New Delhi: Three years after the 15th Finance Commission’s report for 2021-26 recommended the incubation of eight new cities in India, the Narendra Modi-led government is yet to finalise the names of the cities despite receiving 26 proposals last year, ThePrint has learnt.
The finance commission report, which was tabled in Parliament in February 2021, recommended a fund of Rs 8,000 crore for the incubation of eight cities. The ministry will select eight cities from the list of proposals it has received, after assessment.
The Union Ministry of Housing and Urban Affairs, which invited proposals in March 2022, had received proposals from 21 states till January last year.
According to the ministry’s response to a question in Rajya Sabha last December, the proposals pertained to the establishment of greenfield development projects in Ayodhya (Uttar Pradesh), Jagiroad (Assam), GIFT city expansion (Gujarat), Jabalpur Extension (Madhya Pradesh), Virul and Sawargaon Mal (Maharashtra), Pakyong (Sikkim), Thirumazhisai (Tamil Nadu), Karmadiganta (West Bengal), and Jabalpur Extension and Pithampur Phase 4 (Madhya Pradesh), among others.
According to the timeline recommended by the commission, the cities should have been selected by December 2022 and the first tranche of the grant released to them by 31 March 2023. But the ministry is still evaluating the proposals, said a senior ministry official aware of the developments.
“We had sent teams of experts to these cities to see the situation on the ground and assess its viability. Experts submitted their reports in March this year. A committee will now look at the proposals along with the reports submitted by experts to finalise the cities,” the official told ThePrint.
Asked what the reason for the delay was, the official said that the viability of the proposals have to be assessed. “There are multiple factors such as economic potential, land availability, connectivity and scope of developing as a self-sustaining city, among other factors that have to be studied in detail before approving the proposals.”
The finance commission had recommended the incubation of new cities to address the issue of fast-paced urbanisation in existing cities. “The Covid-19 pandemic has brought into sharp focus the well-known problem of inadequacy of appropriate housing and infrastructure facilities in urban areas. Given the trend in urbanisation, the country needs both rejuvenation of old cities as well as the setting up of new cities,” the commission said.
Some states such as Uttar Pradesh have already begun work on their proposal, while others such as Madhya Pradesh are waiting for the Centre’s decision before finalising their plan, especially for funds.
Urban development experts highlight the challenges of creating new cities, primarily due to land acquisition issues and the substantial initial investment needed for infrastructure. They say there is a need to develop urban extensions and also encourage vertical development with the city.
Mumbai-based urban development expert Vidhyadhar Phatak told ThePrint, “Development of new cities is a difficult proposition and has largely not worked worldwide. There are multiple challenges in developing new cities, primarily due to land acquisition issues and the substantial initial investment needed for infrastructure.”
He added, “Most important one being that infrastructure development takes precedence and it takes time before people start getting financial benefits of the new development. But urban extension of a city can be planned and will benefit existing cities. There is also a need to encourage vertical development of existing areas through redevelopment.”
States await Centre’s decision
Among the 21 states that sent proposals, Madhya Pradesh, Maharashtra, West Bengal, Kerala and Gujarat have submitted proposals for two cities each.
Madhya Pradesh, for instance, sent proposals for Jabalpur Extension and Pithampur Phase 4. The state government plans to develop Jabalpur Extension as a ‘garment city’ or garment hub, while it has proposed to develop Pithampur Phase 4 largely for housing due to its proximity to industrial units.
“We have the basic plan ready, but are waiting for the Centre’s decision to get clarity on the financial aspect. If the Centre approves one of the projects, then we will plan for balance funds accordingly. If the state government has to fund both the projects, then we will explore public-private partnership and other models to make it financially viable,” a senior official associated with Madhya Pradesh government’s urban development department told ThePrint.
The state government has started some basic development in Jabalpur Extension, which is spread over 400-plus hectares, to provide basic infrastructure such as roads.
In Rajasthan, where a new greenfield city is proposed at Ranpur near Kota, the work is yet to start.
“We have the plans ready, but are waiting for the Centre’s decision. The focus is largely on developing it as an educational institution hub with residential facilities. The proposed area for development is around 110 hectares,” a senior official associated with the town planning department told ThePrint.
Unlike Rajasthan and Madhya Pradesh, Uttar Pradesh has already started the development of the greenfield township project in Ayodhya.
Located 5 kilometres from the Ram Mandir in Ayodhya, work on development of the greenfield township project is going on at a fast pace.
Prime Minister Narendra Modi laid a foundation stone of Rs 2180 crore in December last year. The Uttar Pradesh Housing and Urban development Board, which is executing the project, has started allotting land parcels to religious institutions and state governments for bhawans.
“The work on the project is underway. A detailed proposal was sent to the Centre to develop this greenfield township as a self-sustaining city and also to decongest the Ayodhya city area, a senior official associated with the UP housing and urban development board told ThePrint, adding that the “state will fund it, in case we don’t get funds from the Centre, as it is a crucial project for the future development of Ayodhya.”
(Edited by Radifah Kabir)
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