JNNURMFormulation, Achievements and Failures

By-Bikram Ghosh (2012CEC2941)

Revathi T (2012CET2232)

AGENDA Introduction to JNNURM – Background, Objectives, Scope and

Strategies

Framework and Process

Appraisal of JNNURM – key findings

Statistical Analysis under various schemes

Failures of JNNURM I – Causes and important lessons

Introduction to JNNURM II – Reviewed Objectives and Strategies

Comparison of the features between JNNURM I and JNNURM II

Present Implementation status of projects

The Road ahead…

INTRODUCTION “With urbanization comes the need to invest in infrastructure

and to improve the quality of life in our cities. Rapid urbanization

has not only outpaced infrastructure development, but has also brought

in its train a terrible downside - the downside of proliferating slums, the

downside of increasing homelessness, the downside of growing urban

poverty and crime, of relentless march of pollution and ecological

damage. This gives you an idea of the massive challenge that lies

ahead.” Excerpts of Speech by Dr. Manmohan Singh - Hon’ble

Prime Minister of India Launching the JnNURM

“Quite clearly, the cities and towns of emerging India, which is in the

midst of fundamental economic restructuring, will play a pivotal role as

centres of economic activity, competing with each other to attract global

investment, capital and business” Excerpts of Speech by Shri. S.

Jaipal Reddy - Hon'ble Minister of Urban Development,

Government of India . Ref. [12]

What is JNNURM Jawaharlal Nehru National Urban Renewal Mission

(JNNURM) is the single largest initiative of the Government of India for a planned development of our cities.

Launched in December 2005, it was the largest, and first of its kind, mission-led urban development programme with an estimated provision of Rs. 50,000 crores.

The initial duration of the Mission was seven years beginning from the year 2005-06.

Mission Statement: “The aim is to encourage reforms and fast track planned development of identified cities. Focus is to be on efficiency in urban infrastructure and service delivery mechanisms, community participation, and accountability of ULBs/ Parastatal agencies towards citizens.”

Ref. [1] [2]

Why JNNURM ? Need for Urban Sector Development

By the year 2021 it is expected that the share of urban population may increase to about 40% of the total population.

Also, it was estimated that, by the year 2011, urban areas would contribute to about 65 per cent of the gross domestic product (GDP).

Investment Requirements in the Urban Sector

A total investments of Rs. 1,20,536 crores was required by the Urban Local Bodies (ULB), which meant an annual funding of Rs. 17,219 crores was required, for developing the basic infrastructure services.

Hence, a national level initiative was required that would bring together the State Governments and enable ULBs to catalyse investment flows in the urban infrastructure sector. Ref. [1]

[2]

Key objectives of JNNURM Focussed attention to integrated development of infrastructure

services

Establishment of linkages between asset-creation and asset-

management

Ensuring adequate funds to meet the deficiencies

Planned development of cities to ensure dispersed urbanisation.

Scale-up delivery of civic amenities and provision of utilities

Special focus on urban renewal programme for the old city

areas

Provision of basic services to the urban poor.

Ref. [2]

SCOPE OF THE MISSION

Urban Infrastructu

re Governance (UIG)

Basic Services to Urban Poor

(BSUP)

SUB - MISSIONS

Urban Infrastru

cture Develop

ment Scheme for Small

and Medium Towns

(UIDSSMT)

Integrated

Housing and Slum Develop

ment Program

me (IHSDP)

SUB - SCHEMES

Ref [1]

STRATEGIES OF THE MISSIONPreparing the City Development Plan (CDP) indicating policies, strategies & programmes, and financial plans

Preparing the Detailed Project Report (DPR) for the identified projects

Release and leveraging of funds to State level Nodal Agency (SLNA)/ Urban Local Body (ULB)

Incorporating Private sector efficiencies through Public Private Partnerships

Ref. [1]

FRAMEWORKInstitutional framework

Policy oversight

National Steering Group (NSG)

Mission operationalisation

Sub-mission Directorates (SMD)

Central Sanctioning and Monitoring Committee (CSMC)

State Level Steering Committee (SLSC)

State Level Nodal Agency (SLNA)

