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URBAN RENEWAL
Mission not accomplish-able Still dodging the constitutional requirement for devolution of powers to local bodies, the Centre is now demanding that cities fall in line with the 74th Amendment. The National Urban Renewal Mission is deeply flawed, and civic groups that have proposed steps to rectify it should be heeded, writes Kathyayini Chamaraj. 
29 July 2006 - The Centre's Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is being talked about as manna from heaven for the nation's mega-cities bursting at the seams. The Rs.125,000 crores promised under the program, it is hoped, will provide relief from the grid-locked traffic, overflowing garbage, choked drains, queues for water, filthy slums, tattered tents of migrants on pavements, and more. These changes are certainly needed, but can JNNURM deliver them? Centre's role - enabling, but contradictory The rationale is that cities are currently inefficient in raising resources to meet their growing needs; governance in the cities is also not adequately geared to respond to the challenges. The Centre's twin-track response to this is to bail out the cities with funds from New Delhi, but link these funds to conditions - cities must carry out certain governance reforms (some mandatory and some optional) which will make them self-sustaining and efficient in the future. For this, the Centre has set up a sub-mission on Urban Infrastructure and Governance. The Centre is also under pressure to ensure that the Millennium Development Goals - for halving hunger, reducing poverty and ensuring water and sewerage to all - are reached. With 23.6% of the urban population in the country being below the poverty line and 14.1% living in slums, providing Basic Services to the Urban Poor (BSUP) is the objective of the second sub-mission under JNNURM.
The enabling role that the Centre is attempting, however, contains significant contradictions. One reason that cities now have inadequate finances to improve themselves is that they have not derived the necessary funds from higher levels of government. Both the Centre and the States have paid little attention to finances of local governments, preferring instead to keep revenue control with themselves. As per the recommendations of State Finance Commissions (SFCs) set up under the 74th Constitutional Amendment (CA), cities should have got a fair share of the funds with the states, but this has simply not been happening. Most recommendations of the SFCs are gathering dust on the shelves of the government.
Anachronistically, the very first mandatory reform suggested under JNNURM is the implementation of the 74th CA; only cities that implement the amendment will be eligible for NURM funds! These are the very same funds that were supposed to be given to cities as untied funds for them to use as they wish, with no strings attached, as the very spirit of the 74th CA is that local bodies should become bodies with a will of their own. Cities at fault too But one has to also accept that, like self-willed but immature children, city governments are not doing all that they can for their citizens; hence a little bit of disciplining might be perfectly in order. The current bane of all municipal budgeting is that it gets hijacked to serve the interests of the elite (in urban infrastructure it goes mainly to support the needs of the private car-based economy) in the form of fly-overs, expressways, etc., a la big dams in rural areas. The Bangalore Mahanagara Palike (BMP), for instance, routinely budgets funds for slum improvement which never get used. The building of convention halls, shopping arcades, multiplexes and golf clubs with JNNURM funds is currently on the priority wish-list of Karnataka. Considering the state of many municipal accounts, wherein the opening balance often does not correspond with the previous closing balance and audits have not been conducted for decades, there may not be much opposition from the people to the Centre imposing some 'technical' conditionalities, such as the adoption of a Fund-Based Accounting System (FBAS), e-governance and GIS for universal property tax coverage, etc., though some activists fear elite manipulation in this too. Not all conditionalities are the same But conditionalities which impose contested policy changes - such as those prescribing on what items money can be spent; making full collection of user fees for public services mandatory (without a clear enunciation of a policy regarding these for the urban poor); requiring repeal or introduction of certain laws, such as the Urban Land Ceiling Act; initiating public-private-partnerships for public services - appear to be a direct infringement of States' freedom, and the spirit of the 74th Amendment. Critics see the imposition of conditions on municipalities to privatise their services as "seriously undermining the federal and democratic nature of decision-making in India". Dr. A Ravindra, former Chief Secretary of Karnataka, says states were not even allowed to choose the cities which were to benefit from JNNURM. This is a gross violation of the federal nature of Centre-State relations, and a return to centralisation rather than decentralisation, he felt. Privatisation of public services, usually done through public-private partnerships, is especially controversial. There is no mention in JNNURM of a policy for the urban poor - whether certain services will continue to be provided free to them, for instance, a minimum quantity of water for subsistence, as a human right. The governments' refrain has always been, "From where will the funds come, unless we bring in private investment?" But well-documented examples from Latin America show that privatisation is not a panacea, and that there are other ways of overcoming the states inefficiencies and corruption, e.g. through citizens' cooperatives that run the services. Opponents of privatisation also ask, 'if obligatory functions of the state, such as water supply, solid waste management, primary education and primary health care, etc., are to be privatised, then what are taxes for?' Dodging mandatory reforms But will the conditionalities be met? JNNURM does not appear to care very much. The Mission asks that a vision document for each city, as well as City Development Plans (CDPs) be prepared through multi-stakeholder consultations. In Bangalore, nothing of this sort happened; the BMP conducted ad-hoc consultations on May 