Category Archives: Privatisation of Municipal Services

Urban Development and Housing in Union Budget 2010-11

Urban Development and Housing in Union Budget 2010-11

While presenting the Union Budget 20010-11, the Finance Minister said that “Swarna Jayanti Shahari Rozgar Yojana” designed to provide employment opportunities in urban areas has been strengthened with focus on community participation, skill development and self employment support structures. For the Year 2010-11, the allocation for urban development increased by 75 per cent from Rs. 3,060 crore to Rs. 5,400 crore. In addition the allocation for Housing and Urban Poverty alleviation has also been raised form Rs. 850 crore to Rs. 1,000 crore in 2010-11.

In last year’s budget, a Scheme of one per cent interest subvention on housing loans was introduced, where home buyers get one per cent interest subsidy for banking loans up to Rs 10 lakh, provided the cost of house does not exceed Rs 20 lakh. This Scheme has been extended up to March 31, 2011 and a sum of Rs. 700 crore has been provided under this scheme for 2010-11 period.

The Rajiv Awas Yojana (RAY) for slum dwellers and urban poor was announced last year to extend support to States that are willing to provide property rights to slum dwellers. Allocation to this scheme is Rs. 1,270 crore for 2010-11 as compared to Rs. 150 crore last year. This marks an increase of over 700 per cent. The government efforts in the implementation of RAY would be to encourage the States to create a slum free India at the earliest.

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JNNURM MEETING:DC PULLS UP JUSCO OFFICIALS

JNNURM MEETING:DC PULLS UP JUSCO OFFICIALS

Mysore, Feb. 17 (KCU&KK)-Dy. Commissioner and JNNURM Special Officer P. Manivannan today came down heavily on JUSCO officials for their alleged incompatibility and inaccessibility to the citizens.

Presiding over the JNNURM progress review meeting here, Manivannan expressed his displeasure over the alleged non-chalant behaviour of JUSCO officials regarding redressal of water woes of citizens.

ACICM Convenor M. Lakshmana, Mysore Kannada Vedike members Ravi and Balakrishna, who were present at the meeting, pointed out that water distribution was better in city before handing over the responsibility to JUSCO. “Its officials are inaccessible and water complaints have been pouring in from all wards. No meeting is held with citizens,” they reiterated.

The visually upset DC instructed JUSCO rep Purohit to convene a meeting on Feb. 23 at 11 am inviting officers of MCC, JUSCO and VVWW to sort out the issues. “With mounting complaints, it will be reviewed whether continuance of deal with JUSCO would be worthwhile.

Mayor Purushotham announced that JUSCO would be entrusted only pipeline networking job with VVWW retaining operation and maintenance.

Slum clearance: When Manivannan sought the progress of finalising the list of beneficiaries for rehabilitating slum-dwellers, the Assistant Engineer of Slum Clearance Board Tejasvi said that about 2,700 beneficiaries have been enlisted for rehabilitation process. Not convinced with her contention, the DC instructed her to announce the list in all newspapers and seek objections before finalising the allotment. Dy. Mayor Sharadamma, JNNURM SE Suresh Babu, MCC Commissioner K.S. Raikar, MUDA Commissioner P.C. Jayanna and other officers were present.

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JNNURM is such a big failure does not give quarterly report to PMs DMU

Ahead of Budget, govt schemes on slippery ground
Shishir Gupta Posted online: Monday , Jan 25, 2010 at 0340 hrs
New Delhi : With the Budget 2010-11 preparations in full swing, there is a growing realisation within the Manmohan Singh government that its flagship programmes, including the much-touted Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Sarva Shiksha Abhiyan (SSA) are performing much below par with the ministries concerned in some cases not being able to spend half of their Plan allocation.

Government sources told The Indian Express that the Ministry of Urban Development has spent only 47.27 per cent (Rs 24,922.77 crore) of the 11th Plan allocation of Rs 52,735.83 crore for the JNNURM. The total allocation in 2009-10 Budget for the urban renewal mission was Rs 12,685.18 crore, but the revised estimates are now pegged at only Rs 8,483.35 crore — a shortfall of Rs 4,201.83 crore. The worst hit is the basic services for urban poor (BSUP) under the JNNURM, where only 34.88 per cent (Rs 4,430.37 crore) of the total Rs 12,700 crore 11th Plan outlay has been spent. The fiscal situation in other key programmes is no different.

The school education and literacy scheme, which includes the SSA, is also being revised downward by the Finance Ministry as the HRD Ministry has not been able to spend Rs 4,071 crore of the total allocation of Rs 26,800 crore in the last Budget. The same is the fate of rural health mission under the Ministry of Health and Family Welfare with the department concerned not being able to spend Rs 2,000 crore out of the budget estimates of Rs 18,380 crore in the last fiscal.

However, the Women and Child Development Department has shown progress particularly in the Integrated Child Development Services (ICDS) programme this fiscal. Its budget is being revised upward by Rs 1,200 crore as the ministry has been able to spend all of its Rs 7,350 crore allocation in the 2009-10 budget.

