NIPFP/March 16, 2006

Indore: City Development Plan and

City-Level Reform Agenda
State-Level Agenda
An Appraisal Report

1.
The City Development Plan (CDP) of Indore gives a comprehensive account of Indores
demographic and economic characteristics, land-use, infrastructure, environment, and housing
and slums. The CDP identifies the gaps and deficits in city-based infrastructure concerned with
several of these sectors. The CDP also provides information on the citys institutional set-up,
with particular reference to the role of Indore Municipal Corporation (IMC) vis--vis other
agencies involved in the provision and maintenance of infrastructure and services. The CDP
explains, in detail, the role of agencies involved in urban development, these being the Indore
Development Authority (IDA), Madhya Pradesh Public Works Department (MPWD), Madhya
Pradesh Housing Board (MPHB), District Urban Development Authority, Madhya Pradesh
Town and Country Planning Department, and Krishi Upaj Mandi Samiti. There are special
agencies for the provision and management of citys transport. These are the Indore
Development Fund limited which is owned by IMC and had been formed to mobilize funds for
repair and construction of roads in the city and Indore City Transport Services which is a fully
government owned company, set up to provide an efficient transport system in the city. The
CDP has provided a detailed account of the finances of the Municipal Corporation of Indore.
2.
Indore is known as the business and trading capital of the state, with more than 63% of
employment in the tertiary sector. The city has a number of industrial establishments and a
proposed SEZ. Some of the key issues identified in the CDP and further addressed in the
strategies are (a)

High population density

Indore registered during the last Census decade a high population growth
of 40%, (p.25), and has a very high population density ((1028 persons per hectare
in Indore planning area (p.26). This has caused tremendous pressure on the
existing space. The CDP, however, has pointed out to the fact that the growth of
Indore during 1974-1991 was below the density proposed in the Development
Plan (1974-1991), and the high density in some areas reflects a skewed spatial
distribution-dense pockets in the CBD area and in the slums coexisting with
sparsely populated areas mostly near the fringe.

(b)

Lack of adequate infrastructure

The city is characterised by huge infrastructure deficits -

(i)

Water supply is available for only 45 minutes on alternate days,

covering 54% of the city population. Average water supply is 80
lpcd. 50% of water is unaccounted for (UFW), including 40%
transmission and distribution losses.

(ii)

Only 55% population has access to sewerage network and 80% of

sewers are underutilised for want of maintenance

(iii)

Only 20% of roads have storm water drainage

(iv)

Solid waste collection suffers from poor handling and management

(v)

Narrow road widths, high vehicular ownership, and a

heterogeneous mix of transport modes resulting in traffic
congestion problems and a high accident rate.

The CDP points out that infrastructure has caused adverse impact not only
on the quality of life but affected the growth of industries and trade in the city
(p.31).
(c)

Environmental pollution and lack of green cover

One of the most critical problems faced by the city is urban environmental
pollution. According to the CDP, the main cause of air-pollution is vehicular
traffic. The suspended particulate matter (spm) in the city is in excess of the
threshold of 200 ug/cum by Indian standards (p. 55-56). Discharge of untreated
domestic and industrial wastes has resulted in pollution of the surface water
bodies in the city (p. 51).
The city lacks in terms of green and recreational spaces.

(d)

Housing shortage and slums

50% of Indores population have access to only informal housing in the
form of squatters and unauthorised colonies. 35% people live in slums and
squatter settlements (p. 58, 107) and another 15% in unauthorised colonies, with
inadequate infrastructure facilities.

(e)

Inner city congestion

The CBD has heavy population pressure and is suffering from congestion
in terms of traffic, building intensity, and parking. Most of the buildings in the
CBD area are said to have completed their life span.

(f)

Institutional multiplicity, lack of co-ordination and overlapping jurisdiction

(p. 89-90)
The CDP had made specific references to the areas of fragmentation
between the Municipal Corporation and development related agencies like IDA,
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MPTNCP, and MPHB. Lack of co-ordination is said to be the principal reason

behind the many problems that Indore City is faced with, particularly regarding
the utilisation of land. Issues pertaining to governance and institutional set-up are
separately highlighted in the CDP, but these are not linked to their impact on
service provision or land development.
The CDP has been prepared keeping a view the deficiencies and
requirements till 2021. It focuses on the first phase of the target for sustainable
and harmonious development by 2021. The CDP relates to the entire planning
area of Indore for a period of seven years from 2006-2011. The CDP is
formulated on the basis of a participatory process that began in August 2005,
involving meetings at Zonal level (Indore has 12 zones), the Municipal
Councillors, and other stakeholders. A questionnaire was circulated which was
filled in by stakeholders for eliciting their views on the different aspects of citys
problems and development. The key stakeholders involved in the consulting
process were the MPs, MLAs, representatives of the government departments,
and parastatal agencies, NGOs, CBOs, corporate bodies in industry, commerce,
and other sectors, and citizens of Bhopal.
3.

