dev. Authority/Local Govt.
Revenue Dept.
Ahmedabad—Constraints on Brownfield
Investments and Redevelopment
• Opaque, uncertain and punitive process
makes legal improvements to high value land
prohibitively expensive/time consuming etc.
• Illegal improvements can’t attract formal
finance and are very risky
• Result -- land frozen in current use and hh’s
unable to invest even if they have capacity to
Source: Mahila Housing Trust, Self
Employed Women’s Association and
Environmental Planning Cooperative
Relevance for Plan Investments
• Bad Policies and Dysfunctional property rights system are
more costly than ever as purchasing power and demand for
well serviced land grows
• Ramping up infra spending in this distorted environment
will be difficult and wasteful on a large scale
• Information poverty gives bad policies staying power
• Decentralization and Local government empowerment will
not solve this—all three levels of G are needed—and states
are on the critical path
• Plan should tie resources to addressing these constraints
rather than sending down cookie cutter solutions
Practical Steps
• Rather than vague conditionality like ‘implement
decentralization’—relevant published city level information could
be mandatory entry level requirement
• Creating processes for expedited resolution of property rights
• RKVY—rural program encourages States to design programs to
meet agreed objectives rather than mandating specific investments
– This approach may be more constructive for engaging the States on
cities –better than an argument on decentralization which makes an
unpopular topic like urban even less appealing politically?
– Could also encourage more information gathering and analysis at local
• Evaluation office will help show which projects are working and
which are not-could also focus on ‘enabling policy environment’
Thank you!

Patricia Annez - Stanford Center for International Development (SCID)