Urban Infrastructure, Housing, Basic Services and...

11Urban Infrastructure, Housing, Basic Servicesand Poverty Alleviation

urbanized compared to many countries of Asia, viz.,China (32%), Indonesia (37%), Japan (78%), SouthKorea (83%), and Pakistan (35%).

• There is a continued concentration of the urbanpopulation in large cities and existing city agglom-erations (Class I cities with population over onelakh) account for 68.9% of the urban population andthis proportion has been growing. The growth ofrural settlements which are acquiring urban charac-teristic is very slow and there is reluctance on the partof the States to notify the rural settlements as a town.

• There are large variations in the spatial patterns ofurbanization across the States and cities.

• The pattern of population concentration in largecities reflects spatial polarization of the employmentopportunities.

11.3 This phenomenon has led to tremendous pres-sure on civic infrastructure systems, water supply,sewerage and drainage, uncollected solid waste,parks and open spaces, transport, etc. It has also led todeterioration in the quality of city environments.In several cities, the problems of traffic congestion,pollution, poverty, inadequate housing, crime, andsocial unrest are assuming alarming proportions.

11.4 The number of urban agglomerations and townshas increased from 3768 in 1991 to 5161 in 2001. Fur-ther, this urbanization is characterized by incomplete

OVERVIEW

URBAN SCENARIO IN THE GLOBAL CONTEXT11.1 Urbanization is a key indicator of economicdevelopment and should be seen as a positive factorfor overall development. Also, as an economy grows,its towns and cities expand in size and volume andthe contribution of the urban sector to the nationaleconomy increases. For instance, the contribution ofurban sector to India’s GDP has increased from 29%in 1950–51 to 47% in 1980–81. The urban sector pres-ently contributes about 62%–63% of the GDP and thisis expected to increase to 75% by 2021 (see Box 11.1).

Box 11.1Vision

Indian cities will be the locus and engine of economicgrowth over the next two decades, and the realization ofan ambitious goal of 9%–10% growth in GDP dependsfundamentally on making Indian cities much morelivable, inclusive, bankable, and competitive.

11.2 The trends of urbanization in India in the recentdecades indicate the following key features:

• The degree of urbanization in India is one of thelowest in the world. With about 27.8% of the totalpopulation living in the urban areas, India is less

Urban Infrastructure, Housing, Basic Services, and Poverty Alleviation 395

devolution of functions to the elected bodies, lack ofadequate financial resources, unwillingness to progresstowards municipal autonomy, adherence to outdatedmethods in property taxation, hesitation in levy of usercharges, unsatisfactory role of parastatals in the provi-sion of water supply and sanitation services. Also, thegovernance requirements under the 74th ConstitutionAmendment Act (CAA) in respect of the District Plan-ning Committees and Metropolitan Planning Commit-tees (MPCs) have not been met in a number of States.

11.5 The extent and magnitude of the urban popula-tion calls for extra efforts by city planners and manag-ers to cope up with the ever-growing strain on theurban infrastructure. Special attention is needed formanagement and governance of urban areas which areat present fragmented between different State-levelagencies and urban local bodies (ULBs), with lack ofco-ordination.

11.6 The policymakers need to focus on new waysto achieve the results and on different benchmarksthat capture efficiency, effectiveness, quality, andsustainability in governance, service delivery, inter-governmental municipal finances, and social de-velopment. Some of the strategic interventions aresummarized in Box 11.2.

NATIONAL URBANIZATION POLICY11.7 The time is ripe to formulate a long-term NationalUrbanization Policy indicating the emerging patternof urbanization and measures to channelize future ur-ban growth in an equitable and sustainable manner. Itshould encompass the changing economic scenario,reform agenda of Jawaharlal Nehru National UrbanRenewal Mission (JNNURM), and the role of ULBs inthe era of globalization. The objectives of balanced and

sustainable development are to be achieved by reduc-ing spatial disparities.

REGIONAL DEVELOPMENT PLANS11.8 The regional development plans at the State levelneed to be formulated as a broad policy and visiondocument for the development of urban and ruralgrowth centres in an integrated manner.

ROLE OF GOVERNMENT AS A FACILITATOR11.9 The GoI should play the role of a facilitator asis being done through JNNURM and various otherreform initiatives such as property tax reforms, muni-cipal accounting reforms, model municipal law,guidelines on private sector participation, etc. It shouldalso come up with a policy framework for regulatorsin the urban sector. The State Governments shouldplay a similar role to facilitate the ULBs in orderto provide an enabling environment for the ULBs tofunction as effective units of self-governance at thelocal level. Urban poverty alleviation, slum up grada-tion, and basic services to the urban poor will continueto remain as functions belonging to the public domain.These functions are redistributive in nature and arebest handled through redistributive taxes at the con-trol of Central and State Governments. Thus, Central–State–ULB partnerships will be necessary as potentiallyeffective ways to address the emerging issues of urbandevelopment.

PRIVATE SECTOR PARTICIPATION11.10 Private sector participation in the water supplyand sanitation sector could not make significantprogress till now. There is substantial need and poten-tial for the same in the Eleventh Plan. However, with-out aiming at the full cost recovery, private sectorparticipation cannot be a successful proposition.

Box 11.2Strategy of Urban Development

• Strengthening urban local bodies through capacity building and better financial management.• Increasing the efficiency and productivity of cities by deregulation and development of land.• Dismantling public sector monopoly over urban infrastructure and creating conducive atmosphere for the private sector

to invest.• Establishing autonomous regulatory framework to oversee the functioning of the public and private sector.• Reducing incidence of poverty.• Using technology and innovation in a big way.

