Economy: September 2021 Current Affairs | Indian Economy for State PSC Exams - BPSC (Bihar) PDF Download

 Page 1


 
24                                                                                                                                                                       
3. ECONOMY 
3.1. URBAN PLANNING IN INDIA 
Why in news? 
NITI Aayog recently launched a report titled ‘Reforms in Urban Planning Capacity in India’ on measures to ramp up 
urban planning capacity in India.  
Overview of Urbanization in India 
• Population: India’s urban population stands at around 377 
million (Census of India, 2011). 
o During 2011–36, urban growth will be responsible for 
73% of the rise in total population (MoHFW, 2019). 
Earlier estimations indicate that India will be 50% 
urban by 2050 (UN-Habitat, 2017).  
• Economic contribution: Urbanization contributes nearly 
60% to India’s Gross Domestic Product (GDP). 
• Geographical share: Urban land in India is 3.1% of the 
total land area of the country. 
• Classification of Urban agglomerations: 
o Statutory Towns: Settlements that are notified under 
law by the concerned State/UT government and with 
local bodies such as municipal corporations, municipalities, municipal committees, etc.  
o Census Towns: Settlements that are classified as urban in the census after they have met a set of criteria like at least 
75% of the male ‘main workers’ engaged in non-agricultural pursuits etc. These are governed as villages and do not 
necessarily have urban local bodies.  
o Outgrowths: These are viable units, such as a village, clearly identifiable in terms of their boundaries and locations. 
Outgrowths possess urban features in terms of infrastructure and amenities, such as pucca roads, electricity, etc., and 
are physically contiguous with the core town of the urban agglomeration.  
Need for reforms in Planned Urban development 
• Accelerated growth in Urban population: This will bring 
immense stress on the infrastructure of many Indian cities 
and towns which along with unregulatable development may 
be detrimental to the society, economy, and environment. 
o Further, Covid-19 revealed the dire need for planning and 
management of our cities, with an emphasis on the 
health of citizens. 
• Significance of Urbanization for India’s economy: Effective 
interventions incorporating urban and spatial planning, urban 
land markets, and governance are needed to tap unutilised 
potential of economies of scale presented by Urban centres 
of India.  
• Fulfilling India’s global commitments: Cities play a decisive 
role in achieving India’s commitments to the global agendas, 
such as Sustainable Development Goals (SDGs) 2030; United 
Nation Habitat’s New Urban Agenda; and the Paris Climate 
Agreement.    
• Achieving India’s national growth targets: Strategic spatial 
planning will be instrumental in attaining India’s growth 
targets, such as: USD 5 trillion economy by 2024; creation of 11 large industrial corridors as part of the National 
Industrial Corridor Programme etc. 
Page 2


 
24                                                                                                                                                                       
3. ECONOMY 
3.1. URBAN PLANNING IN INDIA 
Why in news? 
NITI Aayog recently launched a report titled ‘Reforms in Urban Planning Capacity in India’ on measures to ramp up 
urban planning capacity in India.  
Overview of Urbanization in India 
• Population: India’s urban population stands at around 377 
million (Census of India, 2011). 
o During 2011–36, urban growth will be responsible for 
73% of the rise in total population (MoHFW, 2019). 
Earlier estimations indicate that India will be 50% 
urban by 2050 (UN-Habitat, 2017).  
• Economic contribution: Urbanization contributes nearly 
60% to India’s Gross Domestic Product (GDP). 
• Geographical share: Urban land in India is 3.1% of the 
total land area of the country. 
• Classification of Urban agglomerations: 
o Statutory Towns: Settlements that are notified under 
law by the concerned State/UT government and with 
local bodies such as municipal corporations, municipalities, municipal committees, etc.  
o Census Towns: Settlements that are classified as urban in the census after they have met a set of criteria like at least 
75% of the male ‘main workers’ engaged in non-agricultural pursuits etc. These are governed as villages and do not 
necessarily have urban local bodies.  
o Outgrowths: These are viable units, such as a village, clearly identifiable in terms of their boundaries and locations. 
Outgrowths possess urban features in terms of infrastructure and amenities, such as pucca roads, electricity, etc., and 
are physically contiguous with the core town of the urban agglomeration.  
Need for reforms in Planned Urban development 
• Accelerated growth in Urban population: This will bring 
immense stress on the infrastructure of many Indian cities 
and towns which along with unregulatable development may 
be detrimental to the society, economy, and environment. 
o Further, Covid-19 revealed the dire need for planning and 
management of our cities, with an emphasis on the 
health of citizens. 
• Significance of Urbanization for India’s economy: Effective 
interventions incorporating urban and spatial planning, urban 
land markets, and governance are needed to tap unutilised 
potential of economies of scale presented by Urban centres 
of India.  
• Fulfilling India’s global commitments: Cities play a decisive 
role in achieving India’s commitments to the global agendas, 
such as Sustainable Development Goals (SDGs) 2030; United 
Nation Habitat’s New Urban Agenda; and the Paris Climate 
Agreement.    
• Achieving India’s national growth targets: Strategic spatial 
planning will be instrumental in attaining India’s growth 
targets, such as: USD 5 trillion economy by 2024; creation of 11 large industrial corridors as part of the National 
Industrial Corridor Programme etc. 
 