6th, which were attended by about 25-30 persons from each Range of three to four wards, and the urban poor were hardly represented (a councillor claimed that he was there to represent the absent urban poor's interests). Going by the perfunctory nature of this consultation, how is it going to be ensured that all stakeholders' views will be adequately taken into consideration? Critics point out that the plans are being made without clear "process guidance, adequate and up-to-date planning data, advocacy with stakeholders and their capacity building in order that they may participate effectively". The linkage of the current plan with other statutory plans is also not clear, though congruence between all plans is promised, warn critics. For instance, what happens in cities such as Bangalore, where a CDP was already prepared for the BDA by foreign consultants in a top-down manner with no inputs from the people? Is it going to be abandoned after it has swallowed crores of rupees? This time around too, under JNNURM, other empanelled consultants are waiting in the wings to put together the new CDPs prepared largely by bureaucrats but supposedly as per the suggestions of a handful of residents at the token consultations. Similarly, as per the 74th Amendment, planning is a function of District Planning Committees and Metropolitan Planning Committees. These have not even been established in most states - a gross violation of the Constitution. If these are not made functional before the City Development Plans are finalised under JNNURM, the legitimacy for the ad hoc planning process is questionable. No funding for basic needs Among the items for which no funds under the JNNURM can be sought are primary health, primary education, employment opportunities and social security in short, the very items that need focus to foster human development to meet the MDGs - and not just economic growth. Currently, the urban poor are forced to go to private schools and hospitals that they can ill afford because public provisioning of these is in shambles. These may be the areas that a city would like to invest in, but these are to be financed only through the existing departmental budgets which everyone knows are inadequate. Similar exclusions abound. Land is being freed to ensure that investment funds flow towards the high-end sectors, but land for securing the livelihoods of the urban poor by providing the space for carrying on their trades, etc. is missing. Social security is to be provided under 'existing universal schemes', but there are no such schemes for the unorganised poor. The most crucial element of JNNURM, however, is the requirement for the local bodies of mega cities to raise 50% of the funds themselves and for the State governments to cough up another 15%. Only then will the 35% in the form of grants from the Centre under JNNURM be released. Considering that the BMP prepares illusory budgets year after year - it has prepared a budget for 1,870 crore for 2006-07 though it was able to raise only Rs. 912 crore (58.47 achievement %) from all sources against its desire to spend Rs. 1,575 crore in 2005-06 - the big question is: from where will BMP raise the Rs.7000 crores (50% of Rs.14,000 crores allotted to Bangalore) in the next seven years? BMP raised only around Rs.258 crores in 2005-06 from property tax. It was able to raise about Rs.205 crores in the form of loans in 2005-06. According to sources within BMP, the property tax from three of BMP's 30 Ranges is already going towards interest payments on loans. In 2005-06, the BMP was able to raise only about Rs.77 crores towards repayment of long-term loans. One can imagine the fate of the BMP if it has to pay interest on Rs. 7,000 crore to get the money under JNNURM. The only other alternative will be for the citizens to tighten their belts and be prepared to pay higher property taxes, cesses, users' fees, privatisation costs, et al, if they want their wish-list for Bangalore to be actualised.
Critics feel that the Centre knows that the cities will never be able to raise their share. And if the fate of crores of rupees promised by the Centre to the state governments under Sarva Shiksha Abhiyan, which have lapsed - because the states failed to provide their share of 20% - is anything to go by, the State governments may not be able to cough up their 15% share of the funds for JNNURM either.
So, how will the Mission work, if the states lack the funds needed to participate and don't have the desire to implement the necessary changes? Activists fear that the real intention of the Centre in dangling the promise of Rs.125,000 crores is to force the local bodies to undertake the neo-liberal reforms that it wants them to, viz. free the land market, undo the checks and balances that prevent concentration of land in the hands of a powerful few, recover full O & M costs through users' fees, etc. Another intent may be to force local bodies to go with a begging bowl to International Financial Institutions to raise their share of funds. These institutions - who are currently the shadow players behind the Mission - will, in turn, demand their pound of flesh, usually further conditionalities to privatise public services. There is also the benign talk of providing security of tenure to slum-dwellers. Critics fear that this very commitment may be used to disqualify and evict several alleged 'illegal' slum-dwellers on the possible ground that they have migrated after arbitrarily set cut-off dates, or that they are tenants or sub-tenants, and lead to new forms of exclusion. Since demolitions and forced slum evictions in the major cities have met with loud outcries and even reprimands from the UN, the tactic appears to be to camouflage the same intentions under a shiny wrapper of benign benevolence. It is significant that the JNNURM document nowhere gives an assurance that evictions and demolitions will be stopped, which is a solemn commitment made by the UPA in its Common Minimum Programme.
Doing it right But all this need never be. For JNNURM, it is still possible to implement the mission in accordance with constitutional provisions, and in a truly enabling way. Many civic groups have proposed steps to ensure this, among these steps are that:
Kathyayini Chamaraj
Kathyayini Chamaraj is a Bangalore based freelance journalist and a Trustee of CIVIC, a city-based non-government organization. Also see JNNURM advisor Ramesh Ramanathan's response to this opinion, published simultaneously. 