396 Eleventh Five Year Plan

THE CONSTRAINTS11.11 The transformation of the Indian cities facesseveral structural constraints. Foremost, the currenturban development model starves cities of financing.Also, weak or outdated urban management practices—inappropriate planning systems, unsustainable ser-vice delivery models, and lack of focus on the urbanpoor—negate the benefits of agglomeration economiesin Indian cities by distorting land and housing mar-kets, rendering cities non-creditworthy, and leavingthem with expensive yet poorly functioning urbanservices.

11.12 The current urban management techniques arealso out-moded. The Master Plan concept—as cur-rently practised in India—is not widely used elsewhere.Besides, it is not well suited to rapidly growing cities andmulti-jurisdiction urban agglomerations. The MasterPlan concept has also not been useful in addressingIndia’s large and widely spread slums. By locking-in thesupply of buildable land and space, the Master Plan,inter alia, inhibits the development of housing marketsand contributes to the proliferation of slums. Therefore,there is an urgent need to develop new management andservice delivery approaches across the board.

REVIEW OF SCHEMES OF THE TENTH PLAN

JAWAHARLAL NEHRU NATIONAL URBAN RENEWALMISSION (JNNURM)11.13 Consistent with the policies of the presentgovernment, the Prime Minister of India launchedJNNURM on 3 December 2005 to give focused atten-tion to integrated development of urban infrastruc-ture and services in select 63 cities with emphasis onprovision of basic services to the urban poor, includ-ing housing, water supply, sanitation, road network,urban transport, development of inner (old) cityareas, etc. A provision of Rs 50000 crore has been madeas reform-linked Central assistance over the Missionperiod of seven years beginning from 2005–06. Theprovision of Central assistance is linked to the imple-mentation of certain mandatory as well as optionalreforms at the State and ULB/parastatal levels duringthe Mission period. Against the allocation of Rs 4900crore for 2006–07, an amount of Rs 3906 crore wasreleased. In 2007–08, an amount of Rs 5500 crore has

been allocated. Subsequently, additional Rs 500 crorewas allocated in ‘Plan B’.

11.14 In its initial period, the Mission has focused onfinding good urban infrastructure investments that canultimately be undertaken on a self-sustaining basis.Now that this search process has been put in place, amore systematic perspective needs to be adopted. Ithas to be realized that the ability to tap India’s increas-ingly sophisticated financial markets will remainseverely circumscribed till the local bodies becomecredible and accountable.

URBAN REFORM INCENTIVE FUND (URIF)11.15 The Tenth Plan underlined the need for broad-based reforms to overcome the impediments of urbangrowth and stipulated that conformity to the reformagenda through the URIF will be made obligatory forthe Central assistance. URIF called upon the States torepeal the Urban Land (Ceilings and Regulation) Act1976, reform Rent Control Acts, strengthen propertytax system, reduce stamp duty, introduce doubleentry accounting system, and revise user charges tocover operations and maintenance costs. An alloca-tion of Rs 300 crore was made under URIF for alloca-tion to different States for implementing the reformagenda. The scheme was later subsumed in JNNURM.

MEGA CITY11.16 A CSS for infrastructure development in themega cities was introduced in 1993–94 to cover a widerange of projects on water supply and sewerage, roadsand bridges, city transport, solid waste management,etc. The Central share released during Tenth Planamounts to Rs 908.69 crore (anticipated expenditure)against an allocation of Rs 1050 crore. The scheme hassince been subsumed in JNNURM.

INTEGRATED DEVELOPMENT OF SMALL ANDMEDIUM TOWNS (IDSMT)11.17 IDSMT was launched in 1979–80 to improvethe economic and physical infrastructure and to pro-vide essential facilities and services in small and me-dium towns. Since inception, upto 31 March 2007, atotal of 1854 towns, out of 5092 small and mediumtowns (2001 Census), were covered under the scheme.Out of an approved outlay of Rs 1304.65 crore for the


Tenth Plan, the anticipated expenditure is Rs 566.43crore (43.4%). As the performance of the scheme wasnot satisfactory, an evaluation was carried out in 2002which showed that the scheme suffered from (i) lackof capacity for implementation, (ii) non-availabilityof matching States share, and (iii) non-availability ofunencumbered land for the projects. The scheme hassince been subsumed in JNNURM as Urban Infra-structure Development Scheme for Small and MediumTowns (UIDSSMT).

ACCELERATED URBAN WATER SUPPLY PROGRAMME(AUWSP)11.18 AUWSP was launched in March 1994 to pro-vide safe and adequate water supply to towns havingpopulation less than 20000 (as per 1991 Census), toimprove environment and quality of life, and to bringabout better socio-economic conditions to sustain theeconomy. Since its inception, 1244 towns have beencovered and 639 projects have been completed at anestimated cost of Rs 1822.38 crore, including Centralfunds of Rs 828.06 crore. Against the approved outlayof Rs 900 crore for the Tenth Plan, an expenditure ofRs 406.50 crore was incurred which is about 45.2%.Concurrent evaluation of the scheme was made inNovember 2003 for 62 towns in 24 States. Majorrecommendations of the study included handing overof the scheme to ULBs, timely release of State funds,periodic review of tariff, and training to field engineersfor effective implementation. The scheme has sincebeen subsumed under JNNURM. However, forcompletion of ongoing projects, Rs 32.50 crore hasbeen provided for 2007–08.

PILOT PROJECT ON SOLID WASTE MANAGEMENTNEAR AIRPORT IN FEW SELECTED CITIES11.19 A Central sector scheme on solid waste manage-ment in 10 selected air field towns was approved in 2003as 100% grant from the GoI towards capital cost andwas to be completed in three years. Subsequent to thecompletion of the project, the scheme was to be handedover to the concerned ULBs for day-to-day O&M. Whileeight projects, viz., Sirsa, Jodhpur, Pune, Gwalior,Tezpur, Adampur, Dindigul, and Ambala are being ex-ecuted by National Building Construction Corporation(NBCC), projects for Hindon and Bareilly are beingexecuted by Uttar Pradesh Jal Nigam. The approved cost

of the project is Rs 99.34 crore. The projects are undervarious stages of execution.

