The Hindu Business Line : Mega urban renewal plan in the offing — Centre to pitch in with Rs 50,000 cr over 5 years

A total of 60 cities have been identified for upgradation, comprising seven mega cities of Delhi, Greater Mumbai, Ahmedabad, Bangalore, Chennai, Kolkata and Hyderabad, 29 cities with million plus population and 24 other cities with less than one million population.

The major initiative at urban renewal has emanated from the Prime Minister's Office in view of the fact that while the population has grown three times since Independence, urban population has grown five times.

In other words, urban India is bursting at the seams and unless a massive effort is launched soon, India's quest to join the developed world in the next two decades would remain unfulfilled. Subsequently, the Planning Commission, which acts as the secretariat for the Prime Minister's Committee on Infrastructure, fleshed out the plan.

The blueprint for developing urban India has taken the shape of a National Urban Renewal Mission (NURM), which is expected to be unveiled soon, possibly in the coming Budget.

The initiative is estimated to cost approximately Rs 1,26,786 crore over the next five years and will see the involvement of the Centre, the States' urban local bodies (ULBs) and financial institutions.

Funding pattern

The funding pattern worked out for the mega cities and those with more than million plus population is 35 per cent from the Centre, 15 per cent from the States and the balance 50 per cent from financial institutions.

For other cities, the ratio would be 80:10:10. However, the release of funds from the NURM would be contingent upon the States and their ULBs signing a tripartite memorandum of understanding with the Union Government and accepting to undertake reforms listed out under the mission programme.

Reforms agenda

The reforms agenda drawn up for State Governments include core reforms, mandatory reforms and five optional reforms from the package.

The core reforms include implementation of decentralisation measures as envisaged in the 74th Constitutional amendment, adoption of modern, accrual-based double entry system of accounting in ULBs, passage of public disclosure law to facilitate quarterly performance information to all stakeholders and community participation law to institutionalise citizen participation.

Besides, States have to transfer, over a period of five years, all special agencies that deliver civic services in urban areas to ULBs and create accountability platforms for all urban civic service providers during the transition period.

The ULBs would include municipal bodies under the Municipalities Act and planning and development bodies under the Planning and Development Act.

Accountability

Other core reforms include introduction of e-governance for property tax collections so as to achieve at least 85 per cent collection efficiency within five years and introduction of similar practices in the case of financial accounting systems, work management, water tax billing and collection system, trade licensing system and passing of building plans.

Compulsory reforms to be undertaken by the States include repeal of Urban Land Ceiling and Regulation Act, reforms of rent control law, rationalisation of Stamp Duty to bring it down to no more than 5 per cent within next five years and introduction of independent regulators for urban services.

Mission's ambit

The NURM will cover physical infrastructure development projects such as water supply, sewerage, sanitation, solid waste management, roads and street lights.

There will be other sub-missions on urban transport and mass rapid transportation systems, on environment protection and improvement, on slum development and relocation and on employment projects, housing projects for the economically weaker sections and health and education projects to ensure quality elementary education and health for all.

The per year funds requirement under the NURM involves Rs 11,429 crore each for the seven mega cities and those with million plus population in which the Centre's share would be Rs 4,000 crore under each head.

Other cities with less than one million population would require Rs 1,250 crore annually in which the Centre would pitch in Rs 1,000 crore and another Rs 1,000 crore have been earmarked for remaining cities in the country.

Though the Centre's commitment works out to Rs 10,000 crore annually, it is expected that in the initial years there would be a time lag in working out the preliminaries, calling for bids and awarding contracts.

Therefore, the funding structure worked out for the Centre under NURM is Rs 6,000 crore in the first year, Rs 9,000 crore (second year), Rs 12,000 crore (third year), Rs 15,000 crore (fourth year) and Rs 8,000 crore in the fifth year.

The States would have to put in much less, their share being 15 per cent and 10 per cent, respectively, for the different categories.

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