The urban renewal mission is likely to bypass or short change the urban poor

-- On December 3, 2005, Prime Minister Manmohan Singh launched the Jawaharlal Nehru National Urban Renewal Mission (jnnurm). The ambitious mission, worth Rs 100,000 crore, promises to reform and rebuild 63 Indian cities, which will be identified subject to the willingness of the state governments to 'reform'. Debate on the mission began almost immediately. Former prime minister V P Singh called it anti-poor; the Communist Party of India (Marxist) criticised the mission for paving the way for privatisation of urban services.

The Union ministry of urban development (moud) has acknowledged the inadequacy of existing urban development schemes -- eligibility for them is determined by population size. Hence, more comprehensive schemes such as jnnurm and the Urban Infrastructure Development of Small and Medium Towns (uidsmt). The financial allocations for existing schemes fell sharply during the current financial year.

Mission in waiting Planned during the erstwhile National Democratic Alliance government, the mission owes a lot to the Rs 500-crore Urban Reforms Incentive Fund (urif), which, launched in June 2003, linked reforms with finance. urif mandated the states to undertake seven reforms (see box: urif conditions). Adoption of each reform entitled the state government and municipality to a certain percentage of the total central assistance. jnnurm, it is claimed, is the fulfilment of promises made in the national common minimum programme of the ruling United Progressive Alliance government.

M Rajamani, joint secretary to moud , says, " jnnurm focuses on efficiency in urban infrastructure and service delivery mechanisms, community participation and accountability of urban local bodies (ulb) towards citizens." It'll have two sub-missions:

l One, urban infrastructure and governance. It'll focus on water supply, sanitation, sewerage, solid waste management, roads, urban transport and redevelopment of old city.

l Two, basic services to the urban poor. This will work on integrated slum development and providing to urban poor basic services like housing and land tenure at affordable prices. This will include the Integrated Housing and Slum Development Programme (ihsdp), which combines ongoing schemes. Guidelines envisage provision of housing near the place of occupation.

Conditionality Critics of the mission say the ministry has imposed conditionalities to push through its reform agenda. Ministry officials argue this is to bring in sustainability . The reforms include the full recovery of the costs of operation and maintenance and creation of a revolving fund for maintenance of assets. The guidelines prescribe two categories of reforms: mandatory and optional. Most are similar to those in urif. They include decentralisation, improving property tax collection, full cost recovery through user charges -- the list goes on.

Cities under jnnurm will have to opt for any two reforms from the optional category during each year of implementation. "In a way, optional reforms are mandatory," Rajamani clarifies. This would mean states and ulbs would have to encourage public-private partnerships (ppp) in jnnurm projects.

To get Central aid, the first step is preparing a city development plan (cdp), and there is Central assistance to prepare this. A number of states have started making cdps without seeking Central funds. jnnurm guidelines are unclear on how the Centre will assess community participation in cdp preparation. moud has already invited expression of interest from the consultants to prepare cdps. "We are preparing a suggestive list. But the states can decide for themselves," says Rajamani. State governments and ulbs are expected to sign memoranda of agreement (moa) with the Centre, committing to a timeframe for reforms. Only after this can detailed project reports be submitted.

Funds flow
"In the current financial year, urban infrastructure will get Rs 3,500 crore and basic services to the urban poor will get Rs 1900 crore," says Rajamani. Sixty three cities will get Rs 50,000 crore as Central assistance based on their urban population over next seven years. States and the ulbs will have to contribute a matching share. A beneficiary contribution would be collected for basic services to the poor (especially for housing: 12 per cent). It seems the same won't apply to projects like water supply and sanitation. What services will the poor be entitled to? Not clear right now.

The Economic Survey 2004-2005 has estimated a requirement of Rs 53,719 crore for just water supply, sanitation and solid waste management during the Tenth Plan. jnnurm includes roads and public transport. What will be the basis of decisions on projects? "Priority will be decided by the states. A funding criteria is being finalised," explains Rajamani. With Bihar demanding Rs 10,000 crore, moud's ability to tackle the states will be tested. As no ceilings are proposed, several states and municipalities have already begun the planning process without sparing a thought to matters financial. "It is estimated that Surat needs around Rs 1,500 crore, of which 50 per cent will be the Centre's share," says Pankaj Joshi, the city's municipal commissioner. "Our revenue from octroi is good enough to the meet the matching ulb share of Rs 450 crore (30 per cent)."

But it isn't just government grants that will finance the jnnurm. To help ulbs raise funds from market, moud is working on a pooled finance development fund with the help of the fire (Financial Institutions Reform and Expansion) project, a joint effort of the Union government and usaid, the funding arm of the us government. It helps ulbs raise funds through tax-free municipal bonds with some guarantees from the Union or state governments. Bangalore is a case in point; usaid given credit assistance to the extent of 50 per cent principal in lieu of a fund created out of 40 per cent revenue surplus of ulbs.

But the funding debate undermines larger governance issues. Most crucial, it doesn't take into account increasing migration from villages to cities, which is the reason for uncontrolled urbanisation. Does the mission consider the need for counter magnets to slow down migration to overburdened cities? "The Centre is working on such a project in the National Capital Region, and the learning would be adopted by moud later on," says Rajamani. When? And when will jnnurm take off?

"It is up to the state governments," answers Rajamani. If the urif experience is anything to go by, the portents aren't good. The Planning Commission's mid-term appraisal of the Tenth Plan notes the states' lackadaisical attitude: "...Rs 188.15 crore was released [to 28 states] as first instalment.... However, Rs 68.18 crore only was released as second instalment, indicating that all the milestones have not been carried out." The ministry clarifies that jnnurm funds would be released irrespective of utilisation of previous allotments. This undermines suggestions of a parliamentary committee to build in " proper checks" and ensure proper end-use of funds.

On the issue of land tenure to urban poor, an urban governance expert cautions, "With rights, land becomes bankable and as seen in Mumbai and other places one must be careful in keeping the land mafia out." He adds, "The Bangalore exerience shows that there are 12 different types of land tenure and in actual there will be only 30 per cent bearers. In that case the remaining can be chucked out." Experts also argue that the reduction in stamp duty and gis information on revenue land holdings will facilitate private land acquisitions. Already there is a scheme for foreign direct investment in housing and township development.

The mission has no guidelines on standards of service delivery; only basic services are mentioned. "The government does not want to involve people to develop and specify performance indicators," says Vinay Baindur, an urban governance expert. He says there are deeper flaws in jnnurm and the Model Municipal Law (mml), drafted by moud under the influence of the fire project. mml was to be a way of decentralising. Several state governments and municipalities have hired the fire project to look into municipal law reforms. " mml doesn't make the local government responsible for providing services to the urban poor. There is a nexus to stop all the subsidies and to explore market funding options," Baindur alleges.

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