NEW INITIATIVES FOR THE ELEVENTH PLAN

POOLED FINANCE DEVELOPMENT FUND (PFDF)11.20 The government had approved on 29 September2006 a proposal for setting up of a PFDF to providecredit enhancement to the ULBs to access marketborrowings based on their credit worthiness throughState-level Pooled Finance mechanism. The broadobjectives of PFDF are:

• Facilitate implementation of bankable urban in-frastructure projects through appropriate capacity-building measures and financial structuring ofprojects.

• Facilitate the ULBs to access capital and financialmarkets for investment in critical urban infrastruc-ture by providing credit enhancement grants toState-pooled Finance Entities for accessing capitalmarkets through Pooled Financing Bonds on be-half of one or more identified ULBs for investmentin the urban infrastructure projects.

• Reduce the cost of borrowing to local bodies withappropriate credit enhancement measures andthrough restructuring of existing costly debts.

• Facilitate development of Municipal Bond Market.

11.21 All State/UT governments have been requestedto take necessary preparatory action for operationaliza-tion of the scheme to avail benefit from this financialyear. In this connection, to sensitize the State Govern-ments and all stakeholders for implementation ofthe scheme in a time-bound manner, a NationalWorkshop was organized in Chennai on 20 Novem-ber 2006 and the scheme was formally launched.During 2006–07, Rs 50.00 crore has been providedfor the scheme. An amount of Rs 100 crore has beenprovided to the Ministry of Urban Development for2007–08 for PFDF. For the Eleventh Plan period, a pro-vision of Rs 2500 crore has been made.

NATIONAL URBAN INFRASTRUCTURE FUND (NUIF)11.22 The NUIF is proposed to be set up as a trust toprovide source of funding for bankable projects/schemes pertaining to the ULBs. The commercial


banks are hesitant to lend to ULBs due to apparentlack of capacity of the ULBs to meet their debt serviceobligations on the one hand and lack of expertiseamongst financial institutions to lend for viableurban infrastructure projects on the other. NUIF willserve as an SPV that will create necessary comfort levelamongst financial institutions with respect to repay-ments by avoiding direct exposure of commercialbanks to the ULBs. The process of consultation forsetting up of NUIF is presently in the advanced stage.

DEVELOPMENT OF SATELLITE CITIES/COUNTERMAGNET CITIES11.23 Metros and mega cities, which have become thecentre of trade and commerce, have to cope with theirown problems along with unabated in-migration fromsmall and medium towns and vast rural hinterland.These have to be planned beyond the municipal limitsand due importance may be given to integrated trans-port and communication. The other settlementslocated in the vicinity of the mother city are to bedeveloped as satellite/counter magnets to reduce andto redistribute the population and population influx.To cope with the above problem, the government hasproposed a new scheme for development of satellitetowns/counter magnet cities. This will help in thedevelopment of metropolitan regions. Token provisionfor the scheme has been made in the Budget of theMinistry of Urban Development for 2007–08.

E-GOVERNANCE IN MUNICIPALITIES11.24 The key objectives of the Mission are to intro-duce e-governance in the municipalities to providesingle window services to the citizens, to increaseefficiency and productivity of the ULBs, to providetimely and reliable management information, etc.

11.25 The scheme envisages to cover all ULBs in ClassI cities (423 in total having population of one lakhor more) during 2007–08 to 2011–12. A total of 35cities with million plus population are proposed tobe covered as part of JNNURM. However, a new CSSScheme for other cities and towns other than 35 citieswould wait for the present till the implementation iswatched in 35 cities as a part of JNNURM. Eight ser-vices relating to birth and death certificates, property

tax, building plan approval, health programme, solidwaste management, accounting system, etc., will becovered under the programme.

JNNURM—AN INSTRUMENT OF CHANGE11.26 Cities and towns have a vital role in India’s socio-economic transformation. The cities in India are serv-ing as a nodal point for innovation and are playing avital role in the Global Market. Most cities and townsare severely stressed in terms of infrastructure and ser-vice availability. In 2001, 50.3% of the urban house-holds had no piped water within their premises and44% of them were devoid of sanitation facilities. About25.7% of country’s urban population continues to bebelow the poverty line in 2004–05. According to the2001 Census, 14.12% of the urban population livesin slums with a significant proportion of it withoutaccess to basic services.

OVERVIEW OF THE MISSION11.27 JNNURM rests on the postulate that cities makea meaningful contribution to India’s economic growthand poverty reduction. This programme seeks to fulfilthe Millennium Development Goals, and is envisagedto operate in a Mission mode by facilitating invest-ments in the urban sector. It seeks to incentivize policyand institutional reforms, leading to sustainable socio-economic growth, service delivery, and improvedgovernance in the Mission cities. It also aims at devel-oping appropriate enabling frameworks to enhance thecreditworthiness of the municipal bodies and integratethe poor with the service delivery systems.

STRATEGY OF THE MISSION11.28 The Mission seeks to achieve the objective ofintegrated development of cities, for which the citiesare required to formulate a City Development Plan(CDP), bringing out long-term vision for the citiesand support their efforts through funding of projectproposals. A CDP is anchored on the goal of JNNURMin creating economically productive, efficient, equi-table, and responsive cities. The essential require-ment of the Mission is implementation of urbanreforms, within the Mission period. On the basis ofthe satisfactory completion of the above tasks, fundingsupport is provided in the form of ACA, ranging


from 35% to 90% of the project cost, based on thecity category. The Mission also aims to leverage andincorporate private sector efficiencies in develop-ment, management, implementation, and financingof projects, through PPP arrangements, whereverappropriate.