25                                                                                                                                                                       
• Infrastructure development: The urban sector has a significant share (17%) in the National Infrastructure Pipeline 
(NIP) for FY 2020–25 to facilitate infrastructure projects in the country. 
• Ensuring Multi-sectoral Convergence: Stronger urban planning ecosystem in the country is needed to converge 
unlinked sectoral schemes that are executed by different government departments. 
o For instance, Smart Cities Mission of Ministry of Housing and Urban Affairs and National Mission on Electric 
Mobility of Ministry of Heavy Industries can gain significantly from coordination. 
• Interstate disparities: While certain States such as Goa, Tamil Nadu, Kerala, Maharashtra, and Gujarat have attained 
over 40% urbanization, other States such as Bihar, Odisha, Assam, and Uttar Pradesh continue to be at a lower level 
of urbanization than the national average of 31.1%. 
• Multidimensional issues emanating from unplanned development: Issues like slums, traffic congestion, pressure 
on basic infrastructure, sub-optimal utilization of urban land, extreme air pollution, urban flooding, water scarcity 
and droughts indicate a deep and substantial lack of adequate urban planning and governance frameworks. 
Key Challenges to urban-planning capacity of India 
• Lack of institutional clarity: Multiplicity of authorities dealing with planning of land and sectors like water, 
sewerage, solid waste etc. at the city as well as State level often creates ambiguity, overlaps and even discord over 
division of functions and responsibilities.  
• Absence of effective decentralisation: This can be highlighted by issues such as- 
o Most of the ULBs have not been allocated the ‘urban planning’ function.  
o MPCs and DPCs are not functional in most of the States and in a few States, they are not even constituted yet. 
• Absence of participative decision making: States have created parastatals like metropolitan development 
authorities, urban development authorities, etc., to serve the functions which should have been accorded to ULBs. 
These bodies are not directly answerable to the citizens. 
• Functional issues in municipal governance bodies:  
o In most Indian cities, the mayor is endowed with limited executive responsibilities. 
o Many States have a skeletal machinery of planning which are not necessarily headed by qualified urban 
planners. 
• Non-Recognition of ‘Urban’ Areas: Around 8000 towns are counted as urban for population estimation under the 
Census of India (2011); however, half of them, known as census towns, are still administratively ‘rural’. Also, 
parameters that define ‘urban’ in context of India are outdated. 
• Lack of Planning of Cities and Regions: Presently, about 52% of the statutory towns and 76% of the census towns 
do not have any Master Plans to guide their spatial growth and infrastructural investments. 
• Other issues- 
o Lack of adequate and technically qualified planners in public sector. 
o Low participation of private sector in Urban planning. 
Steps taken in India for urban development and planning   
• Constitution (Seventy-Fourth Amendment) Act 1992: It gave a thrust to decentralization and mandated the setting up of 
Urban local bodies (ULBs) in urban areas.  
o It also provided for setting up of Metropolitan Planning Committees (MPCs) and District Planning Committees (DPCs) 
with responsibility of preparing ‘draft development plan’ on matters of common interest between the panchayats and 
the municipalities. 
• Model Building Bye Laws 2016 are legal tools to ensure orderly development of an area.  
• Schemes: The government introduced Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation 
(AMRUT) for planned and integrated urban management. Pradhan Mantri Awas Yojana (Urban) and Swachh Bharat 
Mission – Urban were introduced to ensure housing for all and clean urban environment respectively.   
• The Ease of Living Index (EoLI): published by the Ministry of Housing and Urban Affairs (MoHUA) promotes competitive 
spirit among the states to ensure sustainable urbanization.  
• The 15
th
 Finance Commission has recommended a performance-based challenge fund of ? 8,000 crore to States for 
incubation of new cities. The amount available for each proposed new city is ? 1,000 crore and a State can have only one 
new city under the proposed scheme.  
Page 3


 
24                                                                                                                                                                       
3. ECONOMY 
3.1. URBAN PLANNING IN INDIA 
Why in news? 
NITI Aayog recently launched a report titled ‘Reforms in Urban Planning Capacity in India’ on measures to ramp up 
urban planning capacity in India.  
Overview of Urbanization in India 
• Population: India’s urban population stands at around 377 
million (Census of India, 2011). 
o During 2011–36, urban growth will be responsible for 
73% of the rise in total population (MoHFW, 2019). 
Earlier estimations indicate that India will be 50% 
urban by 2050 (UN-Habitat, 2017).  
• Economic contribution: Urbanization contributes nearly 
60% to India’s Gross Domestic Product (GDP). 
• Geographical share: Urban land in India is 3.1% of the 
total land area of the country. 
• Classification of Urban agglomerations: 
o Statutory Towns: Settlements that are notified under 
law by the concerned State/UT government and with 
local bodies such as municipal corporations, municipalities, municipal committees, etc.  
o Census Towns: Settlements that are classified as urban in the census after they have met a set of criteria like at least 
75% of the male ‘main workers’ engaged in non-agricultural pursuits etc. These are governed as villages and do not 
necessarily have urban local bodies.  
o Outgrowths: These are viable units, such as a village, clearly identifiable in terms of their boundaries and locations. 
Outgrowths possess urban features in terms of infrastructure and amenities, such as pucca roads, electricity, etc., and 
are physically contiguous with the core town of the urban agglomeration.  
Need for reforms in Planned Urban development 
• Accelerated growth in Urban population: This will bring 
immense stress on the infrastructure of many Indian cities 
and towns which along with unregulatable development may 
be detrimental to the society, economy, and environment. 
o Further, Covid-19 revealed the dire need for planning and 
management of our cities, with an emphasis on the 
health of citizens. 
• Significance of Urbanization for India’s economy: Effective 
interventions incorporating urban and spatial planning, urban 
land markets, and governance are needed to tap unutilised 
potential of economies of scale presented by Urban centres 
of India.  
• Fulfilling India’s global commitments: Cities play a decisive 
role in achieving India’s commitments to the global agendas, 
such as Sustainable Development Goals (SDGs) 2030; United 
Nation Habitat’s New Urban Agenda; and the Paris Climate 
Agreement.    
• Achieving India’s national growth targets: Strategic spatial 
planning will be instrumental in attaining India’s growth 
targets, such as: USD 5 trillion economy by 2024; creation of 11 large industrial corridors as part of the National 
Industrial Corridor Programme etc. 
 
