Economic revival of cities post-pandemic

The COVID-19 pandemic has begun to fade but its effects have left deep scars on some important sectors of the country, including healthcare and the economy. The economies of cities, through its businesses and markets, have suffered heavily and continue to bleed financially. It is high time to work actively on their revival.

The Government of India took major steps in this year’s budgetary allocations trying to negate the downward trajectory of the country’s economy which includes a whopping fund of `2,23,846 crores (137 per cent increase from last year) allotted to the health and wellness sector. The central government has also introduced various welfare programs in Budget 2020-21 such as the Jal Jeevan Mission, and the augmentation of public buses to revive the health of cities after the COVID-19 pandemic.

Effects of Pandemic on cities and budgetary allocations

Urban spaces accounted for a major chunk of COVID-19 cases in the country and around the world. Moreover, the migrant crisis during the COVID-19 pandemic has hit the very core of the urban spaces generating an urgent need to create cities that are spatially more spread out. Despite this, according to the Ministry of Finance, the Government of India has set aside
Rs 54,281 crore for urban development, a meager nine per cent rise as compared to last year’s allocation. The allocation is around 1.5 per cent of the total budget outlay even though, according to the World Economic Forum (WEF), almost 34 per cent of the country’s population resides in urban areas. According to a study by WEF titled ‘Indian Cities in the post-pandemic world’, about 35 per cent of the total urban households cannot afford housing at market prices and there is a need to create a new paradigm for inclusive and resilient cities. Economies of cities were also hit badly as an estimated 140 million people lost their jobs due to suspension of economic activities owing to the indefinite lockdown. The Indian economy shrunk by a whopping 23.9 per cent in the April-June quarter last year, according to the Ministry of Statistics and Programme Implementation. This was the biggest economic slip due to the COVID-19 pandemic among major economies of the world, including the United Kingdom, Italy, Japan, the United States of America (USA), and China.

The corporation in times of pandemic has witnessed a drop in users of almost 3,073 lakh people which has added to the losses of the department. Continuance of public transport is essential as it supports the livelihoods of various people

Dr Ravinder Singh Minhas
Deputy Chief General Manager, DTC

Post-pandemic economic revival of Indian cities

Budget allocations of the central government have been presented this year keeping the pandemic in consideration. Ministry of Finance has come up with some new policies to revive the health sector including the Prime Minister (PM) Aatmanirbhar Swasth Bharat Yojana, with a fund of Rs 64,180 crores over a period of 6 years. Public Transport is an important sector which supports the economic well-being of the cities and has suffered serious repercussions in the times of pandemic. Metro services have been allocated Rs 20,000 crore for this financial year, marking an increase of 6 per cent as compared to last year. In a webinar conducted by Team Urban Update, Dr Ravinder Singh Minhas, Deputy Chief General Manager, Delhi Transport Corporation, said, “The Corporation, in times of pandemic, witnessed a drop in passengers to the tune of Rs 3,073 lakh. This added to the losses of the department.” He added that continuance of public transport is essential as it supports the livelihoods of various people. To boost public transport post-pandemic, the central government has come up with an innovative PPP (Public-Private Partnership) model to augment public bus transport and has also announced the induction of almost 20,000 buses which will affect more than 100 Indian cities. MetroLite and MetroNeo for tier-2 and peripheral areas of tier-1 cities respectively; Jal Jeevan Mission (Urban); Voluntary Vehicle Scrapping policy etc., are some of the initiatives in Budget 2020-21 which are intended for economic revival of Indian cities.

Global initiatives and lessons learnt

Different cities across the world have designed their respective models to combat the effects of the pandemic. Inia must learn from them and be a part of such international collaborations. For instance, in November 2020, WEF had selected 36 cities from 22 countries across the world to engage in a dialogue and design a roadmap to safely adopt new technology post-pandemic. Four Indian cities namely Bengaluru, Faridabad, Indore and Hyderabad were selected to lead the economic development of smart cities from around the world. International economic organisations will play a major role in the post-pandemic revival of cities as almost 600 urban centres from across the world contribute around 80 per cent of the world’s Gross Domestic Product (GDP), according to WEF.
Cities cannot stabilise their economy without making them resilient to disasters like those which affected Indian cities at different points of time during the pandemic and only added to their stress. Some happened due to sheer human carelessness, such as a fire at a COVID-19 facility in South Delhi, while some were a result of natural phenomenon such as the Amphan cyclone. In this area, Rotterdam presents a good example where the city is built below sea level and despite this, the water management and economic cycle of the city is commendable. During another webinar organised by Team Urban Update, Dr Amit Prothi, Director, Global Resilient Cities Network, Singapore, cited the example of Rotterdam and talked about how Surat, Gujarat is working with the authorities of Rotterdam to implement the methodology used by them. Such a cooperative approach is necessary to establish a knowledge-sharing framework where authorities from across the world can work together to learn the innovative models of different countries.
Foreign Direct Investment (FDI) is an important factor that helps the cities to grow and also analyse their policies depending on how favourable the location is to the investors. According to the Department of Promotion of Industry and Internal Trade, Maharashtra, Karnataka and Delhi are the top three states to receive highest influx of foreign investments. This shows the efforts of the city to synchronise the policies in such a way that it makes the location favourable for investments. Such efforts will play a major role in every Indian city so that they have enough resources to boost the economy of the region.

The way forward

The economic recovery of cities coming out of the COVID-19 pandemic is a continuous and long process. The most vulnerable section – migrant workers, has to be kept in focus during policy formulation as they play a vital role in boosting the economy of urban centres. Urban replica of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), which was proposed by experts and economists in a letter sent to Narendra Singh Tomar, Minister of Agriculture and Farmers Welfare, Government of India, is the popular policy intervention suggested for bettering the condition of the urban poor.

Conclusion

Urban centres are the backbone of a country’s development. Therefore, their economies have to be preserved and promoted to ensure the economic growth of the entire country. Sustainable revival of the economy is important in the aftermath of the COVID-19 pandemic to get cities back on track. In addition to budgetary allocations and policy formulation, implementation of these policies and utilisation of budget is important to improve the face of the urban economy. Micro, Small, and Medium Enterprises (MSME), which are one of the worst-hit due to the spread of the novel coronavirus, have been allocated `15,700 crore, which is double the amount allocated for them in the previous year, according to the Ministry of Finance. The time has come to remember and realise the vision articulated by Prime Minister Narendra Modi in May 2020, when he said that India will set an example in economic revival for the world.