The Vision identified for the city is as under:

Indore shall enter an era of prosperity with spatially restructured
environment, improved urban infrastructure to achieve better lifestyle,
minimum basic services to the underprivileged with functionally
sustainable development and dynamism of growth which will pave the way
for it becoming a world class commercial city.
The vision consists of the following elements
(a)

Healthy community life

(b)

Improved mobility

(c)

Housing for all

(d)

Sustainable city

(e)

Heritage and inner city area Conservation

These elements are elaborated in the CDP: for example, healthy community life is
sought to be achieved by focusing on water supply, complete connectivity and treatment
of sewage, and disposal of solid waste; for improved mobility, the proposed constituents
are proper road network, bridges and flyovers, access to public transport, mass rapid
transport system, and road safety; housing for all means shelter for urban poor and
extension of basic services to them; sustainable city is visualized in terms of control of air
and water pollution and green Indore; and heritage conservation means improvement of
old city and conservation of cultural and built heritage.

The vision is somewhat difficult to adequately understand on account of the use

of words like spatially restructured environment and functioning sustainable
development. It will be useful if the IMC would describe the vision in simple, easy-tounderstand language. It would then be easier to see the links between the vision and the
strategies.

4.

Strategies
Strategies are formulated after identification of sector-wise goals for the year 2021.

Water supply
Sewerage
Solid Waste Management
Transport
Slums
Environment

100% population coverage and 24 hour water supply by 2010

100% population and area coverage by 2020
Development of a comprehensive system with modern and
scientific methods by 2011
Efficient public transport, introduction of metro-rail, elevated
road intersections and flyovers to remove congestion
Slums less city by 2012
Clean and environment friendly Indore by 2021

The CDP identifies strategies and detailed projects for each of these targets,. Although
these are linked with the issues identified in these sectors, the achievability of these requires
further consideration. For instance, from a stage where the city has only 45 minutes of water
supply and 54% population coverage, to achieve 100% coverage and a 24 hour supply would
require massive efforts in terms of investment and institutional capacities. A similar observation
is made for sewerage. Indore may also like to re-evaluate the mobility strategy in the light of the
GOI urban transport policy, considering other options for improving mobility.
The CDP identifies Construction of Indore Municipal Corporation Building as a project
under Urban Renewal.
5.

Strategies for Slums

The vision with regard to slums in Indore is Slum less Indore by 2015. The CDP
mentions that there are 1,18,000 slum households in the city out of which 86,000 need
rehabilitation, relocation and infrastructure provision (p. 109). The CDP envisages making
provision for about 15000 dwelling units for slum dwellers either to be relocated or rehabilitated
at the same place, development of 25000 plots for the urban poor, and about 40,000 slum
households are expected to be provided with improved infrastructure services. This will benefit
around 80,000 households.
To control the growth of slums, the Indore Development Authority (IDA) proposes to
construct dwelling units for EWS and LIG category on 20% of land of its Town Development
Schemes.
The finances of the Indore Municipal Corporation (IMC) are detailed out in Chapter 16 of
the CDP (it was separately delivered on Tuesday, the 14th March). The IMC levies a property
tax, water tax (for a connection), general sanitation/surcharge tax, general lighting tax, and an
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education cess. Until 1991, property tax was levied on the ARV (letting value) of a
building/land at rates varying between 6-10%. Now, the ARV method has been changed to a
zonal area-linked system involving self-assessment of annual ratable value by the assesses.
According to the CDP, inspite of non-listing of approximately 130,000 properties with the IMC,
there has been an improvement in property tax collections on account of self-assessment. Water
billing is on a flat rate, even when there is partial metering.
The IMC has a modest operating surplus but an overall deficit, when capital expenditures
are taken into account. These deficits have been continually mounting. It is also necessary to
point out that revenue grants in case of IMC are in excess of own revenues. The CDP has
given key financial indicators of the IMC, a few of which are given below:
Own revenues as a % total revenue income
Share of establishment expenditure as a % of total revenue
expenditure
Annual growth in O & M expenditure
Per capita outstanding debt liability as a % property tax demand

