|
| Funding for urban renewal at risk of momentum loss |
| Vandana Gombar / New Delhi Feb 18, 2010, 00:47 IST |
|
The Union government’s flagship programme for urban development, the Jawaharlal Nehru National Urban Renewal Mission, or JNNURM, is almost out of funds.
The mission has a funding commitment of a little over Rs 50,000 crore from the central government for urban infrastructure projects on one hand (under the Ministry of Urban Development) and projects for the urban poor on the other (under the Ministry of Housing and Poverty Alleviation).
Funding under the mission is given as a grant, linked to progress on a pre-decided reform agenda. This grant — augmented by contribution from the state government concerned and urban local bodies — was expected to lead to investments of over Rs 1 lakh crore in urban India over its seven-year term.
“Most of the states have exhausted their seven-year outlay. We are not in a position to take up new projects, though there is demand,” conceded M Ramachandran, secretary, ministry of urban development.
Take, for instance, Andhra Pradesh. The state’s allocation for the term of the mission (2005-2012) was Rs 1,718 crore, while the funds committed were higher at Rs 1,780 crore at the end of October last year. There is no balance available for additional projects. The story is similar with states such as Maharashtra and Gujarat.
In the case of projects for the urban poor, the Ministry of Housing and Poverty Alleviation has two programmes under JNNURM — Basic Services to the Urban Poor and the Integrated Housing and Slum Development Programme. Over 80 per cent of the seven-year allocation has been committed already, said minister Selja Kumari. Again, the limits for some states have already been exhausted.
LOW DISBURSALS
But, there is a catch to this. Almost all the available funds may have been committed, but disbursal is well behind. Less than Rs 10,000 crore has been released to the states so far from the Rs 25,000 crore available for infrastructure projects in the 65 ‘mission cities’. In the case of projects for the urban poor, the grant released is even less, at Rs 7,532 crore.
There are many reasons. These range from lack of project progress to lack of matching funds from the state government to lack of reforms necessary for the further release of funds.
The government, on the instructions of the finance ministry, recently abandoned leniency on the reform agenda. “The leniency was mandated by the Cabinet for the release of the second and third installment. However, we have no mandate for leniency in the release of the fourth instalment (the final one),” said Ramachandran.
There have also been concerns of some states taking the money and not using it. Utilisation certificates are still awaited for two projects for which funds were disbursed in 2005-06, and for 26 projects for which funds were disbursed in 2006-07.
“The ball is in the states’ court. They have to act, and gear themselves to claim more money,” said Ramachandran.
There are about 500 urban infrastructure projects approved under the mission, though only about 50 have been completed so far.
LARGER MISSION?
There is a demand from some quarters for increasing the funding for and coverage of the mission beyond the initial set of 65 cities, though critics say the mission — launched in December 2005 — has yielded insufficient reforms and insufficient completed projects. Only about half of the optional and the mandatory reforms have been carried out so far.
The reform agenda includes repeal of the Urban Land (Ceiling and Regulation) Act, reform of rent control laws, rationalisation of stamp duty, levy of user charges and transfer of powers to urban local bodies (according to the 74th constitutional amendment).
“I think we need to make it bigger to keep the momentum going. I don’t want this momentum lost. We should continue to look at more projects,” said Ramachandran.
In his last Budget, Finance Minister Pranab Mukherjee had highlighted how JNNURM had become “an important instrument for refocusing the attention of the state governments on the importance of urban infrastructure”.
He had enhanced by 87 per cent the allocation for JNNURM to Rs 12,887 crore in 2009-10, and also allocated Rs 4,000 crore for housing and other services for the urban poor. This included an allocation for a new scheme dubbed Rajiv Awas Yojana, aimed at making India slum-free in five years.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