But the same cannot be said about the Ministry of Power whose revised estimates are down by Rs 2,400 crore and the scheme that has taken the major hit is the Rajiv Gandhi Grameen Vidyutikaran Yojana. Despite all its talk about reforms, the Power Ministry could not spend its Rs 9,230 crore allocation in the last Budget.

In fact, a large number of schemes designed for the upliftment of the masses have taken a hit. For instance, the Department of Small and Medium Enterprises could not even spend a meager allocation of Rs 1,794 crore with its revised estimates down by Rs 277 crore.

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WB funds for JNNURM to come with reforms for further Impact

http://www.business-standard.com/india/news/wb-funds-for-jnnurm-to-comereforms-clause/380810/

WB funds for JNNURM to come with reforms clause
Jyoti Mukul / New Delhi December 26, 2009, 1:08 IST

A fresh $1-billion (nearly 4,600-crore) loan from the World Bank under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), to be routed through the Union government, would be linked to cities adopting certain efficiency parameters.

These will form part of the second stage of urban reforms which the Centre plans to push in cities that have already shown some progress under JNNURM. These parameters will require them to achieve milestones linked to release of funds.

The Union urban development ministry is working on a concept paper to identify the broad reforms the cities will need to undertake. The paper will be the basis of discussions when a World Bank team arrives in the national capital next month to start negotiations for the loan.

“Projects that will be undertaken through the World Bank funding will be in addition to the ongoing projects under JNNURM. Since the agenda under JNNURM is set, the only thing that could undergo change is the reform agenda, since we want to take up reforms to the next stage,” said urban development secretary M Ramachandran.

The official clarified that these conditions were being designed by his ministry and not the World Bank. Under the first phase of reforms, cities and states are required to adopt certain measures, like rationalisation of stamp duty, repeal of the Urban Land Ceiling and Regulation Act and imposition of user charges, for availing funding under JNNURM.

According to the latest information with the ministry, 56 per cent of state-level reforms and 50 per cent of urban local reforms committed till 2008-09 were achieved. Among the states that have done well are Maharashtra, Gujarat, Tamil Nadu and Andhra Pradesh. There have been capacity constraints in the North-East and Jammu and Kashmir.

The nature of projects to be taken up for funding under the World Bank loan will be the same as that under JNNURM and will include water supply, sanitation and urban transport projects. Besides user charges, the efficiency parameters, for instance in a water project, could include reduction of wastage by specified quantum, achieving energy efficiency in the operation of the system and recycling. It could also include training of staff.

The funding pattern would be the same as for JNNURM. “The project funding could be city-wise and depend on a state’s willingness to take part and fund their part of money, and their commitment to do modification,” said Ramachandran, adding that the scope to increase the number of cities was not there, since the funding was limited.

At present, there are 63 mission cities, including metros like Delhi and Mumbai, besides Allahabad, Bhopal and Patna.

The urban development ministry is looking at additional funds of Rs 50,000 crore for JNNURM. The Planning Commission is likely to take a view on this in the mid-term appraisal of the Eleventh Five-Year Plan (2007-12).

Under JNNURM, the Centre allots grants covering 50 per cent of the project cost for cities with population between one million and four million. For cities with population higher than four million, the Central grant is 35 per cent of the project cost, with the remaining money coming from the state and the urban local bodies.

The states have utilised much of the Rs 1 lakh crore sanctioned for various projects under JNNURM since it was launched in December 2005.

In the case of the North-East, the Centre provides 90 per cent of the project cost as grants, while for Jammu and Kashmir, it contributes 80 per cent.

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JNNURM expansion plan does not enthuse local bodies

JNNURM expansion plan does not enthuse local bodies
6 Jul 2009, 0148 hrs IST, TNN

VIJAYAWADA: Union urban development minister S Jaipal Reddy’s decision to increase the coverage of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) programme has not enthused the local bodies in the state in spite of the fact that the Centre will generously fund the developmental programmes in the towns.

For, the fund-starving state government’s decision to convert its share into loan has dampened the hopes of growing towns to get listed under the JNNURM. The state government’s move has already created tremors in Vijayawada and Visakhapatnam local bodies which were part of JNNURM phase I programme as it led to a huge financial burden on these civic bodies.

The government had not only slashed its share of grant from 20 to 2 per cent but also financed the 18 per cent as loan with huge rate of interest. As per the original scheme, the Centre would extend 50 per cent of the total fund as complete grant and directed the state government and urban local body to share the remaining 50 per cent.

With a view to cornering maximum funds under the scheme, the state government too had agreed to give 20 per cent as grant and left the urban bodies to take the remaining 30 per cent load. “We thought that the scheme will provide a major relief even if we needed to pool up 30 per cent funds from our sources. But, backtracking by the state government will hurt the local bodies,” observed senior Congress corporator Anne Prasanna.