25                                                                                                                                                                       
• Infrastructure development: The urban sector has a significant share (17%) in the National Infrastructure Pipeline 
(NIP) for FY 2020–25 to facilitate infrastructure projects in the country. 
• Ensuring Multi-sectoral Convergence: Stronger urban planning ecosystem in the country is needed to converge 
unlinked sectoral schemes that are executed by different government departments. 
o For instance, Smart Cities Mission of Ministry of Housing and Urban Affairs and National Mission on Electric 
Mobility of Ministry of Heavy Industries can gain significantly from coordination. 
• Interstate disparities: While certain States such as Goa, Tamil Nadu, Kerala, Maharashtra, and Gujarat have attained 
over 40% urbanization, other States such as Bihar, Odisha, Assam, and Uttar Pradesh continue to be at a lower level 
of urbanization than the national average of 31.1%. 
• Multidimensional issues emanating from unplanned development: Issues like slums, traffic congestion, pressure 
on basic infrastructure, sub-optimal utilization of urban land, extreme air pollution, urban flooding, water scarcity 
and droughts indicate a deep and substantial lack of adequate urban planning and governance frameworks. 
Key Challenges to urban-planning capacity of India 
• Lack of institutional clarity: Multiplicity of authorities dealing with planning of land and sectors like water, 
sewerage, solid waste etc. at the city as well as State level often creates ambiguity, overlaps and even discord over 
division of functions and responsibilities.  
• Absence of effective decentralisation: This can be highlighted by issues such as- 
o Most of the ULBs have not been allocated the ‘urban planning’ function.  
o MPCs and DPCs are not functional in most of the States and in a few States, they are not even constituted yet. 
• Absence of participative decision making: States have created parastatals like metropolitan development 
authorities, urban development authorities, etc., to serve the functions which should have been accorded to ULBs. 
These bodies are not directly answerable to the citizens. 
• Functional issues in municipal governance bodies:  
o In most Indian cities, the mayor is endowed with limited executive responsibilities. 
o Many States have a skeletal machinery of planning which are not necessarily headed by qualified urban 
planners. 
• Non-Recognition of ‘Urban’ Areas: Around 8000 towns are counted as urban for population estimation under the 
Census of India (2011); however, half of them, known as census towns, are still administratively ‘rural’. Also, 
parameters that define ‘urban’ in context of India are outdated. 
• Lack of Planning of Cities and Regions: Presently, about 52% of the statutory towns and 76% of the census towns 
do not have any Master Plans to guide their spatial growth and infrastructural investments. 
• Other issues- 
o Lack of adequate and technically qualified planners in public sector. 
o Low participation of private sector in Urban planning. 
Steps taken in India for urban development and planning   
• Constitution (Seventy-Fourth Amendment) Act 1992: It gave a thrust to decentralization and mandated the setting up of 
Urban local bodies (ULBs) in urban areas.  
o It also provided for setting up of Metropolitan Planning Committees (MPCs) and District Planning Committees (DPCs) 
with responsibility of preparing ‘draft development plan’ on matters of common interest between the panchayats and 
the municipalities. 
• Model Building Bye Laws 2016 are legal tools to ensure orderly development of an area.  
• Schemes: The government introduced Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation 
(AMRUT) for planned and integrated urban management. Pradhan Mantri Awas Yojana (Urban) and Swachh Bharat 
Mission – Urban were introduced to ensure housing for all and clean urban environment respectively.   
• The Ease of Living Index (EoLI): published by the Ministry of Housing and Urban Affairs (MoHUA) promotes competitive 
spirit among the states to ensure sustainable urbanization.  
• The 15
th
 Finance Commission has recommended a performance-based challenge fund of ? 8,000 crore to States for 
incubation of new cities. The amount available for each proposed new city is ? 1,000 crore and a State can have only one 
new city under the proposed scheme.  
 
26                                                                                                                                                                       
o Lack of Specialised Professionals in the specific areas like rural area planning, coastal area planning, industrial 
area planning and hill area planning. 
o Limited Awareness about Urban Planning and its associated socio-economic benefits among administrators or 
elected officials.  
Way Forward: Recommendations of the Report 
Planning of healthy 
cities 
• A central sector scheme, ‘500 Healthy Cities Programme’, for a period of 5 years where in priority 
cities will be selected jointly by state and local bodies. 
Interventions and 
advancements in 
existing approaches of 
master plan preparation 
• Assessment of the needs and aspirations of citizens. 
• Development and inclusion of specific proposals with clear responsibilities of the agencies 
concerned and a financial implementation plan in the master plan report. 
• Preparation of an interoperable base map of the city on GIS platform 
• Mapping of all the relevant sub-sectors of a city.  
Optimum utilization of 
urban land 
• A sub-scheme ‘Preparation/Revision of Development Control Regulations’ for optimum 
utilization of urban land based on scientific evidence to maximize the efficiency of urban land of 
the cities under the ‘Healthy City Programme’. 
Re-engineering of urban 
governance 
• Clear division of the roles and responsibilities of various authorities, appropriate revision of rules 
and regulations, etc. 
• Creation of a more dynamic organizational structure, standardization of the job descriptions of 
town planners and other experts.  
• Extensive adoption of technology for enabling public participation and inter-agency coordination. 
Focusing on Human 
Resource Development 
and Capacity Building  
• To combat the shortage of qualified urban planners in the public sector, states/UTs may need to- 
o expedite the filling up of vacant positions of town planners. 
o sanction additional town planners’ posts as lateral entry positions. 
o undertake requisite amendments in their recruitment rules to ensure the entry of qualified 
candidates into town-planning positions. 
o Undertake regular capacity building of their town planning staff. National Urban Learning 
Platform, operationalized by MoHUA, can be leveraged for this purpose. 
Revision of Town and 
Country Planning Acts 
• Formation of an apex committee at the state level to undertake a regular review of planning 
legislations (including town and country planning or urban and regional development acts or 
other relevant acts). 
Demystifying Planning 
and Involving Citizens 
• Conducting ‘Citizen Outreach Campaign’ with strategies like- 
o Publishing Master plans/regional plans on the National Urban Innovation Stack of MoHUA 
and on the websites of respective city governments. 
o Advertising Opportunities for participation by citizens. 
Building Local Urban 
Leadership 
• Design and organisation of ‘Short-Term Training Programme for City-Level Elected Officials on 
Economic and Social Benefits of Urban Planning’. 
Steps for Enhancing the 
Role of Private Sector 
• Adoption of fair processes for procuring technical consultancy services. 
• Strengthening project structuring and management skills in the public sector. 
• Empanelment of private sector consultancies. 
Steps for Strengthening 
Urban Planning 
Education System 
• Establish a ‘Department of Planning’ in Each Central University. 
• Encourage Programmes on ‘Rural Area Planning’. 
• Inclusion of ‘Planning’ As a Discipline in National Institute Ranking Framework (NIRF) etc. 
Measures for 
Strengthening Human 
Resource and Match 
Demand–Supply 
• Constitution of a ‘National Council of Town and Country Planners’ as a statutory body of the 
Government of India and a ‘National Digital Platform of Town and Country Planners’ to enable 
self-registration of all planners. 
3.2. AGRICULTURAL INDEBTEDNESS IN INDIA 
Why in News? 
The average outstanding loan per agricultural household increased 57.7 per cent from 2013 to 2018, according to the 
latest findings of a ‘Situation Assessment of Agricultural Households and Land Holdings of Households in Rural India, 
2019’ survey by the National Statistical Office. 
Page 4


