The government?s ambitious national urban development plan will ease up on the reform agenda for state and municipal governments. This is a major departure from the take-it-or-leave-it set of reforms that stymied them from dipping into the R60,000-crore corpus of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
The revised mission due to be rolled out before the end of March after a five-year experience with the first one will instead offer two options for reforms to states. The first is a base-level reforms agenda that states will find easier to qualify for. Once they achieve the yardsticks of this level of reforms, mostly capacity building for the municipal agencies, the next level will come in.
The second stage will be known as incentive reforms, harder but linked to the larger release of funds from the new mission. JNNURM will also allow states to select the urban areas to develop. In the last phase, the Centre had drawn up a list of 65 cities to develop.
Arun Maira, member, Planning Commission, said the revised JNNURM has been sent for comments to the two ministries of urban development and that of housing and urban poverty alleviation. The JNNURM is the world’s largest integrated urban development plan and was launched in 2007-08 to radically overhaul Indian cities.
Since then, however, JNNURM has been repeatedly hitting the obstacle of low compliance and, therefore, a dismal rate of fund utilisation despite India?s urbanisation challenges. During the Eleventh Plan, only 20% of the funds have been used up as per Plan data. India already has 380 million of its 1.2 billion population, living in urban areas and the number is expected to reach 590 million by 2025.
The Commission would like to position it as an umbrella under which three elements of improvement in living standards, provision of supporting infrastructure like roads and sanitation and finally good governance will come together.
JNNURM had made release of funds to state and municipal authorities dependent on achievement of reforms, including large-scale changes like accrual-based accounting system, credit risk assessment by rating agencies and so on.
Despite their huge financial shortages, the states, therefore have been reluctant to approach the Planning Commission to release funds for JNNURM.
A sub mission will also be created out of the JNNURM to work on capacity building training programmes to develop a municipal cadre, a sort of Indian Urban Service. ?Once those things are in place, the rate of fund utilisation will be far better?, he said.
Achievement of the JNNURM is critical to the development of other urban programmes that the government expects to ride on. But disputes over conditionalities had been holding up the finalisation of the plan.
While Maira was non-committal, the finance ministry confirmed that the demand for funds in the 12th Plan is substantially lower. Maira said in the initial phase, the JNNURM has to focus on capacity building instead of spending on mega projects.