Does India Need Urban Planning?

While launching the smart cities mission, the Prime Minister Narendra Modi said that in India, there is a lack of holistic vision in urban planning. Narendra Modi said that growth in Indian cities is not driven by administrators, but by real estate developers. But, the NDA government intends to allow cities to plan their future growth.

Many intellectuals oppose building planned cities. Some intellectuals believe that the soul of India lies in villages, and that India should not follow the path of westernized Asian cities that build into the sky. Proponents of the market economy are not sympathetic to this claim. But, they tend to believe that cities evolve spontaneously, and that it is futile to plan their structure. There is more than a grain of truth to this.

Cities, historically, have evolved spontaneously. Urbanization is, essentially, migration of people to urban areas. Migration helps people reap large gains because productivity rises dramatically when talented people live and work together. It is true that though cities need building, you cannot create the stimulating atmosphere in cities by building large structures. But, from this does it follow that infrastructural capacity of the government does not play a large role in the development of cities? Hardly. This would have been true if private firms are allowed to provide these services when the government does not. But, this is very unlikely to happen anytime soon.

Transport and water and sewer are generally provided by local authorities. When the government does not provide these services, far less land will be accessible to build homes and commercial and industrial establishments. When water supply is lacking, the shortage of real estate in India would be far more costly, because it would lead to a shortage of homes and higher rents.

Generally, governments do not engage in intelligent planning. For instance, when poor water supply leads to a shortage of homes, governments might engage in building homes. This might be far more expensive than providing better water supply or sewerage. Similarly, a bridge, highway or railroad might cost far less than the land it unlocks. If the government builds better infrastructure in Noida and Gurgaon, it would have accelerated the suburbanization process in the Delhi National Capital Region.

For example, in the built-up area in Manhattan went up seven fold along a street grid that was established in 1811. Shenzhen was once a fishing village, but now it  known as the Silicon Valley of China, with a population of 7 million. It is said that if Shenzhen were a city state, its GDP growth rate would have been the highest in mankind's recorded history. Shenzhen is a planned city, and did not spontaneously evolve.

Instead of providing such services, the Indian government often engages in imposing extreme land use regulation and hoards large tracts of land in India's extensive urban areas. In fact, a common observation about the Indian government is that it is engaged in more building than necessary where it is least helpful.