EXPECTED OUTCOMES OF JNNURM• Financially sustainable cities for improved gover-

nance and service delivery.• Universal access to basic services in urban areas.• Transparency and accountability in governance.• Adoption of modern transparent budgeting,

accounting, and financial management systems.

11.29 There is an increased application of e-gover-nance in service delivery and internal operations.

OPERATIONAL ISSUES LINKED TOJNNURM PROCESS11.30 Sustaining momentum of the Mission by con-tinuous engagement with all cities and at the same timeensuring wider ownership has been a major challengewhile operationalizing the Mission.

11.31 The capacity of city-level agencies to absorbthe investment support and delivery on reforms is acritical bottleneck. The Mission needs to calibrateand pace its capacity-building efforts in a manner soas to ensure that all Mission cities are able to reap thebenefits of the programme and meet its stated goalsand objectives.

11.32 Projects hitherto being implemented by city-level agencies have been very small in size comparedto those being taken up under JNNURM. The overallinstitutional capacity and more specifically the projectimplementation capacity is clearly inadequate todeal with such large projects. This calls for immediatelateral expansion of human resources with appropri-ate skills, backed up by good project managementsystems. There is also a shortfall in the contractingcapacity in the private sector. Large/organized sectorplayers in infrastructure industry have not yet seriouslylooked at municipal infrastructure because of uncer-tainty in enabling environment. The project sizes have

been small, with overdependence on the governmentfunding. Poor credibility of implementing agencies isalso one of the concerned areas.

11.33 Successful implementation of reforms withinthe committed timeframe is critical to the success ofthe Mission. The challenge is to facilitate the cities tointernalize the reforms. Simultaneously, the process ofreporting and monitoring progress of reforms needsto be sustained throughout the Mission period. Theexperience of implementation of JNNURM shows thatthe following issues need to be addressed:

• Need for adequate attention to the priority sectors,viz., water supply, sewerage, sanitation, stormwater drainage, etc., in the CDPs prepared underJNNURM. Undue focus is presently given to on-road projects and flyovers.

• Need for focus on recovery of O&M costs andpossibility of involving private sector through thePPP mode in the CDPs.

• Need for synergy between the Ministries of UrbanDevelopment and HUPA in the implementation ofJNNURM. Both the ministries need to work in closeco-ordination and synergy.

• Need to ensure improvement in urban governanceso that the ULBs/parastatal agencies become finan-cially sound. The Central and State agencies mustensure timely implementation of the agenda ofreforms.

• Need to strengthen monitoring mechanism andensuring that milestones for reforms are achievedduring the project period and not extended to theMission period.

11.34 As the programme is in the third year of imple-mentation, the programme needs to be evaluated byan independent agency so as to take timely appropri-ate remedial measures.

MEASURES TO STRENGTHEN JNNURMPROCESSES11.35 Several workshops and seminars have beenorganized at regional and State level, apart from day-to-day interactions to speed up the participation oflow performing States in the Mission.


11.36 The government is organizing a series of work-shops/seminars with the objective of dissemination ofthe Mission objectives among the elected representa-tives and municipal functionaries. These fora have beeninstrumental in enhancing citizen involvement andimproving technical capacities for project preparationand implementation by the ULBs/other city-level agen-cies, in various cities and States. To enhance commu-nity participation in the planning process and invarious aspects of implementing JNNURM, the sub-Mission on urban infrastructure and governance hascreated a Community Participation Fund. This is toenable the citizens to develop a sense of ownershipon community assets and take on responsibilities forcommunity-based projects. To improve communityparticipation in the implementation of the Mission,a Technical Advisory Group has been set up at thenational level, which is to be further supported by simi-lar structures at the State and city levels.

11.37 The Mission is in the process of preparing aframework for capacity-building and up-scaling of allrelated activities in order to bridge the capacity gap inimplementation of projects and reforms. It is propos-ing to conduct a rapid training programme for mu-nicipal functionaries in key areas such as governanceand reforms, DPR preparation, and project prepara-tion. For fulfilling the long-term requirement ofhuman resource challenges in the ULBs, the govern-ment is in the process of establishing a network ofregional institutions across the country, which willaddress training and capacity-building needs for theStates, cities, and other related institutions.

11.38 Strengthening communication channels tofacilitate institutionalization and internalization ofreforms is a key to the success of the Mission. Thegovernment has also appointed independent agenciesfor monitoring the implementation of the reforms. Aquarterly progress reporting system for the cities andStates has been instituted under the Mission. Apartfrom this, an MIS has been developed for monitoringprojects and reforms.

11.39 To address the issues of credibility and finan-cial sustainability of the ULBs, Municipal FinanceImprovement Programme has been launched. A Task

Force constituted under the programme has recom-mended measures to synergize all financial resourcesat city level and improve environment to access finance.As a part of the recommendation, all the ULBs underJNNURM are being rated on the basis of their finan-cial capacities and credit worthiness.

11.40 In order to strengthen the UIDSSMT, StateGovernments have been advised to get the CDPprepared for the cities covered under UIDSSMT as aVision Document. State-level Nodal Agencies (SLNAs)should develop in-house capacity to advise and guidethe ULBs in preparing viable DPRs. The State Gov-ernments should ensure adequate budgetary provi-sions in their Budget to meet State/ULBs’ share asstipulated in the guidelines. For monitoring and imple-mentation of the project and reforms at the local level,a Project Implementation and Monitoring Cell maybe established within the respective ULBs. SLNAs mayprepare a panel of consultants by following a trans-parent procedure for preparation of DPRs.