 
24                                                                                                                                                                       
3. ECONOMY 
3.1. URBAN PLANNING IN INDIA 
Why in news? 
NITI Aayog recently launched a report titled ‘Reforms in Urban Planning Capacity in India’ on measures to ramp up 
urban planning capacity in India.  
Overview of Urbanization in India 
• Population: India’s urban population stands at around 377 
million (Census of India, 2011). 
o During 2011–36, urban growth will be responsible for 
73% of the rise in total population (MoHFW, 2019). 
Earlier estimations indicate that India will be 50% 
urban by 2050 (UN-Habitat, 2017).  
• Economic contribution: Urbanization contributes nearly 
60% to India’s Gross Domestic Product (GDP). 
• Geographical share: Urban land in India is 3.1% of the 
total land area of the country. 
• Classification of Urban agglomerations: 
o Statutory Towns: Settlements that are notified under 
law by the concerned State/UT government and with 
local bodies such as municipal corporations, municipalities, municipal committees, etc.  
o Census Towns: Settlements that are classified as urban in the census after they have met a set of criteria like at least 
75% of the male ‘main workers’ engaged in non-agricultural pursuits etc. These are governed as villages and do not 
necessarily have urban local bodies.  
o Outgrowths: These are viable units, such as a village, clearly identifiable in terms of their boundaries and locations. 
Outgrowths possess urban features in terms of infrastructure and amenities, such as pucca roads, electricity, etc., and 
are physically contiguous with the core town of the urban agglomeration.  
Need for reforms in Planned Urban development 
• Accelerated growth in Urban population: This will bring 
immense stress on the infrastructure of many Indian cities 
and towns which along with unregulatable development may 
be detrimental to the society, economy, and environment. 
o Further, Covid-19 revealed the dire need for planning and 
management of our cities, with an emphasis on the 
health of citizens. 
• Significance of Urbanization for India’s economy: Effective 
interventions incorporating urban and spatial planning, urban 
land markets, and governance are needed to tap unutilised 
potential of economies of scale presented by Urban centres 
of India.  
• Fulfilling India’s global commitments: Cities play a decisive 
role in achieving India’s commitments to the global agendas, 
such as Sustainable Development Goals (SDGs) 2030; United 
Nation Habitat’s New Urban Agenda; and the Paris Climate 
Agreement.    
• Achieving India’s national growth targets: Strategic spatial 
planning will be instrumental in attaining India’s growth 
targets, such as: USD 5 trillion economy by 2024; creation of 11 large industrial corridors as part of the National 
Industrial Corridor Programme etc. 
 
