“As India grows, the growth has preceded infrastructure. We have a huge infrastructure deficit and need to bridge this.” – Kamal Nath, Urban Development Minister, India
India is on the move. Its surging economy has triggered an urban expansion that is seeing new towns and cities emerge across the country. For Urban Development Minister Kamal Nath, the focus now is ensuring that India has the infrastructure needed to cope with this transformational change.
Propelled by strong economic growth, India has seen huge numbers of its population forsake rural areas in favor of its towns and cities. Its urban population is projected to rise to 700 million in 2020 and the number of cities will reach close to 70 in the next decade. There will also be six megacities with a population of 10 million — more than in the whole of Europe.
Mind the gap
Urban Development Minister Kamal Nath is focusing on delivering the infrastructure necessary to cope with these sweeping demographic shifts and the huge infrastructure deficit.
The Indian Government is poised to launch the US$40b second phase of its urban renewal plan within the next two months. Phase II of the Jawaharlal Nehru National Urban Renewal Mission will be carried out over the next five years to support infrastructure development in India’s 28 states.
The Minister believes that Indian land needs to be used more efficiently in the years ahead. “We are working to formulate land use plans with town and city planners,” he says.
Role of the private sector
While much of the impetus for this urban transformation comes from national and state government, the private sector has an important role to play, particularly in light of a growth rate that has recently slowed to 5.3%.
The fundamentals that make India attractive to investors remain intact, including:
- High potential of the domestic market
- An emerging middle class
- Cost competitiveness
- Huge talent pool
This underlying strength will help Nath’s drive to deliver a number of investment-based models of private public partnerships (PPP) that can implement the massive projects. “PPP has been a success in India but it is a mistaken notion to assume there is a one-size-fits-all model,” he says. “We are appraising various PPP models and would like to get a basket of PPP options to continue large-scale development.”
“In the next 10 years, 70% of new jobs will be created in our urban areas, and almost 70% of our GDP will be generated in urban areas,” says Nath. Irrespective of slowing economic growth, India’s towns and cities will be at the forefront of the country’s development in the years to come.
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