Budget 2015: Tap urban infra to revive economy; it's a Rs 7 lakh cr opportunity

As the budget gets closer, the cacophony of demands and expectations is getting louder and Arun Jaitley will have to walk tight rope in order to manage the soaring expectations.

The winds are favourable as the falling oil prices have given him a cushion for the fiscal deficit, every $10 fall in the oil prices shaves off the fiscal deficit by 0.5 percent. With the fiscal deficit under control what will Jaitley unleash? Will he spend more on social schemes or resort to corporate giveaways or next gen reforms?

Newspapers will be searching for headlines on the next generation reforms but unfortunately nobody defines the nebulous reforms. The consultants pick at smaller pieces like tax payment or quantum, teeny weeny tinkering designed to appease their corporate clients. The national think-tanks also rarely voice their concerns beyond platitudes. Critics who pounce upon the FM after the budget wearing various shades of lipsticks also do not have a vision.

It is left to mandarins and the motely group of advisors around FM to think up moves that will fire up the imagination of the nation.

If the finance minister understood the underlying current in the BJP’s loss in Delhi he would see the expectation urban India has from the government. The larger demand of jobs and aspirations remaining there is a need to improve the basic amenities in cities.

This is a make or break for the government and the 100 cities plan is not doing anything to resolve it. The National Urban Renewal Mission needs to be revived and the finance minister needs to allocate funds for the same. Metro-based commentators cannot see the hundred of cities that are collapsing across the country. They can see the mess they are living in but cannot see the urban fate of millions of others across the country.

The demand from the urban dwellers is much higher than the vociferous corporates and it would be a hara-kiri if the government does not recognize. Cities are recognised as economic engines but as there is nobody to advocate their cause during the budget time their needs fall through the cracks.

Therefore, allocation of adequate funds much larger than the last NURM will surely fire up the dormant economic engine. The biggest infrastructure is not the roads and highways but city-based infrastructure that is a Rs 7,00,000 crore opportunity.

Companies globally are watching the direction India will move on this front and will they be able to actualise it. Very rarely does a finance minister get opportunity to create an industry through a policy announcement. And Jaitley is getting one in the urban infrastructure space.

The thumb rule says that every $1 invested in public transportation in a city ends up generating $4 of GDP for the city. This is just for public transportation. A similar and higher multiple works for other amenities required in a city.

K Yatish Rajawat is a senior journalist and policy commentator based in Delhi he tweets @yatishrajawat