25                                                                                                                                                                       
• Infrastructure development: The urban sector has a significant share (17%) in the National Infrastructure Pipeline 
(NIP) for FY 2020–25 to facilitate infrastructure projects in the country. 
• Ensuring Multi-sectoral Convergence: Stronger urban planning ecosystem in the country is needed to converge 
unlinked sectoral schemes that are executed by different government departments. 
o For instance, Smart Cities Mission of Ministry of Housing and Urban Affairs and National Mission on Electric 
Mobility of Ministry of Heavy Industries can gain significantly from coordination. 
• Interstate disparities: While certain States such as Goa, Tamil Nadu, Kerala, Maharashtra, and Gujarat have attained 
over 40% urbanization, other States such as Bihar, Odisha, Assam, and Uttar Pradesh continue to be at a lower level 
of urbanization than the national average of 31.1%. 
• Multidimensional issues emanating from unplanned development: Issues like slums, traffic congestion, pressure 
on basic infrastructure, sub-optimal utilization of urban land, extreme air pollution, urban flooding, water scarcity 
and droughts indicate a deep and substantial lack of adequate urban planning and governance frameworks. 
Key Challenges to urban-planning capacity of India 
• Lack of institutional clarity: Multiplicity of authorities dealing with planning of land and sectors like water, 
sewerage, solid waste etc. at the city as well as State level often creates ambiguity, overlaps and even discord over 
division of functions and responsibilities.  
• Absence of effective decentralisation: This can be highlighted by issues such as- 
o Most of the ULBs have not been allocated the ‘urban planning’ function.  
o MPCs and DPCs are not functional in most of the States and in a few States, they are not even constituted yet. 
• Absence of participative decision making: States have created parastatals like metropolitan development 
authorities, urban development authorities, etc., to serve the functions which should have been accorded to ULBs. 
These bodies are not directly answerable to the citizens. 
• Functional issues in municipal governance bodies:  
o In most Indian cities, the mayor is endowed with limited executive responsibilities. 
o Many States have a skeletal machinery of planning which are not necessarily headed by qualified urban 
planners. 
• Non-Recognition of ‘Urban’ Areas: Around 8000 towns are counted as urban for population estimation under the 
Census of India (2011); however, half of them, known as census towns, are still administratively ‘rural’. Also, 
parameters that define ‘urban’ in context of India are outdated. 
• Lack of Planning of Cities and Regions: Presently, about 52% of the statutory towns and 76% of the census towns 
do not have any Master Plans to guide their spatial growth and infrastructural investments. 
• Other issues- 
o Lack of adequate and technically qualified planners in public sector. 
o Low participation of private sector in Urban planning. 
Steps taken in India for urban development and planning   
• Constitution (Seventy-Fourth Amendment) Act 1992: It gave a thrust to decentralization and mandated the setting up of 
Urban local bodies (ULBs) in urban areas.  
o It also provided for setting up of Metropolitan Planning Committees (MPCs) and District Planning Committees (DPCs) 
with responsibility of preparing ‘draft development plan’ on matters of common interest between the panchayats and 
the municipalities. 
• Model Building Bye Laws 2016 are legal tools to ensure orderly development of an area.  
• Schemes: The government introduced Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation 
(AMRUT) for planned and integrated urban management. Pradhan Mantri Awas Yojana (Urban) and Swachh Bharat 
Mission – Urban were introduced to ensure housing for all and clean urban environment respectively.   
• The Ease of Living Index (EoLI): published by the Ministry of Housing and Urban Affairs (MoHUA) promotes competitive 
spirit among the states to ensure sustainable urbanization.  
• The 15
th
 Finance Commission has recommended a performance-based challenge fund of ? 8,000 crore to States for 
incubation of new cities. The amount available for each proposed new city is ? 1,000 crore and a State can have only one 
new city under the proposed scheme.  
 
26                                                                                                                                                                       
o Lack of Specialised Professionals in the specific areas like rural area planning, coastal area planning, industrial 
area planning and hill area planning. 
o Limited Awareness about Urban Planning and its associated socio-economic benefits among administrators or 
elected officials.  
Way Forward: Recommendations of the Report 
Planning of healthy 
cities 
• A central sector scheme, ‘500 Healthy Cities Programme’, for a period of 5 years where in priority 
cities will be selected jointly by state and local bodies. 
Interventions and 
advancements in 
existing approaches of 
master plan preparation 
• Assessment of the needs and aspirations of citizens. 
• Development and inclusion of specific proposals with clear responsibilities of the agencies 
concerned and a financial implementation plan in the master plan report. 
• Preparation of an interoperable base map of the city on GIS platform 
• Mapping of all the relevant sub-sectors of a city.  
Optimum utilization of 
urban land 
• A sub-scheme ‘Preparation/Revision of Development Control Regulations’ for optimum 
utilization of urban land based on scientific evidence to maximize the efficiency of urban land of 
the cities under the ‘Healthy City Programme’. 
Re-engineering of urban 
governance 
• Clear division of the roles and responsibilities of various authorities, appropriate revision of rules 
and regulations, etc. 
• Creation of a more dynamic organizational structure, standardization of the job descriptions of 
town planners and other experts.  
• Extensive adoption of technology for enabling public participation and inter-agency coordination. 
Focusing on Human 
Resource Development 
and Capacity Building  
• To combat the shortage of qualified urban planners in the public sector, states/UTs may need to- 
o expedite the filling up of vacant positions of town planners. 
o sanction additional town planners’ posts as lateral entry positions. 
o undertake requisite amendments in their recruitment rules to ensure the entry of qualified 
candidates into town-planning positions. 
o Undertake regular capacity building of their town planning staff. National Urban Learning 
Platform, operationalized by MoHUA, can be leveraged for this purpose. 
Revision of Town and 
Country Planning Acts 
• Formation of an apex committee at the state level to undertake a regular review of planning 
legislations (including town and country planning or urban and regional development acts or 
other relevant acts). 
Demystifying Planning 
and Involving Citizens 
• Conducting ‘Citizen Outreach Campaign’ with strategies like- 
o Publishing Master plans/regional plans on the National Urban Innovation Stack of MoHUA 
and on the websites of respective city governments. 
o Advertising Opportunities for participation by citizens. 
Building Local Urban 
Leadership 
• Design and organisation of ‘Short-Term Training Programme for City-Level Elected Officials on 
Economic and Social Benefits of Urban Planning’. 
Steps for Enhancing the 
Role of Private Sector 
• Adoption of fair processes for procuring technical consultancy services. 
• Strengthening project structuring and management skills in the public sector. 
• Empanelment of private sector consultancies. 
Steps for Strengthening 
Urban Planning 
Education System 
• Establish a ‘Department of Planning’ in Each Central University. 
• Encourage Programmes on ‘Rural Area Planning’. 
• Inclusion of ‘Planning’ As a Discipline in National Institute Ranking Framework (NIRF) etc. 
Measures for 
Strengthening Human 
Resource and Match 
Demand–Supply 
• Constitution of a ‘National Council of Town and Country Planners’ as a statutory body of the 
Government of India and a ‘National Digital Platform of Town and Country Planners’ to enable 
self-registration of all planners. 
3.2. AGRICULTURAL INDEBTEDNESS IN INDIA 
Why in News? 
The average outstanding loan per agricultural household increased 57.7 per cent from 2013 to 2018, according to the 
latest findings of a ‘Situation Assessment of Agricultural Households and Land Holdings of Households in Rural India, 
2019’ survey by the National Statistical Office. 
 
