Management of urban infrastructure, especially water, will become a challenge with more and more people shifting to cities, Finance Minister Arun Jaitley said today.
The minister further said rapid urbanisation India is experiencing will make it a nerve-centre of growth.
“Today, we have 31 per cent of population in urban areas and over the next two decades, I think the figure is going to substantially increase,” he said while addressing ADB-Asian Think Tank Development Forum-2016 here.
“And when this figure substantially increases over the next two decades, we will see urban India really becoming a nerve-centre or hub of growth… I see that over next two decades, India will have to go for rapid urbanisation.”
About elements of urban infrastructure, he said power supply will increase considering growth in the sector and there is substantial improvement in roads.
However, Jaitley said, water will always remain a big challenge because management of the scarce resource is the key.
According to him, the process of urbanisation is partly happening with emergence of satellite towns, sub-urbanisation and creation of new cities around important metropolitan centres.
Citing examples of Delhi and Mumbai, Jaitley said key urban centres in states act as engines of growth.
As for the global economy, he felt that it has seen a far more serious challenge in the last few years.
“I ask myself the question did anyone in the meeting have an idea how long this will last and what is really the way out… people have spoken in generalities saying we must use all tools, monetary or fiscal, structural changes. But when these generics are converted into specifics, I find there is lack of ideas,” he said.
Of course, the situation in Asia is not as pessimistic as in the rest of the world, he maintained.
“The good reason for this is there is a lot of growth potential that Asia has and that’s why decisively Asian potential growth rate is much higher than the global growth rate itself,” Jaitley remarked.