Avishi Saini & Aryaman Setia
Punjab is experiencing a shift from an agrarian society to more of an urban-based society. According to the 2011 census, about 37.49% of Punjab’s population (10.39 million people) lived in urban areas of a total population of 27.70 million. This trend continued with the urban population rising to 38.2% between 2011 and 2015. Projections indicate that urbanization will accelerate even further, with an estimated 45.5% of Punjab’s population residing in urban areas between 2031 and 2035. This shift offers exciting opportunities for growth but also brings significant challenges.
Scholars have provided a series of reasons for rapid urbanization in Punjab, including a shift towards modernization and a general shift away from agricultural mode of livelihoods. Mahey and Tripathi (2016) give intriguing statistics in support. The share of agriculture in total GDP in Punjab was 48% in 1950-51 and has reduced to 19% in 2014-15. On the other hand, the percentage share of urbanization in Punjab has increased from 28% in 1981 to 38 % in 2011. Clearly, establishing and studying whether a correlation amongst these variables exists might provide more insights. Furthermore, the state is now slowly emerging as the hub of IT (Information Technology) and BPO (Business Process Outsourcing) industries. This has led to more people moving from rural areas to the cities.
Singh and Singh (2014) explain that the New Economic Policy of 1991 played a major role in this transition as it encouraged people to move to cities for better opportunities. Many were attracted by improved infrastructure, education, and job prospects. However, this rapid urban growth has also put pressure on urban housing and infrastructure. This highlights the need of planning the cities well and introducing better policies to support the rising urban population.
Urban Housing Challenges
Kumar and Kaur (2018) observe that urban housing in Punjab faces several critical challenges, including inadequate infrastructure such as transportation, sanitation, and waste management. Additionally, a high concentration of substandard housing has led to overcrowding, unsanitary conditions, and a lack of basic amenities. The Economically Weaker Section (EWS) and Low-Income Group (LIG) segments face significant hurdles like low purchasing power, an inflexible housing finance system, and an institutional framework that fails to provide adequate support. The Report of the Technical Group on Urban Housing Shortage (2012-17) estimated a housing shortage of 0.39 million dwelling units. This highlights the severity of the crisis. In 2016, the Punjab Urban Development Authority (PUDA) was tasked with utilizing funds under the Housing for All scheme; however, its failure to develop an effective affordable housing plan resulted in a loss of ₹80 crore in grants. This administrative inefficiency has exacerbated the housing shortage. These challenges contribute to rising urban poverty and increased socio-economic disparities. Consequently, the gap between supply and demand of adequate and affordable houses has increased considerably in the State, hence highlighting the need for policy intervention. Three particular challenges pertaining to adequate and affordable urban housing in the form of slum dwellings, real estate markets acting as safe havens and lapses in policy framework have been highlighted below.
It is important to highlight that 17% of all urban households in India reside in slums. The situation is worse in cities like Greater Mumbai, Chennai and Kolkata, where 41%, 29% and 30% of households live in slums respectively. In Punjab, 5.3% of its total population are urban slum dwellers. Of these, 1.46 million people (14.01% of the urban population) face housing shortages, contributing to 2.23% of India’s total slum population. This highlights the need for targeted urban development policies to address housing shortages and uplift the living conditions of people in Punjab, and all over the country.
Furthermore, real estate often serves as a safe place for unaccounted wealth due to its tangible nature. This has come out to be true for Punjab. Gupta and George (2023) discuss that such investments distort the markets and make it even harder for the middle- and low-income groups to find affordable housing in urban areas. The correlation, well-established, between the shadow economy and high price-to-income ratios highlights this problem. These factors collectively highlight the need for better urban planning and affordable housing policies to address urban housing challenges in Punjab.
Current policy measures present predicaments as well. The Department of Housing and Urban Development, Punjab had failed to frame a comprehensive Housing and Habitat Policy till 2008. It was revised in 2016 and renamed as Affordable Housing Policy 2016. As such urban development and housing activities were being performed on a piecemeal basis by different agencies resulting in agencies such as High Powered Board and Metropolitan Committees having overlapping powers and jurisdiction thus, causing confusion, in-house fighting, and often lead to bribery.
