Little has changed in urban India

The Jawaharlal Nehru National Urban Renewal Mission, or JNNURM, is unique in some ways. It was the first large development initiative to specifically focus on urban India.

Till then the politically correct stance was that India lived in its villages. JNNURM signalled that the city, as an engine of growth in the post-liberalisation era, had arrived.

Second, the idea for the mission came from a coalition of experts from civil society and the corporate world. Third, reform and the need to deliver it were written into the project. Perhaps most dramatically, in a system in which new ideas move glacially, from the first presentation to the Planning Commission in October 2004 to the inclusion in Budget speech of 2005 the idea had a gestation period of not years but months.

Now that JNNURM has completed its designated life of seven years, it is important to see how well it has fared. Fortunately, the mission can be assessed both top-down and bottom-up - the latter, visually and anecdotally; and the former, administratively, through a new report of the comptroller and auditor general, or CAG.

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The primary movers wanted the mission to reform property tax, adopt fund-based accounting, ensure citizens' participation in urban governance, be high on disclosure and put at the centre of city government an elected municipal body under which would function the parastatals delivering different services.

In reality, things went like this. Tripartite memoranda of agreement were signed between the Centre, state government and urban local body concerned to carry out 23 reforms, 13 of them mandatory. Thereafter various reforms progressed varyingly.

The overriding aim of states and ULBs was to tick off items on a list to be able to continue to receive funding, irrespective of whether reality on the ground changed. Unsurprisingly, visually and anecdotally, little has changed in urban India.

There are some flyovers, JNNURM logo-bearing buses and terribly designed housing for the poor. That's it.

Under the expense-sharing formula, the Centre was to spend 50 per cent, or Rs 50,000 crore [Rs 500 billion] (later raised to Rs 66,000 crore [Rs 660 billion]), of a total foreseen expenditure of Rs 1 lakh crore (Rs 1 trillion). It has made a budgetary allocation of Rs 45,000 crore (Rs 450 billion), but disbursed just over Rs 40,000 crore (Rs 400 billion).

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Of the projects approved till 2010-11, only 8.9 per cent have been completed. Consequently, the life of the mission has been extended by two years, to 2013-14.

There was delay down the line - in release of central funds, onward release to ULBs with matching state funds, and finally in release of funds by ULBs to specific projects. As to how the money has been spent, at given points, utilisation certificates were outstanding for a total of Rs 10,000 crore (Rs 100 billion).

Programme management units were to be set up in every state to help the state-level nodal agency with project appraisal as well as monitoring of projects and reforms.

These units were not set up in several states; where they were set up, they didn't do all that they were supposed to do.
To ensure planned development, a 20- to 25-year city development plan was to be prepared and periodically updated. Also, detailed project reports were a must.

The bottom line was: no DPRs without a CDP, and no funds before the two were done. The CAG's audit found that some DPRs were inadequate, and there was no link between some of them and the relevant CDP.

For a scheme of such magnitude, the two nodal ministries created no new posts. As staff was simply redeployed, monitoring suffered.

Naturally, the urban development ministry is quite modest about its performance. It told the CAG that such a reform agenda was a "huge challenge" and "too ambitious" a task for seven years. It also said that the attempt at reform had revealed major lacunae in the capacities and resources of ULBs, with larger cities faring better.

On specific reforms, the only one that seems to have been carried out somewhat comprehensively is conducting regular elections to ULBs. Delegation of powers to them, including city planning functions, had made uneven progress.

On switching to a double-entry, accrual-based accounting system, there is a mismatch between success claimed and reality on the ground. Not every organisation claiming to have switched prepares accounts on that basis.

Administrative reforms have taken place in only one-third of the states. About half the states specifically examined have achieved 85 per cent of coverage in property tax.

Ninety per cent efficiency in collecting taxes has been achieved in only 10 out of the total states examined. In some areas reforms have made no progress at all. One is property title certification. On simplifying conversion of agricultural to non-agricultural land, the urban development ministry has cried off, saying that this is a state subject.

The ministry has claimed that 23 states have enacted community participation legislation, but their names have not been given to the CAG. Sixteen states said they will reform their rent control laws but have not done so.