Urbanization: Problems and Remedies

Market-based funding will optimise infrastructure investments while simultaneously empowering local administration.

• Infrastructure constraints do limit the benefits of agglomeration that bigger cities provide.
• However, this can be avoided if there are mid-sized urban agglomerations to take the pressure off megacities.
• More efficient public-transportation networks and work-from-home policies are instances which can further improve the productivity of bigger cities by reducing commuting time and air-pollution levels.
• As India transitions to accommodate almost half of its populace in urban clusters, its cities need a big developmental push.

Municipal Bonds

• Development requires financing. Given the current situation, municipal bonds can be an option.
• In India only INR3,300 crore has been raised so far using this instrument.
• In developed countries, such instruments are popular financing tools