Govt plans auto bail-out through JNNURM

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New Delhi: To prop up the automobile industry which has been hit by lack of retail finance, the government has announced an incentive scheme under the Jawaharlal Nehru National Urban Mission (JNNURM) for generating about Rs 4,000-crore business in the sector in the next few months.

Under the scheme, which forms a part of the second stimulus package of the government, states would be provided assistance as a one time measure up to June this year for purchase of buses for the urban transport system.

While the scheme will help in generating business for the automobile industry to tune of Rs 4,000 crore, it also aims at providing an improved public transport system in all 63 cities where JNNURM is being implemented, a senior Urban Development Ministry official said.

We have issued the guidelines for availing the additional central assistance for procuring buses by states for urban transport systems under JNNURM, the official said.

Till now JNNURM funds were meant for infrastructure development including construction of roads, bridges, drainage system, water and sewerage treatment plants among others.

"The exception has been done as a one time financial incentive measure up to June this year to help the auto industry as well as transforming public transport system in urban sector," the official said.

In order to ensure that the buses procured under JNNURM are utilised exclusively for urban transport, the states shall have to set up a city specific body for controlling and managing the city bus service.

The financing, which will be made after approval of the Urban Development Ministry, is meant exclusively for city bus service and bus rapid transit system for all 63 mission cities, the official said.

He said states have to prepare detailed project reports giving details of city bus service, BRTS, planning, financing arrangements, user charges, operation and maintenance.

According to the guidelines, buses purchased by states under the scheme will have to display JNNURM logo prominently. Government has also allowed public private partnership (PPP) model for procuring buses under the scheme. However, the ownership of buses will remain with the urban local bodies.

About the type of buses, the official said the guidelines have also laid down that at least 20 per cent of the buses procured under the scheme should be low-floor buses.