Nath wants urban renewal delinked from reforms

Urban Development Minister Kamal Nath found the cooler climes of Davos an appropriate platform to articulate his ambitious game plan. The minister is working on a new plan which to remove glitches in the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

While these are early days for the minister in his new role, Nath said the broad focus would be on delinking the allocation of money from reforms. At present, the government releases money to state governments on the basis of milestone payments — money is given only after implementation of certain reforms agenda. Nath said it was unfair to expect all cities and municipalities to carry out reforms before the money was given. “You can’t have the same norms for Mumbai and Aurangabad, for example,” he said.

Also, the ministry is planning to move to a “municipality-based approach” rather than the existing state-centric one. “The money should go to the municipalities directly, and not through state governments. The 74th Constitutional Amendment Bill, which has been passed, will make it possible to give more powers to city mayors,” he said. It was not clear, however, whether this would be accepted by state governments, and Nath did not want to comment on the issue.

The minister said he also planned to ensure 24x7 water supply to several cities, which were in the process of being identified and the government would soon approach the World Bank for a $1-billion loan for the project. The Bank had committed to give a $5-billion loan for schemes under JNNURM based on conditionalities such as municipal reforms. But since the reforms process will not be over anytime soon, the Bank will be requested to provide $1- billion for the water supply project. Nath scheduled to meet World Bank President Robert Zoellick later in the day.

Though Nath did not want to comment on the issue, the ministry appears to be not too happy with the functioning of the Delhi Development Authority. Nath said he would prefer a public-private partnership model, under which the private sector would be given an opportunity to develop commercial centres in new low-cost housing colonies. “There is no bar on low-cost malls and while DDA owns the land and develops the housing societies, private parties can be involved in the commercial part of it so that the project becomes feasible and the quality of construction improves,” Nath said. He has already discussed the issue with Delhi Chief Minister Sheila Dikshit and will meet Lieutenant Governor Tejendra Khanna next week.

Nath said the link between the economic performance of cities and the urban sector was getting stronger, as the urban sector contributed 60 per cent of GDP which was likely to further increase to around 75 per cent in the next decade. Over 70 per cent of the new jobs would be largely created in cities.

The magnitude of the challenge can be better appreciated from the fact that urban areas will account for around 40 per cent of India’s population.

India has 42 cities with population of more than a million, and by next year, this will increase to 51 cities. By 2030, he said, the number will go up further to 68 cities with population of more than a million, 13 with more than four million and six mega cities with population of 10 million. It is estimated that the requirement of investment in the urban sector in the next 20 years is Rs 54,00,000 crore and about 60 per cent of this is needed in the transport sector alone.