Furthermore, urban housing and development can be seen entangled in legal disputes. From 2014 to 2024, the Punjab and Haryana Court dealt with approximately 82 matters dealing with illegal construction and demolition pertaining to the State of Punjab. The High Court also dealt with 23 cases that involved disputes regarding the housing schemes during the same period. Moreover, in cases such as Voluntary Health Association of Punjab v. State of Punjab (2014 SCC OnLine P&H 8465) it was observed that issues such pertaining to implementation of building code, etc. lies in the domain of policy-makers instead of the Court. Overall, this reflects policy miscalculations and administrative inefficiency in the state of Punjab. Disputes are bound to arise if considerations of all stakeholders are not taken at the stage of planning urban development and in the absence of continuous monitoring, evaluation and necessary calibration of policy framework.
Government measures
The Punjab government has taken several steps to address these challenges. As per Economic Survey of Punjab 2023-24, total expenditure on urban development for Punjab increased from Rs. 1996.9 crores in 2021-22 to Rs. 2923.5 crores in 2022-23 which is estimated to be at 5012.8 cores in 2023-24. The State has focused on sustainable development and improved urban living standards. It notified ‘Mission Tandrust’ in 2018 taking a holistic approach to make ‘Punjab the healthiest state with healthy people by taking care of its air and water quality, scientific food management, safe food as well as ensuring a good living environment’. The activities of the Mission are being coordinated by the Directorate of Environment & Climate Change under the Grant-in Aid provided by the State Government. In 2023, Rs. 1.38 crores were sanctioned to implementing agencies under the mission.
Smart Cities Mission was launched in 2015 by the Government of India to ‘promote cities that provide core infrastructure, clean and sustainable environment and give a decent quality of life to their citizens through the application of ‘smart solutions’.’ The Mission is a Central Sponsored Scheme with the State governments and Urban Local Bodies (ULBs) required to contribute an equal amount as the grants from the Central Government on a matching basis. From Punjab, four cities – Ludhiana, Amritsar, Jalandhar and Sultanpur Lodhi have been given the status of smart cities under the Mission. A total corpus of Rs. 3039.89 crores has been established with works amounting to 522.36 crores completed, Rs. 2019.18 crores awarded and works amounting to 498.35 crores under various stages of tendering and approval in all four smart cities. Since, under the Mission, Punjab and its ULBs are required to contribute an equal amount as of the Centre, it can be inferred that out of the total corpus amount, around 1519 crores has been contributed by Punjab and its ULBs. The inference is further supported by the Annual Financial Statement of Punjab for the year 2023-24 where Rs. 713 crores out of allocated budget of Rs. 1131 crores have been spent on various aspects such as smart roads, roof-top solar panels, etc. of the Mission.
What ought to be done
A comprehensive urban housing strategy is essential for Punjab to fully benefit from urban growth while also addressing the challenges that it brings. To meet the growing demand for housing, it is crucial to improve the housing system through affordable loans and encourage the private sector participation.
For example, Gujarat has effectively implemented Public Private Partnership (PPP) models to create affordable housing stock and to utilize the available land in an optimal manner. Punjab’s housing policy too, can benefit from the collaboration between private and public sectors. Additionally, the ‘Minha Casa Minha Vida’ program of Brazil , which provides subsidized loans as part of its housing policy to eradicate the housing deficit in the country, also offers a valuable way forward. A similar approach can also be adapted to Punjab’s specific needs. This would ensure that people do not pay unsustainable debts to afford housing in the state.
It is also essential to ensure equitable access to basic services such as water, electricity, and employment, while also focusing on the balanced development of small and medium towns. South Africa has used the strategy of Integrated Development Planning (IDP) to ensure new housing developments are simultaneously equipped with essential services like water, sanitation, electricity, and transportation. Punjab’s housing policy should also take this issue into consideration and ensure that the cities are urbanised with proper master plans. The establishment of Metropolitan and District Planning Committees, with clearly laid out tasks, powers and jurisdiction, will encourage such inclusive governance.
By working together, the government, urban planners, and the private sector can create a housing framework which can promote sustainable economic growth. It can also improve transportation infrastructure and enhance environmental sustainability. Ultimately, this approach promotes inclusive development that benefits all the residents.
Both the authors are interns at PANJ Foundation.