PREPARATION AND DISSEMINATION OF BESTPRACTICE DOCUMENTS11.41 The best practices under the Mission are beingdisseminated through the websites, workshops, andseminars. Apart from this, the government haslaunched an initiative called Peer Experience andReflective Learning (PEARL) to facilitate networkingamong JNNURM cities to encourage cross learningand knowledge sharing. The cities have organizedthemselves in various groups/networks having simi-lar socio-economic profile. The city networks haveselected a Knowledge Manager for the respectivegroups to anchor partnerships within and outsidethe networks for exchange of best practices in urbangovernance and reforms.

ISSUES FOR FUTURE ACTIONS• Rapid economic growth will inevitably lead to an

increase in urbanization as the cities providelarge economies of agglomeration for individualactivity. The biggest constraint on rapid growth inthe years ahead will be the inadequacy of urbaninfrastructure and its poor quality comparedwith global scenario. We have to strive for equityand inclusiveness in urban infrastructure so as to


ensure that the city-wide infrastructure systems getlinked with service networks in slums and low in-come settlements.

• The main challenge would be to bring aboutplanned urbanization for the country and creationof new growth centres around existing small andmedium towns.

• Urban reforms may be made essential for eligibilityfor assistance under all Urban InfrastructureDevelopments Schemes.

• Safe drinking water supply and sanitation facilitiesare basic needs and are crucial for achieving the goalof ‘Health for All’.

• JNNURM has the potential to transform infrastruc-ture and improve the civic amenities in selectedcities greatly. It, therefore, needs to be implementedwith vigour.

DETAILS OF SCHEMES/PROGRAMMES FORTHE ELEVENTH PLAN

NATIONAL CAPITAL REGION PLANNING BOARD(NCRPB)11.42 The key rationale for constituting an NCRPB in1985 was to reduce the rate of in-migration into theNational Capital as well as to develop the region at alevel comparable to the best in the world. Keepingin view with its objectives, the Board has preparedregional plans, 2001 and 2021, along with complemen-tary functional plans related to the key elements ofinfrastructure.

11.43 In order to implement major thrust areas ofthe regional plans, the Board is also arranging for andoverseeing the financing of selected developmentprojects in NCR through Central grants and contri-bution from the Government of National CapitalTerritory of Delhi, by recycling loan repaymentsand internal accruals. To supplement its resources,the Board has also raised resources from the capitalmarket in the form of bonds in the past.

11.44 The Government of Delhi in its Plan documenthas desired that NCRPB should contribute significantlyin the development process of Delhi by initiating anumber of inter-state projects in the NCR in the areasof power generation, water supply, sanitation, etc.

The projects identified for being financed during theEleventh Plan involve a total cost of Rs 15000 crore.Some of these projects will be taken up in collabora-tion with other stakeholders. Out of the total projectedcost of projects, it is expected that the loan compo-nent will be above Rs 11000 crore.

NATIONAL URBAN INFORMATION SYSTEM (NUIS)11.45 The major objective of the NUIS is to establisha comprehensive information system in the ULBsfor planning, management, and decentralized gover-nance in the context of implementation of the74th CAA. The following activities have been under-taken:

• Mapping at 1:10000 scale from satellite images,1:2000 scale from aerial photos, and 1:1000 scaleutility mapping for 24 towns being taken up bySurvey of India.

• Establishment of NUIS cells in State nodal agencies.• Setting up of National Urban Databank and Indi-

cator in each State nodal agency.• Capacity building among town planners for use of

modern automated methods.

11.46 So far, implementation of NUIS scheme hasbeen slow and, therefore, all stakeholders of the schemeneed to speed up the implementation of the scheme.States and UTs need to release their share for purchaseof hardware and software for the NUIS cells in Statenodal agencies and ULBs. The capacity buildingcomponent under NUIS scheme has trained 160personnel. A total of 22 programmes are proposedto be conducted to train 440 officers during 2007–08.An outlay of Rs 24 crore and Rs 9 crore has beenallocated in the Annual Plan 2006–07 and 2007–08respectively.

COMMONWEALTH GAMES11.47 Delhi Development Authority has been assignedthe task of development of Games Village, Competi-tion Venues for sports events, viz., Table Tennis,Badminton, Squash, Billiards, Snookers, etc. for theforthcoming Commonwealth Games, 2010. To developrequisite facility at sports complexes in Delhi, a provi-sion of Rs 80 crore has been made to the Ministry ofUrban Development for 2007–08.


URBAN BASIC SERVICES

STATUS OF URBAN BASIC SERVICES11.48 The quality of water and its distribution areareas that require special attention in the Eleventh Plan.Table 11.1 gives the status of city/town-wise access todrinking water. Sewerage facilities are almost absentin a large number of unauthorized and resettlementcolonies and slum and squatter settlements. At certainplaces, cost incurred by the poor to fetch water is muchhigher than for valid connection holders. Waste water

and sewage treatment and its reuse for non-potablepurposes and industries are also limited and needattention. Moreover, cattle menace, open defecation,dumping of solid wastes along roadsides, open dump-ing of medical and hazardous wastes, etc., are com-monly sighted (see Box 11.3 below). Concerted effortsare required to fill these gaps and make cities clean,healthy, and livable.

URBAN WATER SUPPLY11.49 To achieve 100% coverage of populationwith urban water supply by the end of the EleventhFive Year Plan, the following steps need to be taken:

• To bring out State Ground Water Legislation basedon the Model Ground Water Legislation broughtout by the CGWB.

• Keeping in view the NWP, the States should formu-late State Water Policy to meet drinking water needs.

