Revival of urban India
Jitendra Jain, CEO & MD, Neev Group of Companies throws some light on private sector participation in JNNURM projects
The Jawaharlal Nehru National Urban renewal mission (JNNURM) was launched on December 3, 2005 with a initial grant of Rs50,000 crore for reforms-linked, demand driven, fast track development of infrastructure and basic services to the poor, including housing and slum up gradation over a duration of seven years from 2005 to 2012.
On the basis of this mission, 63 cities were identified initially. The aim was to create a high end urban infrastructure and governance and to facilitate a high quality basic service for the urban poor. Secondly, other towns were identified to create and sustain the infrastructure development in small and medium towns. Thirdly an integrated housing and slum development programme was also launched in support of the JNNURM mission.
The mission aims to provide focussed attention to integrated development of infrastructure services in cities covered under the mission. It also strives to establish linkages between asset-creation and asset management through slew of reforms for long term project sustainability. The mission entails ensuring adequate funds to meet the deficiencies in urban infrastructural services. The key objective of JNNURM is to achieve planned development of identified cities including peripheral urban areas, outgrowths and urban corridors leading to dispersed urbanisation. Equal importance is given to scaling up delivery of civic amenities and provision of utilities with emphasis on universal access to the urban poor.
The year 2008 was important because it reveals a phase where more than 50% of global population has moved to urban centres. By 2025 more than 80% of population would have shifted to urban cities in search of new livelihood. Such massive movement of poverty ridden population from villages to urban centres will put great amount of pressure on urban infra. Hence the urban sector of our country creates tremendous challenges and presents opportunities too. The JNNURM addresses these challenges along with the opportunities. Under this mission, projects worth over Rs100,000 crore have been approved till date for urban development and welfare of the urban poor.
Opportunities & Challenges
JNNURM aims to enhance the quality of living for urban poor through initiatives such as LPG pipelines connections, Water treatment plants, Sea water distillation to drinking water, electricity generation plant by natural resources, rain water harvesting plants, slum rehabilitation in metros and upgradation of healthcare and sanitation system. JNNURM aims to raise the overall standards of infrastructure through Road development on BOT basis, Modern transportation means (modern A/C buses, metro and mono railway system), Renovation of old infrastructure as well as through development of skyscrapers in metros. Considering the short timeframe for achievement of the mission goals, JNNURM faces several challenges. These include slow project implementation, weak reporting process from regional authorities, less awareness among citizens about the benefits of the scheme, less visibility in densely populated areas, non flexible approach of regional officers, limited R&D & innovations, limited capacity of training institutes for people associated with this scheme, lack of rehabilitation scheme in densely populated areas and delay in allotment of land even after bidding of the tender. Thus, it becomes quite difficult for the developer to complete project within the given time frame. Moreover, since the schemes are in multiple small packages, big players do not find them attractive enough.
The way ahead
The infrastructure sector in India is poised to grow to a significant level. The scope for growth in the urban infrastructure sector continues with regard to there being lucrative levels of demand for roads, transportation, parking slots and various other social infrastructures etc.
Government has also supported this growth by taking proactive steps to promote investments such as proposal of user friendly FDI policies. Hence, we are looking forward to some positive developments in the coming year.
The budget 2010-2011 has accepted the challenge to revert to the high GDP growth rate of 9% as the government is expecting a double digit economic growth in the near future. Infrastructure development is obviously essential for economic growth of the country. Allocation of Rs1,73,552 crore as provided for infrastructure development forms 46% of the total budget, the highest spending ever done. Twenty five per cent of plan outlay is earmarked for rural infra, thus balancing the rural and urban growth simultaneously. Also the support for re-financing infrastructure projects continues, which could make acquiring funds for infrastructure easier.