The twenty-first century will witness a rapid urban expansion in the developing world. India, it is believed, will be at the forefront of such a phenomenon. This book acknowledges the role of agglomeration externalities as the cornerstone of urban public policy in India.
Arguing that hypotheses of over-urbanization and urban bias theory—which articulated a negative view of urbanization—are based on fragile theoretical as well as empirical foundations, this book calls for proactive public policy to harness planned urbanization as resource. India requires agglomeration-augmenting, congestion-mitigating, and resource-generating cities as engines of economic growth, including rural development.
The book provides a large number of practical examples from India and abroad to enable policy-makers undertake reforms in urban and regional planning, financing, and governance to meet the challenges of urbanization in India. It combines theory and practice to draw lessons for an urban agenda for India and recognizes the central role of cities in catalysing growth and generating public finance for economic development.
Chapter 6: Using Urban Land as a Resource
Using Urban Land as a Resource
Land as a Revenue Base
Many cities in the developed countries have relied heavily upon land-related revenues for their development. However, urban land is yet to be exploited as a resource to finance urban infrastructure and services in India. In this chapter, we draw lessons from the history and economics of urban land as an instrument to finance urban development. We present a toolbox of land-related financing instruments. A strong case is made for land value taxation, land development financing, and land value capture methods to finance planned urbanization in India.
A land tax is a levy on a land-related base—often the value of land, expressed in capital value or rental value. The relationship between capital ...