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THEME PAPER
job opportunities. Further, perpetual state of fiscal crisis Figure 2: Population Projection
housing affordability and due to the stalled devolution for India and China and Rural-
emerging inequality have of power from the state to Urban Aspect, 1990-2050
arisen as serious problems in municipal governments (Ren,
all large cities of China. 2015). India has approved
Special Purpose Vehicles
Urbanization in India and (SPVs) to fund infrastructural
China: A Comparative projects and to manage smart
Analysis cities, however, its efficacy to
bring investment using land
As per a McKinsey Report
(2020), India spends $17 per as a tool has been limited as
capita on capital investments compared to China.
in urban infrastructure The inner-city area is often
annually, while China spends dilapidated. While China is
$116. A significant proportion substantially improving, in
of the disparities in the urban India this remains a significant
transformation between issue. However, governance
the two countries can be and planning roadblocks
attributed to the discrepancies for informal settlements
in land use, housing, and are now being slowly
transportation. addressed through various
levers, such as taxation and
The main mode in obtaining registration. Many such
funds for infrastructure from advanced measures point to
banks in China is through a maturing housing market,
Urban Development and with different dimensions more than 170 million urban
Investment Companies in different cities, from workers to its labour force
(UDICs), subsidiaries of property rights to regulation from 2005 to 2025, compared
local governments. The to management to financing. with 50 million in China over
practice involves selling Sustainable consumption the same period (McKinsey,
land for development to using local resources and 2020).
supplement the limited local spatial planning is another
governments’ revenues and important component, URBAN HOUSING
pay for investment in the especially in the SDGs era CONTINUUM
provision of local services. to ensure intergenerational AND HOUSEHOLD
Thus, municipal debt has equity. AMENITIES: INDIA
increased sharply since 2008 AND CHINA
owing to the binge borrowing India has the potential to reap
and overinvestment in the benefits of demographic In India, rapid migration
infrastructure. The objective dividend, which if realised and unplanned urbanization
of the same was to minimise will be larger than that of has led to a proliferation in
the effects of the global China owing to the latter’s informal settlements and
financial crisis by stimulating aging population. If India slums, with people living in
the Chinese economy. optimises the productivity of unsanitary and congested
its cities and maximises its conditions. With an evidenced
In India, cities have been in a GDP, the economy could add shortage of housing,
6 HUDCO-HSMI Publication