Advisory support

Macro level to NSG and SMD

Micro level to CSMC, SLSC, SLNA, and ULB's

Technical Advisory Group (TAG)

Ref. [3]

PROCESS AND FUNDING PATTERN

Process flow

Sanctioning and

disbursement of

assistance

Revolving fund

Monitoring

Category

Population (2001

Census)

UIG BSUP

Central State Other

Central State Othe

r

A >4 Million 35 15 50 50 - 50

B 1-4 Million 50 20 30 50 - 50

CSelected cities/ UAs less than 1 Million

For NE and J&K 90 10 0 90 - 10

Others 80 10 10 80 - 20Ref. [3]

APPRAISAL OF JNNURM

Design

• Funding for cities in category A & B may be scaled down

• Smaller towns had some disadvantages as compared to larger cities

CDP

• CDP was not available in vernacular language

• CDP was not a statutory document as the master plan/ regional plan

DPR

• Most DPRs were not backed by Initial environmental studies(IES) or ESIAs

• Projects finalized in 2005 were not sanctioned until 2007

Project administration

• Coordination problems among the various state officials

Pre project activities

• Very few cities revised their CDPs

• While preparing the DPR, consultations with the stakeholders was limited.

Project Implementation

• PMU/ PIUs were not even set up by many states

• Parastatal agencies were overburdened by making them as PIUs

Reform Implementation

• No funds were earmarked for the implementation of the 23 reforms said

• Non cooperation from states for implementation

Project Monitoring

• As per the tool kit, the administrative positions necessary, were not filled

• There would be merit in considering individual project PMC.

Nati

on

al

level

Sta

te

level

Ref.[4] [6]

APPRAISAL OF JNNURMU

LB

level

Insti

tuti

on

al le

vel

Project preparation• Most of the ULBs did not have the mechanisms and the requisite skills to carry out project preparation and the states have engaged consultants to do so.

• Capacity building, perhaps the single most important activity required in the today’s urban sector scenario should be considered to be monitored by an agency similar to appraising and monitoring agencies for reforms and project.

National level

• Delays in project sanctioning mechanism, as many primers were added later

• Time given to the consultants to prepare the CDP is too short

State level

• Majority of the states had not constituted TAG at the state and city level.

• Majority of the states did not have either procurement policy or procurement manual

• PIUs lacked the required technical expertise

ULB level

• Minimum involvement of the ULBs in the preparation of CDP and DPR due to lack of in-house capacity

• There was no provision for the constitution of City Level Sanctioning and Monitoring Committee (CSMC) in JNNURM guidelines

Ref.[4] [6]

Andhra Pradesh

Assam

Chandigarh

Delhi

Gujarat

Himachal Pradesh

Jharkhand

Kerala

0.00% 20.00% 40.00% 60.00%

Percentage completion of projects under UIG Scheme as on 31.03.12

Percent-age comple-tion

Ref. [13]

Madhya Pradesh

Meghalaya

Mizoram

Odisha

Punjab

Sikkim

Tripura

Uttarakhand

0.00% 10.00% 20.00% 30.00%

Percentage completion of projects under UIG scheme as on 31.03.12

Percent-age comple-tion

Ref. [13]

Contd..

Andaman & Nicobar Is-lands

Arunachal Pradesh

Bihar

Dadra and Nagar Haveli

Goa

Haryana

Jammu & Kashmir

Karnataka

0% 10% 20% 30% 40% 50%

Percentage completion of projects under UIDSSMT scheme as on 31.03.12

Percent-age comple-tion

Ref. [13]

Madhya PradeshMaharashtra

MeghalayaManipurMizoram

NagalandOdisha

PuducheryPunjab

RajasthanSikkim

Tamil NaduTripura

Uttar PradeshUttarakhandWest Bengal

0.00% 20.00% 40.00% 60.00% 80.00%

Percentage completion of projects under UIDSSMT scheme as on 31.03.12

Percent-age comple-tion

A total of 76% of financial completion had been achieved in the said period. Ref

[13]

Contd..

FAILURES OF JNNURM (Arun Maira’s Report)

Lack of integrated planning at city and regional level CDPs ultimately reduced to just the investment plans for various

haphazardly selected stand-alone infrastructure projects, in place of being an integrated plan and a long term vision.