Stung by the development, Vijayawada MP Lagadapati Rajagopal has promised to take a delegation from the civic body to the chief minister to discuss the issue as the Vijayawada Municipal Corporation (VMC) has to additionally garner funds to the tune of Rs 600 crore to complete the schemes. Initially, many civic bodies of big towns like Guntur, Kurnool, Warangal and Rajahmundry cried foul when only Hyderabad, Visakhapatnam and Vijayawada from the state were selected for the programme taking the 10 lakh population as the main criteria.

The public representatives in Guntur have even criticised the way the neighbouring Vijayawada bagged the programme by including Mangalagiri town located in the Guntur district to inflate its population to 10 lakh. Curiously, these civic bodies responded cautiously when Jaipal Reddy brought an amendment to population criteria by reducing it to five lakh to enable more towns and cities to take advantage of the programme as part of his 100-day action plan.

According to sources, several corporations, including Kadapa, Nizamabad, Elur, Kakinada and Nellore, which have population between 3 and 4 lakhs, too could send their proposals by extending the programmes to more suburban areas to make the population cross five lakh. “We wanted to study the guidelines and also the implementation before going for funding,” said Guntur mayor Rayapati Saimohan Krishna.

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India pays penalty for not utilising loans from lending agencies

India pays penalty for not utilising loans from lending agencies
22 Jun 2009, 0415 hrs IST, Pradeep Thakur, TNN

NEW DELHI: While India is negotiating more loans from the World Bank to fund infrastructure development and to upgrade urban transport, an internal assessment of the finance ministry has revealed that many of its past projects are running far behind schedule to the extent that the government has been paying commitment charges of several hundred crores every year.

In 2007-08 and 2008-09 alone, India paid Rs 240 crore as commitment charges for the non-disbursed portion of sanctioned loans to World Bank and other multilateral agencies such as Asian Development Bank (ADB) and some bilateral donors.

In the five years between 2004-05 and 2008-09, the government paid close to Rs 700 crore as commitment charges. An estimate of such expenditure since 1991 puts the figure upwards of Rs 1,400 crore.

Finance ministry sources said that till last year, there were 231 externally aided projects of which more than 40% were paying commitment charges. This indicates lack of coordination among different organs of the government with no check on timely implementation of development schemes.

Review of the ADB portfolio showed undisbursed loan amount having increased from $850 million in 1999 to $3.5 billion at the end of 2006. Fresh loans were negotiated even when the existing basket reflected huge under utilisation.

A finance ministry official said in the six years between 2001 and 2007, the government borrowed Rs 12,800 crore from ADB but on account of slow disbursal, it paid Rs 230 crore to the agency as commitment charges. An estimated 60% of World Bank and ADB loan portfolio are currently paying commitment charges.

It has been observed that many highway and power projects were pushed prematurely for additional World Bank funding even before they were ready, or even before the previous loans had become effective.

Commitment charges are a penalty on the recipient for its failure to utilise the committed aid. It is partly an indicator to assess the recipient government’s bureaucratic capacity of (loan) aid absorption and to measure the pipeline effect of the rate of utilisation of credit.

Questions have also been raised on the way the loans have been negotiated. In many cases, the government had bargained loans with commitment charges as high as 0.75% when the rate of interest in the international market hovered around 1%.

http://timesofindia.indiatimes.com/India/India-pays-penalty-for-not-utilising-loans-from-lending-agencies/articleshow/4684437.cms

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begging bowl of 8-10,000 crs for Bengaluru

Rs 8,000 crore sought for Bangalore infrastructure

BANGALORE: The state government has sought a special grant of Rs 8,000 crore from the Centre to address Bangalore’s infrastructure needs. Chief Minister B S Yeddyurappa who met Union Finance Minister Pranab Mukherjee in Delhi recently in a delegation had requested the latter to provide Rs 8,000 crore for infrastructure development in IT capital which contributes $ 14 billion to the country’s export earnings. Karnataka’s representative in Delhi Dhananjay Kumar on Wednesday told reporters that the state government had estimated that Rs 36,000 crore were needed in the next six years to fulfil the infrastructure needs of Bangalore.
He said that the state government alone cannot mobilise such a huge amount even if the funds under JNNURM and State Finance Commission were taken into consideration. There would be a gap of about Rs 16,000 crore, he added.
Kumar said Mukherjee had promised to consider the demand sympathetically.
During his meeting with Mukherjee, Yeedyruappa is said to have requested him to release Rs 500 crore to the state on ad-hoc basis towards the losses incurred due to floods and drought last year.
The CM also requested the Centre to provide loans to small and medium enterprises (SMEs) at interest rates on par with prime lending rates.
“As of now SMEs are being charged 2 to 2.5 per cent more interest than the prime lending rates,” Kumar said.

http://www.expressbuzz.com/edition/story.aspx?Title=Rs+8,000+crore+sought+for+Bangalore+infrastructure&artid=r/tv/Lpov6k=

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