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Posts Tagged ‘McKinsey & Co’

Just last week, McKinsey Global Institute (MGI) published a seminal report on the future of India’s urbanization.  Some numbers they’ve calculated are totally staggering: for instance, did you know that by 2030, 590 million people will be living in India’s cities?  That’s twice the population of the United States today!  And did you know that to help these 590 million people get around, 7,400 kilometers of metros/subways will need to be constructed?!

After reading the exec summary, all I could think was how India certainly has her work cut out for her.  MGI paints a fairly grim picture of India’s cities today (e.g., citizens have access to 105 liters of water when they should have 150, only 30% of sewage is treated) and claims that in order to reverse the “urban gridlock and decay,” the country needs to invest $1.2 trillion in capital expenditure by 2030.

$1.2 trillion!  I feel like Dr. Evil wouldn’t even know what to do with that kind of money.

MGI, however, has a few tips on how to proceed.  Specifically, they believe that India should concentrate its resources – monetary and otherwise – on five areas to be successful:

  • Funding: How can India pull these resources together?  (MGI suggests monetizing land assets, collecting higher property taxes, and forming strategic public-private partnerships… in conjunction with “formula-based government funding”)
  • Governance: Who is the least corrupt group of people to manage this mammoth task?  (MGI suggests that India needs “empowered mayors with long tenures and clear accountability for the city’s performance,” along with building functional metropolitan authorities)
  • Planning: How can India develop the opposite of the existing sab chalta hai, everything goes, attitude towards city planning? (MGI believes that a “cascaded” planning structure, focused on public transportation and affordable housing, can help India save >6 million hectares of arable land)
  • Sectoral policies: How can India create sustainable policies for affordable housing, climate change mitigation, job creation, and public transport?  (MGI concentrates on affordable housing, and says that in order to get it up to par, India needs to increase housing stock through a combination of incentives and subsidies)
  • Shape: How should the country’ population be distributed for maximum benefit? (MGI suggests that India invest in its Tier 1 cities and large Tier 2 cities, while ensuring that services in smaller cities are brought to a “basic standard”)

Can India do all of this?  Can it muster the finances, the political will, and execution muscle to make this happen?  MGI gives the country some lofty goals, but is optimistic that with strong backing from the central government, it can achieve many of them.

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