Lack of participation in planning Not all ULBs were involved in the preparation of development plans;

CDPs were prepared either by the state or the city development authorities in little or no consultation with the ULBs.

Lack of participatory planning resulted in programmes suffering from ‘lack of ownership’.

Exclusion of peri-urban areas This led to the unstructured development around the city boundaries

resulting in expensive modifications at a later date.

Process Heavy and Lack of coordination This resulted in a significant lack of coordination and delayed decision

making for the state officials, and thus the slow implementation of the programme.

Failure to adopt service level benchmarks  Resulted in sub-optimal quality of service delivery The absence of carefully drawn CDP along with its attendant financial

plan negated the good work done by MoUD in developing benchmarks for service delivery levels.

Ref.[9]

Contd.. Lack of adequate capacity

Implementation of reforms at the state and ULB/parastatal level suffered severely due to this.

Some of the problems due to this were that funds leveraged from the market were abysmally low, failure to roll out projects under PPP framework.

Lack of differential approach towards reforms The Mission adopted a one-size-fits-all approach for the reform

implementation across the states and identified cities. This resulted in significant mismatch in the progress of reform

implementation across the states, both in terms of physical and financial progress.

Delay in the implementation of 74th CAA and incomplete devolution of financial powers to ULBs Of the total 2840 projects sanctioned, worth Rs.1.15 Lakh crores, the

Central assistance amounted to Rs. 60,000 crores. This showed that there was a major inability to attract sufficient private investment through instruments like municipal debt, PPP, land monetization, etc.

 Poor planning and inadequate capacity of city management result in the unpredictability of municipal finances which in turn result in lack of investor’s confidence.

Incomplete reforms While significant progress was made in the completion of non-complex

reforms, the crucial, complex ones were yet to be completed Ref.[9]

LEARNINGS FROM JNNURM-1 A robust mechanism to ensure city level and regional plans

for holistic and sustainable development of the city is a must.

Adoption of service level outcomes as monitoring milestones, rather than merely the expenditure incurred under the programme.

Utmost importance shall be given to capacity building and it shall be made one of the sub-missions of the programme.

A suitable calibration of reforms and norms for cities of varying sizes and capacities is required.

Strengthening the finances of ULBs by devolving them financial powers along with a systematic development of their management and planning capabilities is required.

Ref. [9] [10]

Contd.. Completion of reforms formulated under JNNURM-1 has the

highest priority along with the development of a robust mechanism for evaluation of the progress of reforms.

Simplification of the processes for effective implementation of the scheme is necessary.

While the achievements under JNNURM-1 programme have set the foundations for a bolder programmatic initiative in the urban sector, the core objectives of the programme remained unfulfilled.

Thus, a new and improved JNNURM (JNNURM-2), incorporating the learning of JNNURM-1, was required. Hence, JNNURM-2 for a duration of 10years, beginning with a 2-year transition period (2012-14) was launched. Ref. [9]

[10]

OBJECTIVES OF JNNURM II

The key objectives of JNNURM II are as follows:

Removal of urban poverty

Improvement in urban services including basic services for urban poor

Empowerment of ULBs

Participatory and transparent governance

Effective management of land resources

Sustainable, inclusive and faster growth.

Ref.[9] [11]

STRATEGIES TO BE EMPLOYED Building adequate capacity, including the development and

training of municipal cadres.

Stress on planned development of cities: The CDPs and DPRs have given way to a ‘Development Plan’ (DP) which will be a vision document with a 10 year perspective.

Simplification of the processes by resolving overlapping domains and making the governance more efficient

Ensuring the accounting reforms at ULBs. Further the ULBs to make 10-year financial plans (FP)

Adoption of service level benchmarks to monitor and appraise the project outcomes

Planned development of small towns and peri-urban areas

Stress on innovation and learning across the urban system to build on the internal resources and strengths of the cities Ref.

[9]

Comparison of key features

Attribute JNNURM I JNNURM II Remarks

Duration 7 Years 10 Years

• Large number of projects for the first phase were pending• Preparation of DP and FP would require time, hence a transition period of 2 years (2012-13) was provided.

