June 12, 1999

Mega-Cities Plan

Way to the future – Growth centers

 

Background

• People are migrating from farms to cities in extraordinary numbers
• Mumbai’s population increased 400% in 40 years; 300 rural families move in each day in search of work or better quality of life
• Despite chronic shortages of housing, water, power and transportation; urban community life, full of opportunity and hope, attracts the rural population
• The overburdened city centers cannot accommodate significant population increases
• China, in its effort to reduce rural population from 87% to 50% intends to move 440 million people to new urban centers both by creating new cities and renewing existing towns’ infrastructure

Purpose

• Indian farms have surplus labour which is underemployed. If the dependents on farms are reduced, the economic strain on the countryside will be less and savings will increase leading to investments in mechanisation, better seeds and fertilizer etc.
• The excess rural population will get employment in the creation of infrastructure in new cities. This will also absorb the educated unemployed (Planning Commission analysts expect 60% of the unemployed will come from educated classes by 2010)

Methodology

• Announce the creation/renewal of 100 towns/cities each with a target population of 1-1.5 million which will have trading centers, industrial estates, IT nodes, tourism spots etc. with extensive private/foreign participation
• The salient features will be:
  a.  Create independent authorities for each town
  b.  Planned development with minimum bureaucracy
  c.  Strict environmental laws
  d.  Liberal labour laws to encourage efficiency and attract foreign companies but strict as to minimum wages & guaranteed housing, education to all employees- good quality of life.
  e.  Declare some Free Trade Zones to allow import/export without barriers. Deemed export benefit for Indian suppliers.
  f.  Good port/ airport/ roads/ telecommunication networks- Privatised with low license fees and long leases
  g.  Wired cities fully networked in all spheres- paperless transactions

• Self-managed cities with low “Value Added Tax (VAT)” to pay for city governance and Royalty to Central and State governments

Resources

• Set up City Development Authorities (Ref: Maharashtra) with initial Government grants and market borrowings
• Collaborate with cities like Singapore/ Hong Kong
• Start land acquisition and invest in initial base infrastructure
• Auction land/ projects to private enterprises
• Permit NRI/ Foreign/ Indian investment without questions asked

Piyush Goyal

Mumbai

12^th June, 1999