Housing and Urban Development Corporation 23.21 The bulk of the remaining public sector investment in housing is to be channelled through the Housing and Urban Development Corporation (HUDCO). As on 31st July, 1980, HUDCO had sanctioned 1274 schemes in 319 towns and cities in 17 States and 4 Union Territories involving loan assistance of Rs. 600 crores, and has disbursed about Rs. 337 crores. On completion, these projects will provide about 6.8 lakh dwelling units and about 62,000 developed plots and a number of shops and commercial complexes. Of these, about 86 per cent of the plots are for the benefit of the EWS and LIG. During the current year 1980-81, HUDCO is expected to sanction loans of the order of Rs. 160 crores and disbursements are visualised at about Rs. 89 crores. In addition, HUDCO has launched new schemes like financing rural housing, apex cooperative housing societies and urban development schemes.
23.22 The Plan proposes an increase in the equity of HUDCO from the present Rs. 25 crores to Rs. 75 crores. Including the recovery of loans, it will then be able to invest about Rs. 600 crores over the next five years in its various housing programmes. Currently, HUDCO is allocating its loan disbursements in the following Proportions:-
Economically Weaker Section 30%
Low income Group 25%
Middle Income Group 25%
High income Group 20%
HUDCO should be encouraged to step up its activities in the provision of EWS and LIG housing in the future, perhaps by utilising elements of cross subsidisation from its high income group housing and commercial activities.
LIC and other Institutional Support 23.23 The Life Insurance Corporation (LIC) is the other public financial organisation, which has provided financing for housing. Upto March 1977, the LIC has provided Rs. 728.56 crores in loans for various housing programmes. its experience with promoting housing by linking it with insurance policies does not appear to have been too successful. Loans advanced so far under this scheme have amounted to only Rs. 53 crores. The scheme should, therefore, be reviewed and amended in order to make it more effective. LIC is statutorily required to invest 25 per cent of
393
the net accretion to its controlled fund in socially, oriened schemes, such as, housing, electrification, water supply, sewerage and industrial estates. If the housing programme is to help the weaker sections of the community, who cannot otherwise benefit from the scheme of loans to policy holders, the LIC would need substantially to increase the allocation of funds for housing for EWS and LIG. A similar principle should apply for investments in housing being made by the General Insurance Corporation.
23.24 Cooperative housing programmes represent an ideal form of self-help housing and, therefore, need encouragement. Developed or partially developed land will be allocated to the housing cooperative societies where successful functioning has been hampered due to lack of this facility.
Urban Land Policy 23.25 A ceiling on urban land prescribed under the Urban Land (Ceiling and Regulation) Act 1976 was meant to prevent speculation in land and to ensure the optimal allocation of land to different users. The implementation of the Act has experienced great difficulties and the State Governments have not been able to implement it effectively. A Working Group was set up in the Ministry of Works and Housing with representatives from State Governments to suggest ways and means of improving the Act.The report has since been submitted to Government and is being examined. In the meantime, there is a general feeling that costs of land have increased substantially, both of private land as well as of land owned by public agencies. As a result, fears are expressed that urban housing might become too expensive for a large number of people. It would be useful, therefore, to initiate systematic investigations into the functioning of urban land markets and to identify the causes of the increase in the value of land. Measures can then be recommended to promote a more efficient and equitable functioning of the urban land market so that these enormous and unwarranted increases in land values are checked.
Outlays and Targets 23.26 The public sector outlay on housing in the Sixth Plan is shown in Table 23.1.
Table 23.1
Sixth Plan Outlay on Housing
(Rs. crores)
Scheme Fifth Plan
Plan outlay
1974-79 1980-85
(outlay)
(1) (2) (3)
A. States and Union Territories
1 Rural House Site-cum-House Con-
struction Scheme (MNP) 55.00 353.50
2 Social Housing Schemes 450.56 837.37*
Total : States and Union Territories 505.56 1190.87
B. Central Sector
3 Housing and Urban Development
Corporation (HUDCO) 14.00 50.00
4 National Buildings Organisation
(NBO) 1.68 2.00
5 Hindustan Prefab Ltd. 0.15 0.05
6 General Pool Office and Residential
Accommodation 51.12 .00
7 Subsidised Housing Scheme for
Plantation Workers 5.00
8 Housing Scheme for Dock Labour 0.26 0.20
9 House Building Advance to Govern-
ment Employees 93.25
10 Science and Technology 2.00
11 Police Housing scheme @ 23.00
12 National Building Materials Cor-
poration 0.15
13 Training Institute for C.P.W.D. 0.50
Total : Central Sector. 95.36 300.00
Grand Total : States/UT and Cen-
tral Sector 600.92 1490.87
*Includes Rs. 200.02 crores for departmental housing and house building advance.