Schemes and components

• UIG, • BSUP, • UIDSSMT, • IHSDP

• UIG, • Rajiv Awas Yojana (RAY), • Slum rehabilitation in cities not covered under RAY, • Capacity building

• UIDSSMT was discontinued in phase II• UIDST (Urban Infrastructure Development for Satellite Towns) was merged with UIG• BSUP, IHSDP were discontinued

Ref. [6] [9]

Contd..

Attribute JNNURM I JNNURM II Remarks

Division of Outlay

•Separate outlays were not identified under this phase. •There was complete allocation towards base funds.

• Base fund (80% of the total funds)• Incentive Funds (10% of the total funds)• Capacity Building fund (10% of the total fund)

Capacity building

• Capacity building was kept under a mission directorate• Lack of fund allocation led to the lack of capacity building at all levels of governance

• Capacity building was made a sub-mission of the programme• 10% of the total outlay was earmarked for capacity building

The steps required for capacity building were:a) Creation in Municipal Cadreb) Identifying the gap in capacity at different levelsc) Opening of suitable institutions to provide the required input.

Ref. [6] [9]

Contd..Attribute JNNURM I JNNURM II Remarks

Development and financial

plan

•CDP and FP were not drawn up through a participatory process•The support provided was project centric, which led to emphasis on higher CAPEX which led to financially unsustainable ULBs

• Sufficient stress was given to develop detailed Development Plan and Financial Plan• A City Level Financial Plan was developed

• FP will indicate the projected cash inflows and outflows of the ULBs over a 10 year period.• The outflows should indicate the CAPEX, OPEX and expenses on Capacity Building.•Inflows indicate the Grants and assistance.

Reforms

• One-size-fits-all approach to reforms• Classified as Mandatory and Optional reforms as well as complex and non-complex reforms

• One-size-fits-all approach was discontinued •All reforms were mandatory reforms

• All incomplete reforms in JNNURM I shall become the base reforms for JNNURM II•For the completion of incentive reforms, 10% of the outlay of JNNURM II was allocated.

Ref.[6] [9]

Contd..Attribute JNNURM I JNNURM II Remarks

Transition Management • No transition phase.

• JNNURM II comprises of a 2-year transition period starting from 2012-13, for the completion of the targets set in JNNURM I

• Complete JNNURM-I sanctioned projects• Centre, state and ULBs shall undertake capacity building reforms• Municipal Cadres to be established• DP & FP to be finalized• Base level reforms to be completed.

Sectoral Emphasis

•JNNURM I followed a Top-Down approach for fund allocation.

• Release of funds shall be linked to year to year improvement in service delivery as per agreed milestones.

•This shall ensure adequate attention being paid by the ULBs to improve city level services

Ref. [6] [9]

Contd..Attribute JNNURM I JNNURM II Remarks

Fund flow Mechanism

• No specific milestones were set for release of annual funds.

• Once the DP and FP is approved, the annual allocation of the fund is to be released in two instalments by the Mission Directorates.•In the second year, the Mission Directorate shall examine the compliance with the financial and reform related parameters mentioned in the DP, FP and RFD & shall release the funds in 2 instalments, if complied.

Coverage

• It followed the concept of “Mission Cities” which led to an uneven distribution of the central fund and non inclusion of all cities.

• JNNURM II however planned that all cities shall be eligible to participate in the programme.• But, flexibility shall be kept for fund allocation keeping in mind the total urban population and other criteria

Ref. [6] [9]

Contd..Attribute JNNURM I JNNURM II Remarks

Leveraging of Funds

• There was huge gap between the funds required and the funds available to the ULBs• The Centre’s contribution was calculated with reference to the total cost of the project and disbursal was on the basis of project specific milestones and reforms

• The leveraging ratio should be fixed with reference to revenue from all other sources and not only a handful of projects• The leveraging ratio should increase with the size of the city.

• The share of the State Government should be at least 50% of the grant provided by the Centre to the ULBs or the amount recommended by the State Finance Commission, whichever is higher

Incentive Fund • No incentive fund allocation • 10% earmarked as incentive fund

•Progress in completion of Incentive reforms•Rolling out PPP projects•Raising fund through innovative measures•Achieving reform targets in advance•Awards etc.

