Tue Mar 25 03:00:00 UTC 2025: ## India’s Urban Future: A Call for Decentralized Funding

**Gandhinagar, Gujarat, March 25, 2025** – India is poised to become the world’s most populous urban nation, yet its urban development strategy is facing criticism for its top-down approach. A new analysis by former Shimla deputy mayor Tikender Singh Panwar and former NIUA director Hitesh Vaidya, both members of the Kerala Urban Commission, argues that the current centrally-driven model hinders effective urban planning and resource allocation.

For decades, successive Indian governments have implemented numerous urban missions, from JNNURM to PMAY, significantly influencing urbanization. While these initiatives have spurred growth, they often prioritize centralized planning over local needs, imposing standardized solutions unsuitable for diverse regional contexts. The authors highlight the irony of “urban development,” a state subject, being heavily shaped by the central government. This often leads to mismatched infrastructure projects and inefficient use of funds, as seen in the Smart Cities Mission.

The authors contend that the current system, driven by a focus on the “engines of growth,” treats cities as tools for national economic targets rather than considering their unique contexts. They cite examples of regional disparities: Gujarat’s urbanization patterns differing sharply from Kerala’s rural-urban continuum; and the lack of need for housing or sanitation projects in some cities while others desperately require them. The imposition of nationwide schemes like the Pradhan Mantri Awas Yojana (PMAY) and Swachh Bharat Mission (SBM) without considering local needs is criticized as inefficient.

The authors propose a radical shift towards decentralized funding. They advocate for a 70% devolution of the Union Budget directly to state governments, allowing them to prioritize projects based on local needs and contextual realities. The remaining 30% could focus on national priorities like climate-resilient infrastructure. This would empower city governments to tailor solutions to their unique demographics and challenges, fostering genuine community engagement and improving the effectiveness of urban development initiatives. This restructuring of financial devolution aims to connect government with citizen communities, strengthening local governance and aligning urban planning with the reality of India’s diverse urban landscape.

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