• Under JNNURM, special attention should be givento cities and towns which are affected by water con-tamination due to presence of chemicals such as iron

Box 11.3Status of Urban Services

Water Supply

• As per 54th round of NSS, 70% of urban households reported being served by tap and 21% by tubewell or handpump.

• 66% of urban households reported having their principal source of water within their premises while 32% had it within0.2 km.

• 41% had sole access to their principal source of drinking water and 59% were sharing a public source.

Sewerage

• 54th round of NSS reported 26% of households having no latrines, 35% using septic tank, and 22% using seweragesystem.

• In urban areas sewerage connections varied from 48% to 70%.• According to Central Pollution Control Board, the waste water generated in 300 Class I cities is about 15800 million litres

per day while the treatment facilities exist for hardly 3750 million litres per day.

Solid Waste

• It is estimated that about 115000 metric tonnes of municipal solid waste is generated daily in the country.• Per capita waste generation in cities varies between 0.2–0.6 kg per day and it is increasing by 1.3% per annum. With the

growth of urban population, the increase in solid waste is estimated at 5%.• The solid waste generated by the million plus cities varies from 1200 metric tpd in cities like Ahmedabad and Pune to a

maximum of 5000–5500 metric tpd in cities like Delhi and Mumbai.• The per capita solid waste generation varies from 300 gm in Bangalore to 500–550 gm in Mumbai and Delhi.• Out of total waste generated in the million plus cities, hardly 30% is treated before disposal.

TABLE 11.1City/Town-wise Average Access to Drinking Water

City/Towns (Population) Average Access toDrinking Water

(%)

Class I cities (100000 and above) 73

Class II cities (50000–99999) 63

Class III cities (20000–49999) 61

Other cities/towns (<20000) 58

Source: Ministry of Urban Development, GoI.


and fluoride. Water Quality Testing Laboratoriesmay be set up in all cities and towns and existinglabs be strengthened to check water-borne diseases.

• Suitable strategy should be evolved by the States/ULBs for meeting O&M costs. Metering of watermay be made mandatory for generating sufficientrevenues. Telescopic water tariff/user charges shouldbe formulated and levied to discourage excessive useof water.

• Need to check the leakages and unaccounted water,particularly in cities where it is as high as 50%.Such losses should be minimized or eliminatedthrough intensive leak detection and rectificationprogramme.

• The State Governments/ULBs should take upreform measures under JNNURM for water andenergy audit, reuse and recycling, levy of realisticuser charges, efficient water use and its equitabledistribution, rain water harvesting, commercialaccounting systems, consumer orientation, costrecovery, artificial recharge of groundwater, etc.

• To meet the requirement of funds, efforts shouldbe made to step up the quantum of funds throughinstitutional financing, foreign direct investment,assistance from bilateral and multi-lateral agencies,newly launched Pooled Finance DevelopmentScheme, tax-free municipal bonds, PPPs, Memberof Parliament Local Area Development Programme(MPLAD) funds, etc.

MANAGEMENT OF MUNICIPAL SOLID WASTE11.50 On an average, the collection efficiency of solidwaste ranges between 70% and 90% in metro cities,whereas in several smaller cities it is below 50%. TheULBs spend Rs 500–1500 per tonne on solid wastecollection, transportation, treatment, and disposal.During the Eleventh Five Year Plan, emphasis wouldbe laid on scientific and safe disposal of waste. Wasterecycle, reuse, resource recovery, adoption of advancedtechnological measures for effective and economicaldisposal will have to be followed vigorously.

11.51 Private parties have shown encouraging re-sponse and they need to be increasingly involved. Withthe application of modern technology, the waste canbe converted into profitable products such as organicpellets, construction material, etc. To deal with the solid

waste management the States should encourage thePPP mode projects.

11.52 With rapid industrialization, growth of servicessector, and rise in incomes, the rate of waste genera-tion has gone up manifold. The following steps needto be taken for its management:

• Cities and towns should be provided with appro-priate solid waste management facilities withemphasis on use of low-energy consuming tech-nologies for processing and treatment of munici-pal solid waste.

• Compulsory production of compost from solidwaste and application of this organic manurein agriculture and horticulture to improve soilfertility.

• Implementation of the recommendations ofReport of the Inter-Ministerial Task Force on the‘Integrated Plant Nutrient Management Using CityCompost’ in managing the city garbage in asustainable manner.

• Segregation and storage of waste, door-to-doorcollection, and transportation along with appropri-ate plant design should be enforced as per Munici-pal Solid Waste Management and Handling Rules,2000. NGOs should be encouraged to provide orga-nizational support and identity to the ragpickers,who play an important role in recycling of the waste.

• Adequate land should be earmarked/allotted atthe planning stage itself for setting up of sanitaryland fills, compost plants, and other processing unitsincluding provision for future expansion.

SEWERAGE, LOW-COST SANITATION,STORM WATER DRAINAGE11.53 About 63% of the urban population has accessto sewerage and sanitation facilities as on 31 March2004. This includes both underground as well as sani-tation through septic tanks. The access to undergroundsewerage facilities is very low, that is below 30% inmany States, viz., Rajasthan, Orissa, Chhattisgarh,Madhya Pradesh, Andhra Pradesh, and West Bengal.According to the MTA of the Tenth Five Year Plan,nearly 46% of urban households have water toilets,but only 36% of the urban households are connectedto the public sewerage system.


11.54 Underground network of sewerage has devel-oped to a considerable extent in urbanized States wherecities have developed in a planned manner, viz., Delhi,Chandigarh, Greater Noida, etc. However, within thecities, large number of unauthorized colonies, resettle-ment colonies, slums, and squatter settlements areoften deprived of underground sewerage facilities.