27                                                                                                                                                                       
Key findings of the report 
• Average income of agricultural households and farm incomes have 
increased (see graph).  
• Andhra Pradesh to have the highest average outstanding loan, at Rs 2.45 
lakh. The state also had the highest proportion (93.2 per cent) of 
agricultural households under debt, followed by Telangana (91.7 per cent) 
and Kerala (69.9 per cent). 
 
 
Reasons for rising indebtedness 
Indebtedness can be described as impoverishment by debt or as a situation where a household is caught in spiral debts. 
Following factors can be held responsible for rising indebtedness in agricultural households- 
• Increasing access to institutional finance due to Government efforts: Ground level credit (GLC) to agriculture has 
nearly doubled (from Rs.7.30 lakh crore to Rs.13.92 lakh crore) during the period 2013–14 to 2019–20. 
• Inadequate growth in farm productivity and income: This can be attributed to factors like- 
o Rising cost of cultivation: The loans are used to invest in farm mechanization (almost 95 per cent tractors are 
taken on loans) and acquire modern inputs like seeds, fertilizers, insecticides, pesticides etc. 
o Climate change affects weather and rain patterns leading to decline in agricultural productivity. 
o Price volatility and poor agricultural marketing practices and value addition. 
o Subsistence farming of small landholdings makes it impossible to meet the needs required for their living.  
• Poor risk mitigation mechanism: Crop Insurance uptake is still low in India due to lack of awareness and delays in 
claim payments.  
• High cost of informal loans: The small and marginal farmers, tenants and agricultural labourers still heavily depend 
upon informal sources of finance to meet their credit needs and pay very high rates of interest, which pushes them 
into debt cycle. 
• Ancestral/Inherited Debt: Rural people incur debts for non-productive purposes such as to meet the family needs, 
perform social functions (related to marriages, birth, death), etc. This debt burden traps farmers into an 
intergenerational debt cycle which becomes harder to break due to uncertainty of farm income. 
• Farm loan waivers: With more agriculture loans being waived-off, it is easier for farmers to take loans without the 
fear of repaying the amount if there is a loss. 
• Litigation: Agriculturists in India are involved in various kinds of disputes related to land, property, etc., which 
involve heavy expenditure and time. 
 
Page 5


 
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3. ECONOMY 
3.1. URBAN PLANNING IN INDIA 
Why in news? 
NITI Aayog recently launched a report titled ‘Reforms in Urban Planning Capacity in India’ on measures to ramp up 
urban planning capacity in India.  
Overview of Urbanization in India 
• Population: India’s urban population stands at around 377 
million (Census of India, 2011). 
o During 2011–36, urban growth will be responsible for 
73% of the rise in total population (MoHFW, 2019). 
Earlier estimations indicate that India will be 50% 
urban by 2050 (UN-Habitat, 2017).  
• Economic contribution: Urbanization contributes nearly 
60% to India’s Gross Domestic Product (GDP). 
• Geographical share: Urban land in India is 3.1% of the 
total land area of the country. 
• Classification of Urban agglomerations: 
o Statutory Towns: Settlements that are notified under 
law by the concerned State/UT government and with 
local bodies such as municipal corporations, municipalities, municipal committees, etc.  
o Census Towns: Settlements that are classified as urban in the census after they have met a set of criteria like at least 
75% of the male ‘main workers’ engaged in non-agricultural pursuits etc. These are governed as villages and do not 
necessarily have urban local bodies.  
o Outgrowths: These are viable units, such as a village, clearly identifiable in terms of their boundaries and locations. 
Outgrowths possess urban features in terms of infrastructure and amenities, such as pucca roads, electricity, etc., and 
are physically contiguous with the core town of the urban agglomeration.  
Need for reforms in Planned Urban development 
• Accelerated growth in Urban population: This will bring 
immense stress on the infrastructure of many Indian cities 
and towns which along with unregulatable development may 
be detrimental to the society, economy, and environment. 
o Further, Covid-19 revealed the dire need for planning and 
management of our cities, with an emphasis on the 
health of citizens. 
• Significance of Urbanization for India’s economy: Effective 
interventions incorporating urban and spatial planning, urban 
land markets, and governance are needed to tap unutilised 
potential of economies of scale presented by Urban centres 
of India.  
• Fulfilling India’s global commitments: Cities play a decisive 
role in achieving India’s commitments to the global agendas, 
such as Sustainable Development Goals (SDGs) 2030; United 
Nation Habitat’s New Urban Agenda; and the Paris Climate 
Agreement.    
• Achieving India’s national growth targets: Strategic spatial 
planning will be instrumental in attaining India’s growth 
targets, such as: USD 5 trillion economy by 2024; creation of 11 large industrial corridors as part of the National 
Industrial Corridor Programme etc. 
 
