Let our cities rise

Let our cities rise

Niti Aayog provides a useful roadmap for reforms and faster urbanisation
Five year plans, which were the fulcrum of India's economic approach for close to seven decades, have been phased out this year. In their place, a long-term vision is being developed by government thinktank Niti Aayog. In moving towards this vision, the Aayog last week released an action agenda that runs over three years and aims to initiate changes that are doable within this period, providing a welcome roadmap for economic reforms.

As governments have limited bandwidth, Niti Aayog correctly emphasises selected areas which can both boost economic growth in the near future and help India realise its long-term aspirations: Urbanisation and infrastructure development in particular can simultaneously meet both objectives. Here the agenda has evolved from being driven by government investment to the private sector playing a greater part, making India one of the world's largest initiators of public private partnerships. But government needs to enhance its capacity to design frameworks for ensuring that the private sector has incentives to invest and projects run their full course. Its focus in PPPs has to be on providing a more conducive environment for projects.

Niti Aayog also underlines the regulatory changes needed to push India on the path to faster urbanisation, which will boost the economy while helping absorb surplus agricultural labour. Urbanisation has hitherto been shackled by such a poor legal framework that even as India's urban population has grown over five decades, share of rental housing in overall housing has dropped. This can be remedied within a short period by freeing up laws governing rent controls, land ceilings, the floor space index and stamp duties. Let's remove the irrational curbs on the vertical expansion of our cities.