Government Boosts Urban Budget Allocation Tenfold Since 2014, Says Senior Official

Bhubaneswar, October 25 (Daily Kiran) : Bhubaneswar has become a focal point for urban development initiatives, with significant budget increases announced by government officials. Rajiv Gauba, a member of the NITI Aayog, revealed on Sunday that budget allocations for urban areas have surged tenfold since 2014. This increase is part of a broader effort to enhance the growth of Indian cities through various major schemes such as the Smart Cities Mission, AMRUT, Pradhan Mantri Awas Yojana, Swachh Bharat Mission, and the Urban Livelihoods Mission.

Gauba highlighted that approximately ₹3.7 lakh crore has been invested in metro rail and bus transport systems. Speaking at the closing session of the Second National Urban Conference, he provided insights into the NITI Aayog’s Growth Hub initiative. He mentioned the introduction of a ₹1 lakh crore Urban Challenge Fund in the 2025-26 budget aimed at transforming cities into centers of development. Additionally, this year’s budget allocates ₹5,000 crore for each of the seven urban economic zones over the next five years.

To ensure better service delivery and effective citizen participation, Gauba emphasized the need to empower city governments meaningfully. He referenced a report titled “Moving Towards Effective Urban Governance,” jointly prepared by the NITI Aayog and the Ministry of Housing and Urban Affairs. The report advocates for the implementation of directly elected mayors with five-year terms, the establishment of a mayor-in-council system, and timely municipal elections.

According to Gauba, states should delegate all 18 functions to urban local bodies as per the 74th Constitutional Amendment. These functions include master planning, water supply, fire services, and traffic management. He stressed that effective governance cannot be achieved from state capitals; city governments must possess adequate authority and institutional capacity to address local needs, thereby ensuring meaningful citizen engagement.

Gauba pointed out that revenues for municipal bodies remain low, highlighting the need to improve the collection of property taxes and user fees. He noted that grants from the central finance commission to urban local bodies have more than doubled compared to previous amounts, with their share increasing from 36% to 45%. However, funding from states to cities remains insufficient.

He called for the regular establishment of state finance commissions and adequate financial transfers to urban local bodies. Addressing issues of urban planning and housing, Gauba advocated for significant changes to the current planning framework. He urged for reforms in restrictive floor area ratio (FAR) and building regulations that limit land availability and increase costs for residential and commercial users.

Gauba emphasized the need for mixed land use, development around transport hubs, and land aggregation to enhance land availability and reduce the costs of housing and economic activities. He also highlighted the importance of affordable rental housing for migrant workers, industrial laborers, students, and young professionals, urging states to adopt the Model Tenancy Act to increase the availability of rental homes.

He concluded by stating that states could implement these reforms by enacting new municipal corporation laws. He urged the Ministry of Housing and Urban Affairs to link support under urban missions to the implementation of these reforms, emphasizing the necessity of empowering city governments to realize India’s urban development potential and achieve the goals of developed states and a developed India.