Phase II of the Jawaharlal National Urban Renewal Mission

Phase II of the Jawaharlal National Urban Renewal Mission (JNNURM) is set to be launched by the Government of India in April 2012.

Building on the success of JNNURM Phase I and following widespread consultation of States and Urban Local Bodies, senior officials from JNNURM, the Planning Commission, the Ministry of Urban Development and Ministry of Housing and Urban Poverty Alleviation are currently working on the detail for a new improved JNNURM model for Phase II.

In meetings the UK India Urban Infrastructure Group members had with Kamal Nath, Minister of Urban Development and the JNNURM Director in New Delhi on 5th December, and following the National JNNURM Conference on 13th December which was inaugurated by Prime Minister Dr Manmohan Singh, we have established some interesting and constructive insights into Phase II.

JNNURM was launched in 2005 to encourage reform and fast track planned development of 65 mission cities with a focus on efficiency in urban infrastructure, service delivery and equal access to the urban poor.

Cities have to introduce reforms such as adopting modern accounting systems, levying of user charges, reform of property tax and preparation of City Development Plans. In exchange, up to 50 – 70% funding for projects is provided by the central government. JNNURM has two sub missions: Urban Infrastructure and Governance (UIG), administered by the Ministry of Urban Development, and Basic Services to the Urban Poor, administered by the Ministry of Housing and Urban Poverty Alleviation.

JNNURM Director

At the meeting with the Director and Joint Secretary JNNURM on 5th December, organised by UKTI and UKIBC, UK India Urban Infrastructure Group members, including Arup, Mott MacDonald, Balfour Beatty plc and Serco plc, heard that water, sewerage, solid waste management and energy efficient public transport systems will be the priority areas under Phase II. All areas where the UK has significant expertise.

In terms of the reforms required by States to access JNNURM funds, the basic package of reforms will be the same as Phase 1, but will be adjusted for smaller towns and cities to make it more easily accessible to them. Acknowledging that there is a need to develop different models for different sizes of cities, one area being considered is to introduce a new mechanism of “loan to grant” wherein loans would be provided to states/ cities and then converted into grants on achievement of certain targeted reforms.

Kamal Nath

Capacity building within Urban Local Bodies (ULB), in areas such as public private partnership and planning, is a top priority and the intention is to put in place infrastructure to strengthen ULBs. At our meeting with Kamal Nath, he confirmed that 100% of the cost of capacity building training programmes will be funded under JNNURM Phase II, and a larger amount will be allocated for capacity building than in Phase I. He also advised that Phase II will have a heritage fund, and that consideration would be given to a sustainable master plan fund also.

JNNURM National Conference

As Prime Minister Manmohan Singh emphasised in his inaugural address at the JNNURM National Conference in New Delhi on 13th December 2011 “City planners must rethink traditional concepts of town planning. Master plans in the past did not consider spatial requirements for living and working for the poor. This must change, and change fast.”

Speaking at the JNNURM National Conference, Mr Nath said lessons learned from Phase I will be used to improve the model for phase II (read more by following this link to press information Bureau Government of India release dated 13th December  2011 http://www.pib.nic.in/newsite/erelease.aspx?relid=78628)

Cities and GDP growth

Urban India contributes two thirds of GDP. As urbanisation increases (the urban population is currently approximately 30% and it is expected to reach 40% by 2021) leveraging this change presents a significant opportunity for development and growth. However, the challenges of such rapid urbanisation are immense and it is vital that infrastructure development keeps pace to achieve the targeted 8-10% GDP growth.

Despite the success of JNNURM Phase I, there is a huge gap between the requirement for and current provision and availability of infrastructure and services across many states. This needs to be addressed.   Recognising this gap, states and ULBs have been asked to feedback views on Phase I, ways it can be improved and the future strategy for Phase II.  Key barriers cited by towns and cities in accessing JNNURM funding in Phase 1 include the need to collect circa 85 % of property tax, and to hit a target of 80% collection of user charges.

However, Minister Nath is keen to emphasise the importance of ongoing reforms. Speaking at the National Conference he said that  “just funding through a scheme will not bring about change, reforms are needed in project implementation to ensure that urban infrastructure and service delivery improves in not only tier I cities but in tier II and III  cities and towns also”.