Land-Based Financing Elements in Infrastructure Policy Formulation: A Case of India

Abstract

A rapid increase in land and property values has been one of the driving forces of urban ecosystem development in many countries. This phenomenon has presented project proponents/policymakers with multiple options and associated challenges, nudging them to configure or incorporate elements of land-based financing in their policies and legislations. Specifically, the Government of India and various state governments have sought to monetize land through diverse instruments, for augmenting the financial viability of infrastructure and area development projects. This paper compares Indian central and state infrastructure policies/acts with regard to land monetization strategies. The analysis indicates that policies and legislations are taking a turn towards promoting land monetization mechanisms as a financing tool for cities and project implementation agencies. However, the approach is cautiously used and implementation is often seen to fall behind actual project timelines. Based on the findings, key determinants of a successful policy that captures an increase in land values, are identified. The learnings provide useful inputs for states to strengthen their policy documents and legislative/institutional frameworks, for ensuring the effectiveness of land-based financing tools.

Monetize the Urban Multiplier: A Study of India’s National Infrastructure Pipeline and National Monetization Plan

“…Most of the debate in India has been on the availability of land for providing other infrastructure. In contrast, land usage as a revenue augmenting source has been sparse in recent years (Tirumala & Tiwari, 2021). The low share of sustainability-related aspects might be due to the relatively recent uptake of the discourse on sustainability (ADB, 2021).…”

“…The first step is to identify the various themes that underly the documents being compared. The key factors that influence infrastructure development are urbanization (Söderström et al, 2014; Gebre & Gebremedhin, 2019), land availability (Tirumala & Tiwari, 2021), sustainability principles adoption (ADB, 2021; Mirabile et al, 2017 and involvement of the private sector through various arrangements to monetize existing public assets and build new ones (ADB, 2021; Iyer & Purkayastha, 2017). Table 1 sets out the keywords used to identify the various themes in the NIP and NMP.…”

Urban Ecosystem Services: Current Knowledge, Gaps, and Future Research

“…Across the globe, land-based financing is becoming more widely recognized as a mechanism for developing infrastructure and supplying ecosystem services [14]. One of the main drivers of urban ecosystem growth in many nations has been a fast increase in land and property values.…”

“…In particular, the Indian government and state governments have attempted to monetize land through a variety of methods in order to improve the financial sustainability of infrastructure and area development projects. In terms of land monetization approaches, Tirumala and Tiwari [14] examined Indian central and state infrastructure policies and relating acts. Key factors of a successful strategy that captures a rise in land values are highlighted and reported on in their study [14].…”

“…In terms of land monetization approaches, Tirumala and Tiwari [14] examined Indian central and state infrastructure policies and relating acts. Key factors of a successful strategy that captures a rise in land values are highlighted and reported on in their study [14]. Zepp and Inostroza [15] created an ad-hoc assessment to evaluate a typical environmental compensation technique using ecosystem services with an actual planning and development scenario involving a planned route to a restructured former industrial site in Bochum, Germany.…”