Looming ahead on the horizons of all these individual efforts is the National Urban Renewal Mission. With its sweeping scope, NURM will certainly impact many of these schemes in a big way; thus it is important to understand this mission, and its implications for the abundant ongoing schemes around the nation. Will NURM curb the exclusivist tendencies of the individual programs and bring in more citizen participation, or will it worsen the already poor record of these programs on civic engagement?

The National Common Minimum Programme (NCMP) adopted by the UPA govt in May 2004 included a single paragraph on urban issues, which states the intention of the government to launch the National Urban Renewal Mission. This has now crept up on us in a rather nebulous shape, catching many citizens of urban India unaware of the myriad nature and implications of this mission for our cities. The broad agenda of the NURM is purported to be to strengthen democratic governance structures and decentralisation in urban local government, though it has still not been clearly articulated by the Ministry of Urban Development or the Ministry of Urban Employment and Poverty Alleviation how this mission will be implemented to meet this objective.

Some of the directions for these ministries are, however, now known. The Mid-Term Appraisal (MTA) of the 10th Five Year Plan was discussed by the group of Ministers who accepted it in July 2005; according to the MTA, the ministries will go about implementing the urban reforms agenda in the following manner:

• Merge all schemes of the Government of India for urban infrastructure and civic amenities. In future, make normal levels of assistance available on a platform of reforms. Such allocations would be conditional on urban reforms being carried out by the state governments and the urban local governments [ULGs].

• Take up the 35 cities with million-plus populations, the capital city in every state, and a small number of other cities that are of historical importance (about 60 cities in all) for a considerably enhanced level of Plan assistance through the National Urban Renewal Mission.

• Undertake reforms in urban land ceiling laws, rent control acts, and stamp duties (all supported by the Urban Reforms Incentive Fund that has been in place for some years now) in order to unleash housing activity in the urban areas. For the urban poor, a three-pronged approach is needed, involving availability of land, cheap and easy credit, and promotion of low cost building materials and technology.

The National Urban Renewal Mission

NURM is to be a reforms-driven, fast-track, planned development of identified cities with focus on efficiency in urban infrastructure and services delivery, community participation, and accountability of local governments towards citizens. The following broad framework is proposed for the Mission:

• Central sponsorship

• Sector-wise project reports would be prepared by identified cities listing projects along with their priorities.

• The funding pattern would be 35:15:50 (between Centre, States/ULGs and financial institutions) for mega cities (>40 lakh population), 50:20:30 for cities with populations between one and four million, and 80:10:10 for other cities.

• The grant assistance (both Central and State) would act as seed money to leverage additional resources from financial institutions/capital market.

For about 5000 other (non NURM) small and medium sized towns the Urban Infrastructure Development Scheme (UIDSSMT) is to be the main driver; for this scheme funding will be in a tripartite pattern based on infrastructure needs. These towns will be required to implement the following urban reforms, by making eligibility for funding conditional on such changes.

1. Implementation of decentralisation measures as envisaged in the Constitution (Seventy-Fourth Amendment) Act to establish elected ULGs as institutions of self-government.

2. Adoption of modern, accrual-based double entry system of accounting in ULGs.

3. Passage of a "public disclosure law" to ensure preparation of medium-term fiscal plans of ULGs and release of quarterly performance information to all stakeholders.

4. Passage of a "community participation law" to institutionalise citizen participation and introducing the concept of the Area Sabha in urban areas. (One potential wrong turn here is that such a law itself would need to be developed through citizen inputs, and might otherwise run contrary to its own objectives).

5. Transferring all special agencies that deliver civic services in urban areas to ULGs over a period of five years and creating accountability platforms for all urban civic service providers in transition.

6. Introduction of e-governance using IT applications like Geographical Information Systems and Management Information Systems for various services provided by ULGs.

7. Reform of property tax with GIS, so that it becomes a major source of revenue for ULGs and arrangements for its effective implementation to ensure that collection efficiency reaches at least 85 per cent within the next five years. Complete revamping of the property tax system through detailed data gathering process, tracking and monitoring system.

8. Levy of 'reasonable' user charges by ULGs on many services that are currently free, with the objective of recovering the full cost of Operations and Management within the next five years.

