The 16th finance commission's report, tabled in parliament on sunday, focuses on accelerating urbanisation. It recommends a rs 56,100 crore grant for wastewater management projects in selected cities and a rs 10,000 crore urbanisation premium. The report stresses the urgent need to revamp drainage systems in cities.
The 16th finance commission has flagged the urgent need to improve drainage systems in indian cities and the slow pace of urbanisation, recommending substantial grants. The report notes that while large metros can raise their own resources, smaller cities cannot, proposing fiscal support for revamping drainage in middle-level municipalities on a cost-sharing basis.
It recommends a special infrastructure component of rs 56,100 crore for wastewater projects in 22 selected cities, including pune, jaipur, lucknow, kanpur, nagpur, patna, rajkot, amritsar, madurai and howrah. Indore's wastewater management is highlighted as a successful model, having ranked first in the swachh survekshan for seven consecutive years. “Efficient liquid waste management was achieved through comprehensive interception of household and grey water sewage outfalls into rivers and stormwater drains, coupled with the establishment of a robust sewerage network,” the report states.
Addressing delays in urbanisation, the commission points to slow and ad-hoc conversion of census towns into statutory towns and hesitant mergers of peri-urban areas. “Second, we have observed that there are unusually long delays in conferring a statutory urban status on areas that come to exhibit all urban characteristics. India’s urbanisation process remains constrained by the slow and ad-hoc conversion of census towns into statutory towns and the hesitant merger of peri-urban areas into nearby urban local bodies,” it says. A rs 10,000 crore urbanisation premium is suggested to incentivise the rural-to-urban transition, along with incorporating peri-urban areas into municipal bodies.
Overall, a total of rs 3,56,257 crore is recommended for urban local bodies from 2026-2027 to 2030-2031, comprising rs 2,32,125 crore basic grant, rs 29,016 crore ulb performance component, rs 56,100 crore special infrastructure component and rs 10,000 crore urbanisation premium. These measures aim to accelerate urban development and strengthen infrastructure.