Ref. [6] [9]

Implementation Status of projects under UIG scheme as on 17.09.13

Andhra Pradesh

Assam

Chandigarh

Delhi

Gujarat

Himachal Pradesh

Jharkhand

Kerala

0.00% 50.00% 100.00% 150.00%

Status as on 17.09.13Status as on 31.03.12

Ref. [15]

Implementation Status of projects under UIG scheme as on 17.09.13

Madhya PradeshMaharashtra

MeghalayaManipurMizoram

NagalandOdisha

PuducheryPunjab

RajasthanSikkim

Tamil NaduTripura

Uttar PradeshUttarakhandWest Bengal

0.00% 20.00% 40.00% 60.00%

Status as on 17.09.13Status as on 31.03.12

Ref. [15]

Contd..

Leveraging of funds under UIG Scheme as

on 17.09.13

Other fundsACA Commit-tedACA re-leased

Leveraging of funds under UIG scheme

as on 31.03.12

Other fundsACA Commit-tedACA Re-leased

Ref.[13] [15]

ACA – Additional Central Assistance

The Road Ahead…Set of tasks which need to be achieved for fine tuning of the

reforms and detailing of the plan are as follows:

Developing a road map for capacity building

Developing the simple and basic contours of the DP and FPs required for the cities

Reviewing the reform baskets and drawing milestones based on the same

Developing a template to ascertain whether the targets under the FP have been met to fast track the progress of the mission.

Creating a regulatory framework for raising the city level non-budgetary funds which is critical for the success of the urban agenda.

Ref. [9]

REFERENCES1. Jawaharlal Nehru National Urban Renewal Mission- An Overview published by Ministry of Urban

Employment and Poverty Alleviation and Ministry of Urban Development, Government of India.

2. Brochure for Jawaharlal Nehru National Urban Renewal Mission – Towards better cities published by Ministry of Urban Employment and Poverty Alleviation and Ministry of Urban Development, Government of India.

3. Jawaharlal Nehru National Urban Renewal Mission- Framework and process published by Ministry of Urban Employment and Poverty Alleviation and Ministry of Urban Development, Government of India.

4. Guidelines for project appraisal - Jawaharlal Nehru National Urban Renewal Mission published by Ministry of Urban Employment and Poverty Alleviation and Ministry of Urban Development, Government of India.

5. Toolkit for formulation of City Development Plan (CDP) - Jawaharlal Nehru National Urban Renewal Mission published by Ministry of Urban Employment and Poverty Alleviation and Ministry of Urban Development, Government of India.

6. Appraisal of Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Final Report – Volume I (March 2011), by Grant Thornton, published by 2011 Grant Thornton India.

7. Toolkit for comprehensive Capacity Building Programme - Jawaharlal Nehru National Urban Renewal Mission published by Ministry of Urban Development, Government of India, (April 2013).

8. Extension of time by 2 years up to 2013-14 for the completion of projects sanctioned till March, 2012 and reforms under UIG and UIDSSMT schemes of JNNURM - Office Memorandum, K-14012/04/2012-NURM-I, Ministry of Urban Development, Government Of India (April 10,2012)

9. Final Report of the Committee for JNNURM-II – by Arun Maira (Member), Planning Commission, Government of India, (March 28, 2012)

10. JNNURM-Brief Overview of the First Phase of the Mission Part I, by Vaibhav Anand, IFMR Capital

11. JNNURM-Brief Overview of the First Phase of the Mission Part II, by Vaibhav Anand, IFMR Capital

12. JNNURM Rapid training Programme – Governance and reforms, Centre for good governance, Administrative staff college of India

13. Implementation status of Projects approved under JnNURM (UIG & UIDSSMT) – by Ministry of Urban Development Mission Directorate (31.03.2012)

14. Status of projects sanctioned in Transition Phase under UIDSSMT- by Ministry Of Urban Development Mission Directorate (16.09.2013)

15. Projects implementation status under UIG, by Ministry Of Urban Development Mission Directorate (17.09.2013)

Thank You!