@ Transferred to the State sector w.e.f. 1-4-1979
23.27 The major part of the public sector outlays is on social housing schemes which will also receive institutional finance. Aggregate investments in such schemes and the physical targets are indicated in Table 23.2.
394
URBAN DEVELOPMENT
Objectives and Strategy 23.28 Urbanisation in India has grown at a relatively slow rate throughout this century as well as in the last 30 years. This is quite consistent with the overall pattern of development that the country has experienced where the proportions of people engaged in agricultural and non-agricultural pursuits have barely changed over this whole period. Despite this slow rate of growth, the country exhibits all the urban problems that can be found in any part of the world. Moreover, many of these problems are aggravated by the very low per capita income observed even in large cities. Unlike many other countries where their capital cities or other metropolitan cities are excessively dominant, India exhibits a very balanced size distribution of settlements. According to the 1971 Census, out of a total population of 547.95 million, about 109 million were in urban areas. The growth rate of urban population during the 1961-71 decade was about 3.2 per cent per year as compared with about 2.2 per cent per year for the total population. The distribution of the urban population between different size classes of towns in 1971, along with the inter-censal growth rates, is given in Table 23.3.
395
Table 23.3
Sl. Number Popula- Percentage Annual
No. Town Classification of tion of popu- Rate of
Towns (million) lation growth
1961-71
(0) (1) (2) (3) (4) (5)
1. Class I (1 lakh and above) 151 53.38 48.92 4.27
2. Class II (50,000 to 99,999) 219 14.71 13.48 4.43
3. Class III (20,000 to 49,999) 652 19.95 18.29 2.36
4. Class IV (10,000 to 19,999) 987 13.96 12.80 2.11
5. Class V (5,000 to 9999) 820 6.20 5.68 (-)0.22
6. Class VI (less than 5,000) 290 0.90 0.83 (-)0.65
Total 3119 109.10 100.00
23.29 It would appear from the Table that larger towns have grown faster than smaller towns, and it might therefore be Concluded that the country is suffering from an unhealthy process of urbanization which must be remedied. The reality is, however, more complex with a great deal of inter-regional variation as well as intra-regional differences. Part of the misconception that arises from the above Table is caused by the movement of towns Into higher size-classes along with the growth of population. For example, only 107 towns were classified as Class I towns in 1961 as opposed to 151 in 1971. A better appreciation of the process of urbanisation in India is obtained from the Table 23.4. The growth rates in this Table are obtained by keeping towns in each size class constant, according to their classification in the 1961 Census:
Table 23.4
Rate of Growth of Population
Size class Category Annual RAte of Gro
wth of Population
(1961-71)@
1 Class I 3.04
(1 lakh and above)
2 Class II and III) . 2.92
(20,000-99,999)
3 Class III,IV,V. 2.86
(5,000 to 19,999)
4 Class VI 3.20
(Less than 5000)
@ Growth rates compiled from information in M. K. Jain's "Inter- State Variations in the Trends of Urbanisation in India"-International Institute for Population Studies, Bombay, 1977.
23.30 The process of urbanisation has thus been relatively balanced in India. Within this overall pattern, it is important to distinguish problems as they occur between different regions and different cities. For example, excluding West Bengal, the whole Eastern region (Orissa, Bihar, Assam) was less than 10 per cent urbanised in 1971 as compared with 28 and 31 percent for Gujarat and Maharashtra at the high end. Hence, while in the backward States the problems of urbanisation are caused by stagnation, those in the more advanced States are caused by relatively rapid growth. The articulation of national urbanisation policy should then involve specific consideration of regional problems and urban development should be viewed in the context of its relationship with rural development in each region. The problems of each urban area should be seen in the light of its specific functions within the overall settlement framework.