46.51%
35.67%
15.97%
Rs. 85.53 or 34.42%

The CDP has given a financial operating plan (FOP) for the period 2005/06 tp 20011/12,
based on the actual finances of the IMC. The FOP is developed under three scenarios:
(a)

Base case scenario

(b)

Full investment scenario

(c)

Sustainable investment scenario

The IMC has given an action plan which gives details of projects for JNNURM funding.
The Plan identifies the following heads of projects, and within each, detailed works are given (p.
116).
(a)

Roads, transport and drainwork

(b)

Water supply (incluidng water audits)

(c)

Sewerage consisting of augmentation and rehabilitation of the system,

regularization of the illegal outfalls, awareness compaign for recycling and reuse,
etc.

(d)

Storm water drainage including drainage rehabilitation

(e)

Solid waste management

(f)

Transport system comprising, inter-alia, asset rehabilitation, removal of

encroachments, traffic management, decongestion of the CBD.

(g)

Housing for the urban poor, including regularization of illegal colonies and
unauthorised layouts
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(h)

Environment

(i)

Heritage structure

(j)

Special projects

City-Level Reform Agenda

(a)

Accounting Reform
The Indore Municipal Corporation follows a double entry, accrual based
accounting system.

(b)

E-Governance Application
E-governance applications have been extended to property tax, water tax,
births and death certification, building permission, and several other areas. The
work of GIS application has been awarded to a private company.

(c)

Property Tax Reform

The IMC has proposed that 85% collection will be achieved in the second
year, i.e., 2006/07. It should be noted that currently, of the total of 350,000
properties, 224000 are listed with the IMC and collection to demand ratio is 41%.

(d)

User Charge
Operation and maintenance charges are proposed to be covered only in the
fifth year of the reform. No annual timetable is provided.

(e)

Services to the Poor

According to the reform agenda, services will be reached to the poor only
in the 5th year. No timetable is provided.

(f)

Internal Earmarking
According to the agenda, internal earmarking (without giving any figure)
has already been done.

Optional Reform
There is no explanation of what will be done in the different years.

State-Level Reform
(a)

Implementation of the 74th Constitutional Amendment

According to the reform agenda, except for the constitution of the Metropolitan Planning
Committee (MPC), all components of the 74th Constitution Amendments have been
implemented. In respect of the de-facto transfer, all but urban planning functins have been
transferred to the ULBs. These are expected to be transferred between the 3-5th year of the
agenda (not clear-whether it refers to the MPC or de-facto transfer of urban planning functions).
All staff concerning the function have been transferred to the ULBs.
(b)

Urban Land (Ceiling and Regulation) Act, 1976

The Act has been repealed.

(c)

Rent Control Reform

The State government plans to undertake rent control reforms over a four-year period.
However, what these reforms are likely to be, is not mentioned. Also, the size of the problem is
not stated.
(d)

Stamp Duty Rationalisation

Stamp duty rates vary between 8-10%. These are planned to be reduced to 5% over a 5year period. No yearly plan is given.
(e)

Public Disclosure

There is a provision for social audit in the Municipal Acts. This provision is proposed
to be expanded in year 2 and 3.
(d)

Community Participation Law

It is planned to be taken up in the 3rd year, with no indication of the actions to be taken
form year 1.
(e)

City Planing Function

This function is currently being performed by the State-level/Town Planning Department.

ULBs will be associated with this activity from year 3 onwards.
(d)

Water Supply
It will be transferred to municipality in year 7 where it is not a municipal function.

(e)

Areas needing consideration

(i)

Achievability of the goals with the tenure of the JNNURM when considered in
relation to the existing levels.

(ii)

The role of the IMC in the planning function to what extent the IMC can be
involved.

(iii)

Rehabilitation of slums.

(iv)

Institutional overlap

(v)

Formulation of reform agenda without detailing out the approach.

Recommendation
The CDP serves as the basis for formulating the DPRs.
Reform agenda leaves room for reworking. Apart from the phasing, the reform agenda is
not inspiring in that it does not tell what the state government/IMC plans to do to improve
efficiency or enhance equity or remove the glitches that hamper the functioning of the land and
property markets. The Ministry may like to rework/negotiate the reform plan with the state
government/city government.

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