JNNURM Formulation, Achievements and Failures

ByBikram 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 - Honble 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 assetmanagement

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 Infrastructur e Governance (UIG) Basic Services to Urban Poor (BSUP)

Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT)

Integrated Housing and Slum Development Programme (IHSDP)

Ref [1]

STRATEGIES OF THE MISSION

Preparing 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]

FRAMEWORK
Institutional framework

Policy oversight

Mission operationalisation

Advisory support

Sub-mission Directorates (SMD) National Steering Group (NSG) Central Sanctioning and Monitoring Committee (CSMC)

Macro level to NSG and SMD

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

State Level Steering Committee (SLSC) Technical Advisory Group (TAG)

State Level Nodal Agency (SLNA)

Ref. [3]

PROCESS AND FUNDING PATTERN Sanctioning

Process flow
Categ ory A B and disbursemen t of assistance Population (2001 Census) >4 Million 1-4 Million Selected cities/ UAs less than 1 Million For NE and J&K Others 90 80 10 10 0 10 90 80 10 20
Ref. [3]

Revolving fund
UIG

Monitoring

BSUP
Other Central 50 30 50 50 State Other 50 50

Central 35 50

State 15 20

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

National level

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.
Ref.[4] [6]

State level

APPRAISAL OF JNNURM
National level 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 inhouse capacity There was no provision for the constitution of City Level Sanctioning and Monitoring Committee (CSMC) in JNNURM guidelines

Institutional level

Delays in project sanctioning mechanism, as many primers were added later Time given to the consultants to prepare the CDP is too short

ULB level

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 todays urban sector scenario should be considered to be monitored by an agency similar to appraising and monitoring agencies for reforms and project.

Ref.[4] [6]

Percentage completion of projects under UIG Scheme as on 31.03.12

Kerala Karnataka Jharkhand Jammu & Himachal Haryana Gujarat Goa Delhi Chattishgarh Chandigarh Bihar Assam Arunachal Andhra Pradesh 0.00% 20.00% 40.00%

Percentag e completio n

60.00%
Ref. [13]

Contd..
Percentage completion of projects under UIG scheme as on 31.03.12

West Bengal Uttarakhand Uttar Pradesh Tripura Tamil Nadu Sikkim Rajasthan Punjab Puduchery Odisha Nagaland Mizoram Manipur Meghalaya Maharashtra Madhya 0.00% 10.00% 20.00%

Percentag e completio n

30.00%
Ref. [13]

Percentage completion of projects under UIDSSMT scheme as on 31.03.12

Kerala Karnataka Jharkhand Jammu & Kashmir Himachal Pradesh Haryana Gujarat Goa Daman & Diu Dadra and Nagar Haveli Chattishgarh Bihar Assam Arunachal Pradesh Andhra Pradesh Andaman & Nicobar 0% 20% 40%

Percentag e completion

60%
Ref. [13]

Contd..
Percentage completion of projects under UIDSSMT scheme as on 31.03.12

West Bengal Uttarakhand Uttar Pradesh Tripura Tamil Nadu Sikkim Rajasthan Punjab Puduchery Odisha Nagaland Mizoram Manipur Meghalaya Maharashtra Madhya Pradesh 0.00%

Percentag e completio n

20.00% 40.00% 60.00% 80.00%

Ref [13]

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

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.

FAILURES OF JNNURM (Arun Mairas Report)

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

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 investors 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.

UIG, Schemes and BSUP, components 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 Separate outlays were not identified under this phase. There was complete allocation towards base funds. Capacity building was kept under a mission directorate Lack of fund allocation led to the lack of capacity building at all levels of governance JNNURM II Base fund (80% of the total funds) Incentive Funds (10% of the total funds) Capacity Building fund (10% of the total fund) The steps required for capacity building were: a) Creation in Municipal Cadre b) Identifying the gap in capacity at different levels c) Opening of suitable institutions to provide the required input.
Ref. [6] [9]

Remarks

Division of Outlay

Capacity building

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

Contd..
Attribute JNNURM I JNNURM II Remarks 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. 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]

CDP and FP were not drawn up through a participatory process The support provided Development was project centric, and financial which led to emphasis plan on higher CAPEX which led to financially unsustainable ULBs One-size-fits-all approach to reforms Classified as Mandatory and Optional reforms as well as complex and non-complex reforms

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

Reforms

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

Contd..
Attribute JNNURM I JNNURM II Remarks 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.

Transition No transition phase. Management

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

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 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. 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 Remarks

Fund flow Mechanism

No specific milestones were set for release of annual funds.

Coverage

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

Ref. [6] [9]

Contd..
Attribute JNNURM I
There was huge gap between the funds required and the funds available to the ULBs The Centres contribution was calculated with reference to the total cost of the project and disbursal was on the basis of project specific milestones and reforms

JNNURM II
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.

Remarks

Leveraging of Funds

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 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]

Incentive Fund

No incentive fund allocation

10% earmarked as incentive fund

Implementation Status of projects under UIG scheme as on 17.09.13

Kerala Karnataka Jharkhand Jammu & Kashmir Himachal Pradesh Haryana Gujarat Goa Delhi Chattishgarh Chandigarh Bihar Assam Arunachal Andhra Pradesh 0.00% 50.00% 100.00%

Status as on 17.09.13 Status as on 31.03.12

150.00%
Ref. [15]

Contd..

Implementation Status of projects under UIG scheme as on 17.09.13

West Bengal Uttarakhand Uttar Pradesh Tripura Tamil Nadu Sikkim Rajasthan Punjab Puduchery Odisha Nagaland Mizoram Manipur Meghalaya Maharashtra Madhya Pradesh 0.00% 20.00% 40.00%

Status as on 17.09.13 Status as on 31.03.12

60.00%
Ref. [15]

Leveraging of funds under UIG scheme as on 31.03.12

Leveraging of funds under UIG Scheme as on 17.09.13

Other funds

Other funds
ACA Committe d ACA released

ACA Committe d ACA Released

ACA Additional Central Assistance

Ref.[13] [15]

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]

REFERENCES
1.

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. 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. 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. 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. 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. Appraisal of Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Final Report Volume I (March 2011), by Grant Thornton, published by 2011 Grant Thornton India. Toolkit for comprehensive Capacity Building Programme - Jawaharlal Nehru National Urban Renewal Mission published by Ministry of Urban Development, Government of India, (April 2013). 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) Final Report of the Committee for JNNURM-II by Arun Maira (Member), Planning Commission, Government of India, (March 28, 2012) JNNURM-Brief Overview of the First Phase of the Mission Part I, by Vaibhav Anand, IFMR Capital JNNURM-Brief Overview of the First Phase of the Mission Part II, by Vaibhav Anand, IFMR Capital JNNURM Rapid training Programme Governance and reforms, Centre for good governance, Administrative staff college of India Implementation status of Projects approved under JnNURM (UIG & UIDSSMT) by Ministry of Urban Development Mission Directorate (31.03.2012) Status of projects sanctioned in Transition Phase under UIDSSMT- by Ministry Of Urban Development Mission Directorate (16.09.2013)

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Thank You!