Only 22 housing projects for poor completed under JNNURM, says CAG

Comptroller and Auditor General raps urban development and housing ministries for failing to bring about urban governance reforms

The recent claim of housing and poverty alleviation ministry that housing shortage has become less acute in India is belied by the Comptroller and Auditor General’s (CAG) report tabled in the Parliament on Thursday. It said that only 22 of the 1,517 housing projects for poor people under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) have been completed by due date. CAG stated that the ministry was not well equipped to monitor the progress of JNNURM due to the scale and magnitude of the mission.

The report further rapped the Union ministries of urban development and housing and poverty alleviation for not being able to bring about reforms in the governance of urban local bodies (ULBs). The report found that ULBs in most of the states did not hold elections regularly, which has greatly delayed the performance of the mission. Further, the report found that ineligible beneficiaries took advantage of the housing schemes in many states.

“We observed that 1,517 housing and 1,298 infrastructure projects were approved for implementation between 2005 and 2011. However, as on March 31, 2011, only 22 of the 1,517 approved projects were completed. In respect of urban infrastructure projects, we observed that out of the 1,298 projects approved, only 231 projects (18 per cent) were completed,” the CAG report said.

JNNURM is a Central government scheme which is implemented by the ministries of urban development and housing and urban poverty alleviation with an aim to improve infrastructure and governance in Indian cities. In the report, CAG stated that the ministries of the Central government were not equipped to monitor a project of JNNURM's magnitude. CAG said that the JNNURM guidelines had been deficient in giving adequate advisory to the states regarding utilisation of funds and there was a lack of uniformity in utilising interest earned from the funds sitting in the coffers of various states. Further, the urban development ministry's internet-enabled programme for monitoring and evaluation had proved to be unsuccessful.

Funds diverted

Only 11 out of 216 sample projects selected by CAG for the period 2005-06 to 2010-11 were completed, the CAG report states. Delays were mostly due to the non availability of resources such as land or escalation of costs and changes in designs, while in many cases the ULBs and state government did not keep their commitment to implement reforms within the framework of local governance. The report also states that funds meant for JNNURM were diverted for other non-JNNURM activities. “Due to delays in implementation of the projects, there were many cases of blockade of funds due to purchase of machinery/equipment which were not put to use," the CAG report said.

The report states that against an allocation of Rs 66,084.66 crore by the Planning Commission, the government of India had only made an allocation of Rs 37,070.15 crore of which Rs 32,934.59 crore had been released by March 31, 2011.

In its report, the CAG has recommended pushing reforms in financial, institutional, and governance structure of the ULBs to make them efficient, accountable and transparent. It has also recommended that the Central government should give incentives to those states which implement reforms envisaged under JNNURM.

At a press conference earlier this week, housing and urban poverty alleviation minister, Kumari Selja, had stated that urban housing shortage in India has decreased from 24.7 million at the beginning of the 11th Five Year Plan in 2007 to 18.78 million at the beginning of the next Five Year Plan (2012 to 2017), according to an assessment done by a government expert. The CAG report presents a somewhat different picture.

The CAG report needs to pave the way to reforms in urban governance, which could be achieved only by making local bodies more accountable.

Shortcomings pointed out by CAG

In implementation and monitoring

Urban renewal: Though urban renewal, which is redevelopment of the inner (old) city areas to reduce congestion, was an objective of JNNURM, only 11 out of 532 projects and 10 out of 766 projects for urban renewal were approved by 31 March 2011.

Urban Infrastructure Projects: In Uttar Pradesh, not a single urban infrastructure project had been completed in seven mission cities whereas in Delhi only four out of 28 sanctioned were completed.

Water Supply: Auditors observed that in 37 selected water supply projects, five had not even been started and one project was withdrawn. Delays were due to delays in getting clearances and slow tendering process. The machines purchased for such projects remained idle.

Solid Waste Management: In 11 selected solid waste management project, two had not been even started and remaining nine were not complete. Delays were due to non availability of land, forest and environment clearance, clearance from SPCB, non clearance of the site and public agitation. Funds for four projects remained blocked as machinery and other equipment were purchased in advance, making most of them idle.  

Sewerage projects: In the 56 selected sewerage projects, only four of the projects were complete. One was abandoned, while five projects were deferred. 

Mass Rapid Transit Systems (MRTS): Out of 19 selected MRTS, roads and flyovers and other transport projects, one project was abandoned, two projects were withdrawn, only three were complete.

Diversion of funds: Rs 114.68 crores were diverted for purposes other than those admissible under JNNURM.

In reforms

Collection of user charges: CAG found that out of 39 mission cities selected for audit scrutiny, mechanism for collection of user charges for water supply and solid waste management was reportedly established in seven and five cities respectively.

Property title registration, revision building bye laws: None of cities, according to Union urban development ministry, had implemented property title registration system. Twenty-one ULBs which committed to revision of building bye laws by 2011 did not implement the same.

Rent control laws: Sixteen states that committed to reform rent control laws by 2011, did not implement the law.

Housing projects: Out of 1,517 projects under Basic Services to Urban Poor (BSUP) and Integrated Housing and Slum Development Programme (IHSDP), 82 projects were selected for audit scrutiny out of which 53 were under BSUP and 29 were under IHDSP. Seven of these selected projects had not been started and one project was abandoned. Only one selected project, Housing for Urban Poor at Bawana, Narela and Bhoragarh, BSUP, Delhi sanctioned in 2007-08 was reported as complete. The remaining 73 housing projects were incomplete till March 2011. Out of 1.6 million dwelling units approved, only 418,000 dwelling units (26 per cent) were completed by March 31, 2011. Out of the completed dwelling units, only 221,000 dwelling units were occupied.

Ineligible beneficiaries: Audit observed 11 instances where there were deficiencies in identification of the beneficiaries. For example, under BSUP, Kochi Phase 2 Individual houses in Kerala, beneficiaries of three colonies were corporation employees with regular source of income who were not eligible for assistance admissible under the scheme of BSUP.


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