Ms. Chamaraj's article on the Jawarharlal Nehru National Urban Renewal Mission (JNNURM) is welcome for many reasons: first, it is an in-depth study of the Mission and its various components; second, it makes critical observations about various gaps and weaknesses in the Mission; third, it suggests remedies that could be undertaken to make the Mission more effective, and is therefore constructive in nature.

My responses to the article are from the perspective of the role that I play in the Mission, that of being part of a group called the Technical Advisory Group, whose role is to advise the various formal components of the Mission, to ensure citizen participation and transparency in the mission's activities. I have divided my comments into two sets: the first, on specific points made in the article, and the second, some general observations.

Specific Comments:

  • JNNURM is made of 2 sub-missions, one on urban infrastructure and governance, and the other on poverty. Both these need to be seen together, since both are linked by the reforms and other common processes; it is not that only one of them is related to reforms.

  • There is a healthy tension that is constantly being tested, with states and cities pushing back on areas where they find the centre over-intrusive.

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    The observation that city finances are significantly affected by poor transfers via State Finance Commission grants, due to a variety of factors related to the functioning of SFCs, is a very valid one. However, improved SFC grants are not a sufficient condition for improving a city's overall finances; the city's own sources of revenues need substantial improvement as well - property taxes being the primary source, but also various other sources like building and trade licences, advertising, parking etc. Currently, the compliance rates on these are abysmally low. My colleague in TAG, Prof O.P.Mathur,has this to add, "SFC grants and transfers, even if carried out, would not improve matters. These are calculated so as to remain essentially at par with the grants that were made in the pre- 1992 period (in real terms)."
  • JNNURM funds are NOT the same as SFC transfers, as suggested by the author. JNNURM funds are what are called Additional Central Assistance (ACA), funds of the Union Government, which are being made available in a discretionary manner to cities. SFC transfers are to do with the transfer of state government funds to local governments. Hence, there is no magic mirror work being done with the numbers in JNNURM - these are genuinely new sources of funding for urban improvement.

  • The types of projects that can be funded by JNNURM does not include the items that the author has indicated, in her example related to the Bangalore City Corporation (BMP). There is already evidence of the kinds of projects that JNNURM has supported, since the Mission is up and running. This could give insights into what types of projects are being funded. Certainly, golf courses, shopping arcades and convention centres will not find place.

  • The issue of the centre over-reaching its federal role is a valid one to raise, and requires continuing discussion. With JNNURM, the Union Government has unequivocally answered the one tricky question that has kept it out of city issues, despite the fact that urban breakdown was visible to all: why should the Centre get involved, given that urban issues are a state subject, especially with limited resources and large rural demands?

    The answer lies in the acknowledgement that the challenges facing urbanisation in our country cannot be solved exclusively by city governments alone, or even just with the leadership of the concerned state governments. Comprehensive urban governance reforms are required on a number of fronts - devolution of funds, functions and functionaries to local governments, basic services to the urban poor, urban planning, formalising citizen participation, urban land reforms and so on. It has become obvious that simple band-aid responses are not going to suffice. However, our cities cannot make this transition by themselves. They need assistance in many forms: financial, technical, legal and so on. State initiatives so far have been fragmented, sporadic and incomplete. What was needed was an unapologetic and substantive national initiative that offered a supporting hand - previous union initiatives have been tentative and insubstantial.

    Sheela Patel, who is also a member of the TAG group for JNNURM, says, "What the Urban Ministries are doing is finally coming on par with other ministries such as rural development, education, health and panchayati raj... creating a national framework for reform in the urban sector. This delayed but late start has its own problems of creating and institutionalizing rituals, practices and expectations, with state governments, cities with civil society. Engaging with the process by all is crucial to guide this process."

    However, Ms. Chamaraj raises an important question about how much detail can the centre go into without running foul of the federal lakshman rekha. The quote of Dr Ravindra's about selection of cities is possibly an example of over-reach. My own experience having been in discussions as part of TAG is that there is a healthy tension that is constantly being tested, with states and cities pushing back on areas where they find the centre over-intrusive.