11.55 To achieve 100% population coverage forsewerage, sewage treatment, and low-cost sanitationfacilities in urban areas during the Eleventh Plan, thefollowing steps need to be taken:

• Install more plants to treat, recycle, and reuse sewage.• Industrial and commercial establishments must

reuse and recycle treated sewage to reduce freshwater demand.

• The ULBs should amend their by-laws to make itmandatory for all residents to connect their toiletsto the existing sewerage system.

• Fringe areas of cities and colonies of economicallyweaker sections and slum dwellers should be cov-ered with low-cost sanitation facilities, either onindividual household basis or community basiswith ‘pay and use system’ with adequate mainte-nance arrangements. Necessary penal clause shouldbe enforced effectively to stop open defecation prac-tice as well as indiscriminate throwing of garbage/litter in public places.

• Targeted subsidy may be given to urban poor fortaking water supply/sewerage house service connec-tions, metering, and construction of toilets.

• Comprehensive storm water drainage system shouldbe developed in all cities and towns in order to avoidwater logging during monsoon.

INVESTMENT NEEDS FOR URBAN WATER SUPPLYAND SANITATION, SEWERAGE, DRAINAGE,AND SOLID WASTE MANAGEMENT SECTORSDURING THE ELEVENTH FIVE YEAR PLAN11.56 The total fund requirement for the implemen-tation of the Eleventh Five Year Plan schemes in re-spect of urban water supply, sewerage and sanitation,drainage, and solid waste management is estimated asgiven in Table 11.2.

AVAILABILITY OF FUNDS11.57 To improve the infrastructure relating towater supply and sanitation in the urban centres, the

government is assisting the ULBs and the State Gov-ernments through various schemes and special Cen-tral assistance (SCA). Under JNNURM, water supplyand sanitation have been accorded highest priorityamong the eligible components and almost 40% of theoutlay would be spent on water supply and sanitationsector leaving a gap of Rs 89237 crore.

TABLE 11.2Funds Requirement—Urban Basic Services

(Rs in Crore)

S. Sub-Sector EstimatedNo. Amount

1. Urban water supply 536662. Urban sewerage and sewage treatment 531683. Urban drainage 201734. Solid waste management 22125. MIS 86. R&D and PHE training 10

Total 129237


For bridging the gap, the following possible sources areidentified. Table 11.3 gives the proposed flow of funds.

TABLE 11.3Proposed Flow of Funds

Source of Funding Amount(in Rs Crore)

Central sector outlay 70000*State sector outlay 35000Institutional financing 10000Assistance from external support agencies 10000FDI and private sector 4237

Total 129237

Note: * The actual allocation provided for JNNURM is Rs 50000crore during 2005–12 out of which the amount available forUrban Water Supply, Sewerage, Solid Waste Management is ex-pected to be in the range of Rs 15000 crore. The shortfall will needto be met by other sources of finance if the objective of covering100% population with Water Supply and Sanitation facilities is tobe met during the Eleventh Plan.Source: Ministry of Urban Development, GoI.

Central Sector Outlay11.58 The Central sector outlay may be stepped upfrom the present Rs 50000 crore to around Rs 70000crore under the ongoing Central programme ofJNNURM so that great thrust could be given to watersupply and sanitation sector in the urban areas.


State Sector Outlay• Likewise, the State sector outlay which stood at

Rs 18749 crore during the Tenth Plan may bestepped up to around Rs 35000 crore.

Institutional Financing• Funds may be mobilized through national finan-

cial institutions such as LIC, HUDCO, IL&FS, etc.,to the tune of Rs 10000 crore.

Additional Assistance from ExternalSupport Agencies (ESA)• Funds may be mobilized from external funding

agencies viz. World Bank, JBIC, ADB, and otheragencies to the tune of about Rs 10000 crore.

FDI and Private Sector• In addition, foreign direct investment and private

sector funds up to Rs 4237 crore may be mobilizedto support the sector’s activities.

PROVISION OF BASIC SERVICES TO THE URBANPOOR AT THEIR WORKPLACE11.59 In all stages of planning, formulation, andexecution of water and sanitation projects, poor anddisadvantaged sections of society and SC/ST popula-tion should be included and their needs accorded toppriority. The programmes of other Central Ministriessuch as SC/ST Plans and Tribal Welfare Plan maybe suitably dovetailed with JNNURM. CDPs shouldgive special attention to the problems and needs ofthese vulnerable sections of society.

URBAN POVERTY ALLEVIATION ANDSLUM DEVELOPMENT11.60 The percentage of BPL population in the urbanareas in India has declined from 32.3% in 1993–94 to25.7% in 2004–05 (based on uniform recall period).The NSSO 61st Round shows that urban poverty hasregistered a decline in percentage terms; however, it hasincreased in absolute terms by 4.4 million persons. Thefact is that the number of urban poor is rising continu-ously since 1973–74 as per the uniform recall period.A comparison of poverty estimates based on uniformrecall period and mixed recall period is given in Tables11.4 and 11.5, respectively. The number of personsbelow poverty line in the urban and rural areas is givenin Table 11.6.

11.61 The incidence of urban poverty as well as num-ber of the urban poor has increased in Orissa andRajasthan over the 1993–94 to 2004–05 period.In contrast, both the incidence of urban povertyand the number of the urban poor have declined

TABLE 11.4Comparison of Poverty Estimates Based on

Uniform Recall Period

(Percentage of the Total Population)

1993–94 2004–05

Rural 37.3 28.3

Urban 32.4 25.7

Total 36.0 27.5

Source: Planning Commission.