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• Infrastructure development: The urban sector has a significant share (17%) in the National Infrastructure Pipeline 
(NIP) for FY 2020–25 to facilitate infrastructure projects in the country. 
• Ensuring Multi-sectoral Convergence: Stronger urban planning ecosystem in the country is needed to converge 
unlinked sectoral schemes that are executed by different government departments. 
o For instance, Smart Cities Mission of Ministry of Housing and Urban Affairs and National Mission on Electric 
Mobility of Ministry of Heavy Industries can gain significantly from coordination. 
• Interstate disparities: While certain States such as Goa, Tamil Nadu, Kerala, Maharashtra, and Gujarat have attained 
over 40% urbanization, other States such as Bihar, Odisha, Assam, and Uttar Pradesh continue to be at a lower level 
of urbanization than the national average of 31.1%. 
• Multidimensional issues emanating from unplanned development: Issues like slums, traffic congestion, pressure 
on basic infrastructure, sub-optimal utilization of urban land, extreme air pollution, urban flooding, water scarcity 
and droughts indicate a deep and substantial lack of adequate urban planning and governance frameworks. 
Key Challenges to urban-planning capacity of India 
• Lack of institutional clarity: Multiplicity of authorities dealing with planning of land and sectors like water, 
sewerage, solid waste etc. at the city as well as State level often creates ambiguity, overlaps and even discord over 
division of functions and responsibilities.  
• Absence of effective decentralisation: This can be highlighted by issues such as- 
o Most of the ULBs have not been allocated the ‘urban planning’ function.  
o MPCs and DPCs are not functional in most of the States and in a few States, they are not even constituted yet. 
• Absence of participative decision making: States have created parastatals like metropolitan development 
authorities, urban development authorities, etc., to serve the functions which should have been accorded to ULBs. 
These bodies are not directly answerable to the citizens. 
• Functional issues in municipal governance bodies:  
o In most Indian cities, the mayor is endowed with limited executive responsibilities. 
o Many States have a skeletal machinery of planning which are not necessarily headed by qualified urban 
planners. 
• Non-Recognition of ‘Urban’ Areas: Around 8000 towns are counted as urban for population estimation under the 
Census of India (2011); however, half of them, known as census towns, are still administratively ‘rural’. Also, 
parameters that define ‘urban’ in context of India are outdated. 
• Lack of Planning of Cities and Regions: Presently, about 52% of the statutory towns and 76% of the census towns 
do not have any Master Plans to guide their spatial growth and infrastructural investments. 
• Other issues- 
o Lack of adequate and technically qualified planners in public sector. 
o Low participation of private sector in Urban planning. 
Steps taken in India for urban development and planning   
• Constitution (Seventy-Fourth Amendment) Act 1992: It gave a thrust to decentralization and mandated the setting up of 
Urban local bodies (ULBs) in urban areas.  
o It also provided for setting up of Metropolitan Planning Committees (MPCs) and District Planning Committees (DPCs) 
with responsibility of preparing ‘draft development plan’ on matters of common interest between the panchayats and 
the municipalities. 
• Model Building Bye Laws 2016 are legal tools to ensure orderly development of an area.  
• Schemes: The government introduced Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation 
(AMRUT) for planned and integrated urban management. Pradhan Mantri Awas Yojana (Urban) and Swachh Bharat 
Mission – Urban were introduced to ensure housing for all and clean urban environment respectively.   
• The Ease of Living Index (EoLI): published by the Ministry of Housing and Urban Affairs (MoHUA) promotes competitive 
spirit among the states to ensure sustainable urbanization.  
• The 15
th
 Finance Commission has recommended a performance-based challenge fund of ? 8,000 crore to States for 
incubation of new cities. The amount available for each proposed new city is ? 1,000 crore and a State can have only one 
new city under the proposed scheme.  
 
26                                                                                                                                                                       
o Lack of Specialised Professionals in the specific areas like rural area planning, coastal area planning, industrial 
area planning and hill area planning. 
o Limited Awareness about Urban Planning and its associated socio-economic benefits among administrators or 
elected officials.  
Way Forward: Recommendations of the Report 
Planning of healthy 
cities 
• A central sector scheme, ‘500 Healthy Cities Programme’, for a period of 5 years where in priority 
cities will be selected jointly by state and local bodies. 
Interventions and 
advancements in 
existing approaches of 
master plan preparation 
• Assessment of the needs and aspirations of citizens. 
• Development and inclusion of specific proposals with clear responsibilities of the agencies 
concerned and a financial implementation plan in the master plan report. 
• Preparation of an interoperable base map of the city on GIS platform 
• Mapping of all the relevant sub-sectors of a city.  
Optimum utilization of 
urban land 
• A sub-scheme ‘Preparation/Revision of Development Control Regulations’ for optimum 
utilization of urban land based on scientific evidence to maximize the efficiency of urban land of 
the cities under the ‘Healthy City Programme’. 
Re-engineering of urban 
governance 
• Clear division of the roles and responsibilities of various authorities, appropriate revision of rules 
and regulations, etc. 
• Creation of a more dynamic organizational structure, standardization of the job descriptions of 
town planners and other experts.  
• Extensive adoption of technology for enabling public participation and inter-agency coordination. 
Focusing on Human 
Resource Development 
and Capacity Building  
• To combat the shortage of qualified urban planners in the public sector, states/UTs may need to- 
o expedite the filling up of vacant positions of town planners. 
o sanction additional town planners’ posts as lateral entry positions. 
o undertake requisite amendments in their recruitment rules to ensure the entry of qualified 
candidates into town-planning positions. 
o Undertake regular capacity building of their town planning staff. National Urban Learning 
Platform, operationalized by MoHUA, can be leveraged for this purpose. 
Revision of Town and 
Country Planning Acts 
• Formation of an apex committee at the state level to undertake a regular review of planning 
legislations (including town and country planning or urban and regional development acts or 
other relevant acts). 
Demystifying Planning 
and Involving Citizens 
• Conducting ‘Citizen Outreach Campaign’ with strategies like- 
o Publishing Master plans/regional plans on the National Urban Innovation Stack of MoHUA 
and on the websites of respective city governments. 
o Advertising Opportunities for participation by citizens. 
Building Local Urban 
Leadership 
• Design and organisation of ‘Short-Term Training Programme for City-Level Elected Officials on 
Economic and Social Benefits of Urban Planning’. 
Steps for Enhancing the 
Role of Private Sector 
• Adoption of fair processes for procuring technical consultancy services. 
• Strengthening project structuring and management skills in the public sector. 
• Empanelment of private sector consultancies. 
Steps for Strengthening 
Urban Planning 
Education System 
• Establish a ‘Department of Planning’ in Each Central University. 
• Encourage Programmes on ‘Rural Area Planning’. 
• Inclusion of ‘Planning’ As a Discipline in National Institute Ranking Framework (NIRF) etc. 
Measures for 
Strengthening Human 
Resource and Match 
Demand–Supply 
• Constitution of a ‘National Council of Town and Country Planners’ as a statutory body of the 
Government of India and a ‘National Digital Platform of Town and Country Planners’ to enable 
self-registration of all planners. 
3.2. AGRICULTURAL INDEBTEDNESS IN INDIA 
Why in News? 
The average outstanding loan per agricultural household increased 57.7 per cent from 2013 to 2018, according to the 
latest findings of a ‘Situation Assessment of Agricultural Households and Land Holdings of Households in Rural India, 
2019’ survey by the National Statistical Office. 
 
