Delhi, Bangalore need to improve urban governance

UNI, Monday, 14 August , 2006, 12:04

Five cities of Delhi, Bangalore, Hyderabad, Pune and Chandigarh which have shown great economic vigor in the last decade will have to accelerate in building infrastructure and improve urban governance to enhance their competitiveness, RBI Deputy Governor Rakesh Mohan has said.

‘’The competitiveness of cities, such as Delhi, Bangalore, Hyderabad, Pune and Chandigarh, which have shown great economic vigor over the last decade in India, will depend on acceleration in urban infrastructure investment and improvement in urban governance and management,'’ Mr Mohan said in a paper published in the RBI Bulletin.

The successful financing of such an enhanced level of investment will depend crucially on the financial viability of such projects, he said.

The continued high growth of the Indian economy would get strengthened if the efficiency of Indian cities improves, he added.

Given that the level of Indian urbanisation is still less than 30 per cent and 60 per cent of the total population in India still dependent on agriculture, the continuation of high economic growth will depend on the higher rate of labour absorption by cities.

This will need much higher rate of labour using manufacturing, higher levels of urban infrastructure investment, along with knowlewdge-based forward looking city management. Thus, the Indian situation is quite different from that of China.

The availability of component engineering skills at a lower cost in India is contributing significantly to the relocation of product development band design from developed countries.

Thus for Asian cities growing in the next 30-50 years it is becoming increasingly clear that the key to their success will indeed lie in the continous enhancement of human resources.

Similarly, in India it is the southern region where a large number of private colleges and universities have emerged to cater to the increasing demand from industry for technical personnel.

‘’The magnitude of urban population growth expected in India, China, Indonesia, Pakistan and Bangladesh over the next 30 years is such that pressures on international resource mobilisation are bound to arise,'’ Mr Mohan said, adding that the urban infrastructure investment would then exceed available savings in these countries and the current alleged savings glut will disappear over a period of time.

The efficient intermediation of financial savings within countries, and across countries will therefore be as important for urban development as for financial market development per se and for monetary policy makers in the years to come, Mr Mohan added.