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Please note: This article, and Ramesh Ramanathan's response to it, are published simultaneously. The comments below are included in both of these articles, to help readers see responses to both views together.
Comments (5)
Urban Renewal Mission - New wine in an old bottle? In the present context of all-round development aimed at increasing the economic growth rate and clocking the GDP at double digit growth and not to lag behind the Hindu growth rate, the government at the centre is coming up with so many policy options and pronouncements. But many of the initiatives have turned out to be political rhetoric and compulsions of coalition politics, because the announcements regarding the new programmes aimed at maximising the factors of production are lacking in structural strength and plagued by systemic weaknesses. This is clearly emphasized in the budget announcement made by the Union Finance minister in the last budget regarding the National Urban Renewal Mission "The demographic trends in the country indicate a rapid increase in urbanization. India needs urban facilities of satisfactory standards to cope with the challenge. If our cities are not renewed, they will die. The National Urban Renewal Mission is Urban Renewal:(n) Rehabilitation of impoverished urban neighborhoods by large-scale renovation or reconstruction of housing and public works. The above definition, states that rehabilitation, renovation, redevelopment, replanning and reconstruction and all forms the basis for Urban Renewal. If that is going to be the idea behind the Mission announced by the Central government and going to be executed by the state governments of the concerned cities and towns what is the basis on which the identification of projects and its execution is going to be carried out? In the paper on Government of the United progressive Alliance Report to the People I, Implementation of National Common Minimum Programme and Other Initiatives May 2004 February 2005 it is listed as follows: VII: Urban Renewal - The rapid process of urbanization has increased the salience of towns and cities in the Indian economy. However, to deal with the consequences of unplanned urban development the government will launch a National Urban Renewal Mission to upgrade urban infrastructure, increase civic participation in urban infrastructure and implement a targeted programme to ensure basic entitlements for all. The above paragraph is a jarring note on the question of what is urban renewal itself. The report card to the people identifies upgrading urban infrastructure as Urban Renewal but it is not. This is purely urban development. Urban renewal per se is redevelopment, preservation, rehabilitation, replanning by means of rationalization. The Urban Renewal Authority established by an ordinance in may, 2001 in Hong kong cites the main objectives of the urban renewal as: Certainly, the objectives of the Hongkong Urban Renewal authority are not utopian or impossible but has a clear vision and a mission, structurally and legally. The National Urban Renewal Mission as proposed by the central government does not have the mechanism or willingness to establish one if the goings-on are to be understood in the right way. Keeping the National Urban Renewal Mission and the Rs.5500 crore budget made for this mission the planning commission has initiated a If we foresee other indications, there is no guidelines either from the central government or the state governments to deal about urban renewal in their cities, then we do not know what fate this mission will accomplish. If the argument in favour of this project is that the application of technology is going to increase the environmental sustainability and increase the livelihood, then the counter weight is that this utility value is comparatively going to be less than concentrating on the objectives as set out in the Hongkong Urban Renewal Authority. The rich and the well to do have the bargaining power and capacity in That should be the goal of National Urban Renewal Mission, then the godliness of the phrase mentioned in the UPA document" increase civic participation in urban infrastructure and implement a targeted programme to ensure basic entitlements for all" Is it not the responsibility of the Finance Minister to ensure the above ethos and objectives as the main strategies for the laudable National This mission speaks good but the exceution and benefit may not be so good as expected. By this mission and implemation of e-governance and double entry system, there would be some curtailing of corruption but what will a poor man residing in the city as slum dweller and below proverty line will get from this? Improvement of the road, drain, bye passes, overbridges etc may not help the poor at any cost unless they are being provided with shelters. Can effective urban waste management be a precondition for JNNURM funds? It is deeply distressing that Karnataka has passed a law requiring ALL local bodies (even those with 20,000+ population) to go for Municipal Waste To Energy schemes. These are not only unviable except at institutional and small community levels, but the RDF (Refuse Derived Fuel) models being touted are "burn" technologies which violate the SAARC Recommendations 2004 at Dhaka, to which India was a signatory. These state "4. SAARC countries agree that incineration as well as unproven technologies such as Plasma, should not be considered as an option for the treatment of their municipal solid wastes for low calorific value and environmental pollution potential." and Funding under JNNURM should not be based on population. Let each state identify Towns,cities which qualify for the fund. A small town economically vibrant and requires urgent intervention to regulate the growth must be permitted to access fund under JNNURM. Stop cities accessing funds for projects of capital investment. |
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I stand corrected. Rs.14,000 crores has not been allocated to Bangalore but is the wish-list prepared by Bangalore Mahanagara Palike (BMP) that was circulated to citizens at the 30 Range-level consultations. Mr. Jawaid Akhtar, MD of Karnataka Urban Infrastructure Development and Financing Corporation (KUIDFC), the nodal agency for implementing JNNURM in Karnataka, says that what Bangalore is likely to get is about Rs.1000 crores only, which is roughly equivalent to one year's budget of BMP. In the light of this, it really seems that JNNURM is much ado about very little.