27                                                                                                                                                                       
Key findings of the report 
• Average income of agricultural households and farm incomes have 
increased (see graph).  
• Andhra Pradesh to have the highest average outstanding loan, at Rs 2.45 
lakh. The state also had the highest proportion (93.2 per cent) of 
agricultural households under debt, followed by Telangana (91.7 per cent) 
and Kerala (69.9 per cent). 
 
 
Reasons for rising indebtedness 
Indebtedness can be described as impoverishment by debt or as a situation where a household is caught in spiral debts. 
Following factors can be held responsible for rising indebtedness in agricultural households- 
• Increasing access to institutional finance due to Government efforts: Ground level credit (GLC) to agriculture has 
nearly doubled (from Rs.7.30 lakh crore to Rs.13.92 lakh crore) during the period 2013–14 to 2019–20. 
• Inadequate growth in farm productivity and income: This can be attributed to factors like- 
o Rising cost of cultivation: The loans are used to invest in farm mechanization (almost 95 per cent tractors are 
taken on loans) and acquire modern inputs like seeds, fertilizers, insecticides, pesticides etc. 
o Climate change affects weather and rain patterns leading to decline in agricultural productivity. 
o Price volatility and poor agricultural marketing practices and value addition. 
o Subsistence farming of small landholdings makes it impossible to meet the needs required for their living.  
• Poor risk mitigation mechanism: Crop Insurance uptake is still low in India due to lack of awareness and delays in 
claim payments.  
• High cost of informal loans: The small and marginal farmers, tenants and agricultural labourers still heavily depend 
upon informal sources of finance to meet their credit needs and pay very high rates of interest, which pushes them 
into debt cycle. 
• Ancestral/Inherited Debt: Rural people incur debts for non-productive purposes such as to meet the family needs, 
perform social functions (related to marriages, birth, death), etc. This debt burden traps farmers into an 
intergenerational debt cycle which becomes harder to break due to uncertainty of farm income. 
• Farm loan waivers: With more agriculture loans being waived-off, it is easier for farmers to take loans without the 
fear of repaying the amount if there is a loss. 
• Litigation: Agriculturists in India are involved in various kinds of disputes related to land, property, etc., which 
involve heavy expenditure and time. 
 
 
28                                                                                                                                                                       
Impacts of indebtedness 
While sustainable debt incurred to buy farm machinery or to invest in crop diversification can boost future income and 
enhance agriculture productivity, unsustainable debt can lead to issues such as- 
• Reduced investment in modernisation of agriculture. 
• Distress selling to fulfil debt obligations. 
• Marginalization of farming community and in extreme cases farmer suicides. 
• Enhanced rural poverty and impact on overall socioeconomic growth in agricultural households in terms of 
educational and health outcomes. 
• Indebtedness inhibits the provision of new loans and creates pressure on the banking system due to increased 
possibility of default.  
• Loss of property rights to money lenders can turn famers into landless labourers which limits their ability to take 
farming decisions. 
• Mounting debt exacerbates the unviability of agriculture as an economic activity, threatening food security and 
pushing farmers into a seemingly 
endless spiral of debt. 
Way Forward 
To resolve the issue of rising debt, a 
holistic approach is needed that focuses 
on- 
• Enhancing agricultural productivity 
and farmers income by initiating 
programmes that focus on teaching 
farm-related technologies to the 
farmers and promote climate 
suitable and high value agriculture. 
• Risk mitigation by raising 
awareness about crop insurance 
schemes. 
• Enhance accessibility of 
institutional credit facilities, 
especially for small and marginal 
farmers through steps such as setting-up mobile branches of banks in rural areas, reducing the transaction costs, 
computerisation of lands records etc. 
• Establishing Financial Literacy and credit Counselling Centres (FLCCs): Training can be provided to banks SHG 
federations, agri clinics and other similar institutions to educate farmers about sustainable debt practices. 
• Setting up of a "Money Lenders Debt Redemption Fund" as a one-time measure for providing long-term loans by 
banks to farmers to enable them to repay their debts to the moneylenders. Local Civil Society Organisations, NGOs 
or Panchayati Raj Institutions could be involved in arriving at negotiated settlements with the moneylenders. 
3.3. AGREEMENT ON AGRICULTURE 
Why in News? 
Recently, Minister of Commerce & Industry stated that World Trade Organization (WTO) Agreement on Agriculture is 
tilted against developing countries. 
About Agreement on Agriculture (AoA) 
• AoA concluded by WTO members came into force in 1995.  
• It provides a framework for the long-term reform of agricultural trade and domestic policies, with the aim of 
leading to fairer competition and a less distorted sector.