23.31 As in housing, public resources for urban development are necessarily limited and high priority areas for public investment have to be selected for particular attention. The thrust of the urbanisation policy during the next decade would be to give greater emphasis to the provision of adequate infrastructural and other facilities in the small, medium and intermediate towns which have been neglected hitherto in this respect. The aim would be to strengthen these market centres to equip them to serve as growth and service centres for the rural hinterland. For this purpose, increased investments are proposed in these towns in housing, water supply and communication facilities. Likewise, facilities for education, medical care and recreation will need to be augmented. Given the economic importance of large Cities, care must be taken to improve the conditions of the urban poor and raise civic services, such that the large capital investments
396
of all kinds that exist in these cities are utilised better Given the constraints on available resources, the only way that the appalling conditions in which the urban poor live today can be improved is to adopt more realistic norms and standards for urban services. We need to adopt low cost standards for infrastructure so as to benefit the maximum number of urban people.
23.32 In order to ensure the continuance of the present balanced distribution of urban population, positive inducements need to be given for setting up new industries and other commercial and profes- sional establishments in small, medium and intermediate cities, taking advantage of the particular special conditions available in each place. These could include appropriate concessions in respect of capital expenditures on housing, schools, entertainment facilities, power, water supply, sanitation and drainage. Power, telephone and telex connections must be improved in these towns. It is essential to strengthen local bodies organisationally as well as financially so that they can themselves improve the infrastructure and services in their towns. While these improvements are being made, tax incentives can also be considered for the location of employment generating, productive activities in these towns.
23.33 This kind of balanced approach is essential to ensure an orderly process of urbanisation alongwith the overall development of the country. There has been a tendency to neglect infrastructure provision in small, medium and intermediate cities in the past which may have restricted their role as dynamic growth centres. This must be redressed.
Programmes 23.34 In the Sixth Plan, the major emphasis is placed on the following measures:
(a) Instead of attempting a massive relocation of slums, the greater emphasis would be on environmental improvement of slums for which substantially increased investment will be made. A particular area becomes a slum more because of poor environmental conditions, poor drainage, sewerage and sanitation, rather than the poor state of structures. Of the total urban population, nearly a fifth is estimated to constitute the slum population. In 1985, the magnitude of such population needing attention is estimated to be about 33.1 million. Of this, only 6.8 million have been covered so far by the scheme in the earlier Plans. The proposed in- vestment of about Rs. 150 crores will benefit about 10.0 million people, assuming a per capita expenditure of Rs. 150. This scheme will be applicable to all urban areas irrespective of the size of the city/town. This forms part of the Minimum Needs Programme. The facilities that will be provided are water supply, storm water drainage, paving of streets, street lighting and provision of community latrines. Area, inhabited by scheduled castes or scavengers etc. are to be given due priority.
(b) A provision of Rs. 96 crores has been made in the Central Sector for the Centrally Sponsored Scheme of Integrated Development of Small and Medium Towns. This will be in the form of assistance to the State Governments on a sharing basis. It is visualised that about Rs. 200 crores would become available from the Central, State Governments and implementing agencies for the development of about 200 towns during the Plan period. Small and medium towns with a population of less than one lakh are eligible to receive assistance from the Centre under the Scheme, provided matching contributions are forthcoming from the State Governments/ implementing agencies.
(c) In the next five years, Rs. 423 crores will be spent by the State Governments in urban development programmes. Besides including the States, share against the centrally sponsored programme of Integrated Development of Small and Medium Towns, the above provision is meant for providing facilities such as roads, pavements, minor civic works as well as such amenities as bus sheds, markets, shopping complex, theaters etc. It is expected that the State Governments would make adequate provisions for the continuing commitments and further activities in respect of the scheme of Integrated Urban Development Programme in Metropolitan Cities and Areas of National Importance, which ceased to be centrally sponsored from 1-4-1979. A sum of Rs. 247 crores is being provided for the continuing development projects in Calcutta being co- ordinated by the Calcutta Metropolitan Development Authority and aided by the world Bank. An additional sum of about Rs. 66 crores will be spent on on-going schemes in State Capital Projects in Bhopal, Gandhinagar and Chandigarh. These outlays cover schemes to improve water supply, sewerage, roads, traffic and transportation. Provision is also being made for area development, etc. in these cities.