  • As far as the implementation of the reforms is concerned, the criticisms about the processes are very important, and need to be considered seriously by the centre. There is real danger that states will do lip service about how the CDPs and DPRs are to be created, with minimal consultation in the manner that has been originally conceived, that these plans and proposals actually emerge from the grassroots.

  • There is a comment about sectoral allocations, there being no allocation for healthcare, employment etc. The reason no funds have been allocated is because these are in the domain of other Ministries, and the two Ministries running JNNURM are confining themselves to their functional areas.

  • There is real danger that states will do lip service about how the CDPs and DPRs are to be created, with minimal consultation in the manner that has been originally conceived.
    Ms. Chamaraj provides detailed financial estimates for Bangalore, and its share from JNNURM. These indicate that Rs.14,000 crores will be "allocated to the city"; I assume that what is meant is that 50% of these funds will come from the Centre. I am not sure where these numbers are coming from, since there is no city-wise allocation under JNNURM. Cities are meant to qualify for JNNURM support, through a Memorandum of Agreement (MOA) and CDP process, after which qualifying projects will be evaluated. There is no quota for each city. Even if there was one, it is unlikely if not impossible that Bangalore will get 15% of the entire pool of Rs 50,000 crores under JNNURM, when there are total of 63 cities under the Mission. It is likely that the city has a wish-list of Rs 14,000 crores of projects, but only a small fraction of these are likely at best to be supported under JNNURM, primarily because many of these projects may not even qualify for funding (like shopping malls and golf courses!). Also, every project that is being supported under JNNURM is being examined in light of not only its financing, but also the total fiscal impact that is being created on the city as a whole.
  • Many of the suggestions to improve JNNURM are important, and need to be taken up by the Ministries concerned; those that concern the TAG will be taken up by us. Some of these suggestions are already under way. For example, the TAG is working with the Ministry of Urban Development to ensure that there is complete transparency in all documents, and detailed information is being placed on the Ministry's website. While many of the documents are available already, we want to make this a much more comprehensive and user-friendly process. Also, state-level TAGs are being set up, to ensure that participatory mechanisms are in place, ideally before the CDPs and projects are prepared, but definitely over the medium term, so that community participation is not a one-time affair, but a continuing way of how cities are run.

General Comments

In summary, the article makes many important criticisms of JNNURM. Unfortunately, there are no words of credit for the Mission. Those who believe in democratic processes must recognise that a legitimate national government - incidentally, the very same level in the federal set-up that initiated and passed the 74th Constitutional Amendment, whose implementation is being demanded by everyone today - has promoted JNNURM. It has announced the Mission after a substantial due process of consultation with state governments - this may not be to the extent that pleases all, but there certainly has not been unbridled unilaterism in the process.

Many of the reform elements are the same ones that will ensure decentralisation, participation and transparency in a sustainable manner - the reform conditions ensure that the 74th CAA is completed, that District Planning Committees and Metropolitan Planning Committees are set up, that there are laws for community participation and disclosure, and so on. I am reasonably confident that a few years, we will be demanding that Area Sabhas are not being set up correctly in some city or state in the country, and this must be addressed.

Are there flaws in the Mission - the answer is yes. Will there be mistakes when the Mission is getting rolled out - absolutely. One question to ask ourselves is, "Is there a superior alternative to JNNURM? If so, what is this alternative?" We can either have a perfect theoretical Mission (which incidentally no one has articulated), or we can have the best imperfect solution that we can currently conceive, through the collective and well-intentioned efforts of a large number of stakeholders. I believe that this is what JNNURM represents. It is our best hope for Urban India. It requires all of us to engage with it, to make it better than it currently is. And this is where I appreciate how Ms. Chamaraj's article ends - it makes concrete suggestions for improvement.