A number of these proposals are to ensure functional autonomy for local bodies as much as possible. This focus is one that is needed, and surprisingly so. The State governments have for a long time argued that New Delhi does not sufficiently share its resources with them, and thus corners too much power for itself by controlling the purse strings. But this is the same complaint that panchayats and municipalities have made against the State governments for a long time! Most state governments have shied away from implementing several provisions of the Constitution (Seventy Fourth) Amendment Act, 1992, which envisaged a decentralised governance structure at the local level. In Kerala, for example, a panchayat is now arguing before the Supreme Court that it should have the right to regulate water use in its jurisdiction, an argument that would be unnecessary if true devolution had been in place.

The important topic of urban governance is subsumed by the chapter on Urban Infrastructure in the MTA of the 10th five year plan which the Planning Commission released in June 2005. The section on NURM does acknowledge "that community involvement leads to effective implementation of projects, to better designing and reduction of operational costs".

The tenth plan has acknowledged that there is a pressing need for capacity building of municipalities through training of elected and appointed officials and by restructuring of ULBs for efficient management of civic services. And towards this end a lot of funds are annually sanctioned to states governments but over 50% of these funds still lapse unused.

Public services, minus the public

The most tangible impact of the activities to be initiated with funding from the NURM for the urban citizens will be in the form of City Development (Strategic) Plans, to be prepared by local governments in urban areas that are to be NURM-compliant. The development of these CDSPs has begun almost silently, and there is yet to be any public information, awareness or consultation regarding the plans or their preparation process. According to the NURM guidelines these have to be prepared after conducting a wide stakeholder consultation process, and to be preceded by the identification of a planned urban perspective framework for a period of 20-25 years.

This CDSP in the case of Bangalore and other cities is meant to integrate land use with services, urban transport and environment management. Based on eligibility and the funding pattern, the Bangalore Mahanagara Palike is likely to be eligible for about Rs.500 to Rs.1,000 crores in 2005-2006. Unfortunately, without official public hearings, proposals are being finalised in the application format. The Metro rail project too - according to the Union budget this year - would be supported under the NURM funding by the central government.

The Central government is setting conditionalities and state governments so that NURM cities would have to undertake all the mandatory reforms within the prescribed time frame, with the "freedom" to opt for any five other items listed as optional (see box). The state governments and the identified cities would then have to execute Memoranda of Agreement with the Government of India and ensure that such reforms are actually undertaken. The tripartite MOAs would be submitted along with Detailed Project Reports. If state governments are now making proposals under NURM terms, then it is assumed that they have accepted some of these reforms, since that is one of the conditions. But which ones? Without public consultation or disclosure, there is no way to tell.

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It appears that through NURM the Centre is now creating an environment where it can direct the administration of big and small cities in a way that it could not do through the 74th Amendment, which was interpreted by each state based on its own policies and reflects a broad diversity of thinking on this issue. It is true that cities do need substantial investment in infrastructure to improve urban quality of life indicators for its citizens. Nonetheless, linking reforms by the States and ULGs to funding grants and loans is a highly coercive route being adopted in total contradiction to the "subsidiarity principle", proposed by a consultation paper of the NAC.

The conformity acts of all states already encourage preparation of an annual development plan that encompasses all aspects including water supply, sanitation, drainage, sewerage and urban transport. Metropolitan planning committees are also to be formed now in at least 35-40 cities that have more than a million residents. These committees would prepare draft development plans for the entire metropolitan areas, integrating annual panchayat and urban plans. Not much mention of all this is made, while an entirely new plan process (CDSP) is being initiated that would take up virtually the same tasks.

An incentive-based reforms agenda is a risky one, because its failure would represent not only lack of development to fulfil the needs of citizens, but also a foreseeable failure of governance, in not adequately including citizen inputs. For better or worse, NURM will change the way that our water supply systems, urban transport, roads, culverts, drains and bridges are built, the way slums are developed, etc. but without watchful input from citizens, the principle of incentivising change might collapse under its one big contradiction - the creation of public services and spaces without consulting the people. ⊕

Vinay Baindur
05 Sep 2005

Vinay Baindur has been Programme Coordinator for CIVIC Bangalore for the last eight years.

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