Thiruvananthapuram, August 12: Arvind Panagariya, the chairman of the 16th Finance Commission, stated on Wednesday that urbanization will play a crucial role in India’s economic transformation and its goal of becoming a developed nation by 2047.
Addressing the sixth edition of the Lok Bhavan Conversation on “Urban Areas as Engines of Development for a Developed India 2047,” Panagariya emphasized that achieving India’s target of a $30 trillion developed and globally competitive economy cannot be realized without productive, robust, and efficiently operated cities.
He noted that nearly every developed country has a high level of urbanization. India also has a long history of urban development and should not hesitate to promote urbanization.
Panagariya asserted that the aim of urbanization should not be limited to improving the living conditions of the existing urban population. Cities must become conducive to business and employment to attract people from rural areas and create job opportunities.
“Economic activities promote urbanization,” he stated, highlighting that job creation will help transform rural settlements and surrounding areas of large cities and towns into vibrant urban regions.
He pointed out that the shortage of urban land and its high cost are among the biggest obstacles to economic activities in Indian cities. Acquiring large plots of land for industrial and business activities remains extremely challenging due to fragmented land ownership and often unclear land ownership documents.
Using the example of the Singur project in West Bengal, he explained that thousands of different plots had to be acquired there. In contrast, in countries like the United States, land ownership for large projects is relatively less fragmented.
Panagariya stressed the need for reforms to facilitate land availability for productive economic activities and to reduce obstacles in land acquisition and urban development.
The Finance Commission chairman also emphasized the necessity for strong municipal governance and better coordination among various agencies responsible for urban development.
He stated that cities should have governance structures that support economic activities, infrastructure development, and job creation. Policies related to urban planning and land use should promote improvements in citizens’ living conditions as well as entrepreneurship.
On this occasion, Governor Rajendra Arlekar remarked that urbanization should not be equated with Westernization. He stated, “The roots of urbanization should begin with our traditions.”
He emphasized that India’s urban development should evolve from its culture, traditions, and thought processes rather than merely adopting the Western model.
He concluded that urbanization will significantly contribute to the country’s economic growth and the vision of a developed India.
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