Infrastructure and Urbanization in India Issues and Challenges

In the last three decades India has experienced high growth without a significant rise in urbanization. However, this chapter finds that infrastructure primarily affects urbanization through promoting faster economic growth. Certain infrastructural facilities like roadways, electricity generation, and teledensity improved substantially but railways and waterways showed marginal improvement. Compared to the People’s Republic of China, India does not lag behind in terms of passenger traffic but substantially lags behind in terms of goods transport by rail, road, and air, and in electricity consumption. The low manufacturing base of India seems to be primarily responsible for it. This chapter shows that urbanization in India created demand for infrastructure investment but is not financed sufficiently, resulting in gaps in provision of infrastructure. The primary requirement of financing urban infrastructure is to strengthen the financial base of ULBs so that they can generate a predictable quantum of funds over a certain specified period. This would create a sufficient base on the basis of which external financing requirements can be planned and executed.