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Urbanization and Urban Transport -12 th Plan Thirteenth Annual Conference on Indian Economic Policy Reform Stanford University September 28, 2012 Patricia.

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Presentation on theme: "Urbanization and Urban Transport -12 th Plan Thirteenth Annual Conference on Indian Economic Policy Reform Stanford University September 28, 2012 Patricia."— Presentation transcript:

1 Urbanization and Urban Transport -12 th Plan Thirteenth Annual Conference on Indian Economic Policy Reform Stanford University September 28, 2012 Patricia Clarke Annez

2 12 th PlanMuch to like Approach paper has more emphasis on Urban Issues than 11 th Plan Comprehensive quantification of investment requirements 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 programsNational Urban Health Mission

3 Some Orders of Magnitude How relevant for Cities is the traditional Plan model? Flagship Programs11 th 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 12 th plan show investment requirements alone of more than 20X thatthose are conservative (dont include land costs, or the additional 50% for maintenance) For citiesthe Plan has to be about more than money and centrally sponsored schemesand this is recognized in the approach paper In todays diverse, faster- growing and private sector oriented economy, the plan should move away from directing investment to improving decisions locally

4 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 private) – More information and open access to information- - complement strong analytical capacity in India

5 Urban Public Lands-where the money is 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.

6 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 good

7 Private Urban LandsKey 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

8 Ahmedabad Built up density map 2001

9 AhmedabadBuilt Up Densities 1991 2001

10 Ahmedabad Location of newly built up areas between 2001-2011

11 Implications for Public Transport Uniform maximum floor space index strongly distorts density patterns Density profile appears to be flatteningaltho inability to access census 2011 prevents us from updating estimate As city gets richer, density of built up area is going uprather than down Far flung and fragmented suburban development will be difficult to service with public transport esp metro

12 Ahmedabad-Land Development at the Urban Periphery

13 AhmedabadConstraints on Brownfield Investments and Redevelopment Opaque, uncertain and punitive process makes legal improvements to high value land prohibitively expensive/time consuming etc. Illegal improvements cant attract formal finance and are very risky Result -- land frozen in current use and hhs unable to invest even if they have capacity to borrow Source: Mahila Housing Trust, Self Employed Womens Association and Environmental Planning Cooperative Ahmedabad




17 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 thisall three levels of G are neededand states are on the critical path Plan should tie resources to addressing these constraints rather than sending down cookie cutter solutions

18 Practical Steps Rather than vague conditionality like implement decentralizationrelevant published city level information could be mandatory entry level requirement Creating processes for expedited resolution of property rights disputes RKVYrural 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 level Evaluation office will help show which projects are working and which are not-could also focus on enabling policy environment

19 Thank you!

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