TABLE 11.5Comparison of Poverty Estimates Based on

Mixed Recall Period

(Percentage of the Total Population)

1999–2000 2004–05

Rural 27.1 21.8

Urban 23.64 21.7

Total 26.1 21.8


TABLE 11.6Number of Persons below Poverty Line in

Urban and Rural Areas(Lakh)

Year Urban Rural Total

Mixed Recall Period

1973–74 600.46 2612.90 3213.36

1977–78 646.48 2642.47 3288.95

1983 709.40 2519.57 3228.97

1987–88 751.69 2318.79 3070.49

1999–2000 670.07 1932.43 2602.50

2004–05 682.00 1702.99 2384.99

Uniform Recall Period

1973–74 600.46 2612.90 3213.36

1977–78 646.48 2642.47 3288.95

1983 709.40 2519.57 3228.97

1987–88 751.69 2318.79 3070.49

1999–2000 763.37 2440.31 3203.68

2004–05 807.96 2209.24 3017.20



in the States of Gujarat, Kerala, Punjab, Tamil Nadu,and West Bengal during the same period. In otherStates, there has been a decline in the incidence ofpoverty but not in their total number (Boxes 11.4,11.5, 11.6).

11.62 A large number of workers engaged in theurban economy as self-employed in the informalsector, regular low wage/salaried workers, and casual

workers fall in the category of the urban poor. Theyplay a role in wealth creation, development of infra-structure, and providing a quality of life to the urban-ites. However, they have themselves been denied shelter,basic urban amenities, healthy urban environment, anda dignified life.

11.63 In recent decades, the gap between the urbanrich and poor has widened considerably. The EleventhPlan aspires to empower the persons engaged in theinformal sector living in urban areas by providingtraining to them to have better skills, higher produc-tivity, and higher incomes on the one hand and agreater voice in decision-making by implementingthe 74th CAA on the other hand. In this manner,an effort would be made during the Eleventh Plan tofocus the spotlight on ‘inclusive growth’ in the urbanareas.

SLUMS AND SLUM REHABILITATION11.64 As per estimates, the slum population in 2001was 61.82 million out of which the reported slumpopulation in the 640 towns and cities having popula-tion of 50000 and above is 42.58 million. Thetotal urban population of these 640 towns is 184.35million. Data pertaining to slum population, as perthe 2001 Census and the availability of housingand other basic amenities to them, are given in Tables11.12 and 11.13.

Housing for Slum Dwellers11.65 Registrar General of India has for the first timecollected slum data in the 2001 Census for citieshaving urban population of 50000 and more. Box11.7 provides the gist of slum population data in thecountry.

Box 11.4Objectives for Urban Poverty Alleviation

The Eleventh Plan has the following objectives for theurban poor:

• To provide them affordable shelter and decent livingand working conditions.

• To make adequate provision of land for the poor inthe Master Plan itself.

• To help in developing self-employment enterprises andjob creation for the wage employment earners.

• To protect the economic interest and safety of womenand other vulnerable sections of our society.

Box 11.5Slums

Slums are housing clusters having insufficient facilities ofhygiene, toilet, drinking water, sanitation, etc.

Box 11.6Integrated Slum Development

Some of the measures that are required to be pursued andstrengthened further for integrated slum development are:

• Creating and updating database on slums.• City-wise perspective and integrated slum development

plans.• Augmenting and facilitating access to services for slum

dwellers.• Granting tenure security to slum dwellers.• Insitu upgradation and resettlement options for slum

improvement.• Using land as a resource for housing and shelter devel-

opment for slum dwellers.

Box 11.7Spread of Slums

• 640 towns spread over 26 States/UTs have reported ex-istence of slums.

• 42.6 million people consisting of 8.2 million house-holds reside in slums of these towns.

• It is a coincidence that both Census of India in 2001and NSSO in 2002 found that every seventh person inurban India is a slum dweller.


REVIEW OF SCHEMES11.66 A number of social housing schemes for poor—as indicated in the Table 11.7—have been undertakenby the GoI over the last two decades:

TABLE 11.7Social Housing Schemes

S.No. Name of the Scheme Started in

1. Indira Awas Yojana 19902. EWS Housing Scheme for beedi workers 1991

and hamals3. National Slum Development Programme 19964. A two million Housing Programme for EWS/LIG 19985. PM Gramin Awas Yojana 20006. Valmiki Ambedkar Awas Yojana (VAMBAY) 20017. JNNURM (BSUP and IHSDP) 2005

Source: Ministry of Housing and Urban Poverty Alleviation(MoHUPA), GoI.

11.67 These and other policy frameworks and subse-quent development of programmes and schemes haveyielded fairly positive results in the area of housingand human settlements. There has been a quantumjump in the supply of serviced land, habitable shelter,and related infrastructure, as detailed in the Box 11.8.

11.68 Effective measures are needed to stop the mush-rooming of new slums. Providing affordable urbanservices to slum dwellers and granting them tenurerights will be the focus of the Eleventh Plan. State gov-ernments have to ensure that the ULBs earmark a partof their budget for the urban poor. Urban poverty cellshave already been created at district level. Their func-tioning has to be made effective. A National Slum

Policy needs to be formulated so as to evolve a holisticapproach towards slum improvement.

11.69 To promote integrated city development and toenable the people living in slums to gain access tobasic services, a number of schemes and programmeshave been launched from time to time, for exampleEnvironmental Improvement of Urban Slums, Na-tional Slum Development Programme (NSDP),Integrated Low Cost Sanitation Scheme (ILCS), etc.

PROGRAMMES AND SCHEMES OF URBANPOVERTY ALLEVIATION IN THE ELEVENTH PLAN

SWARNA JAYANTI SHAHRI ROZGAR YOJANA (SJSRY)11.70 This CSS, launched in 1997, was meant to pro-vide gainful employment to the urban unemployed/under-unemployed (below the urban poverty line)through:

• encouraging setting up of self-employment ventures;• provision of wage employment.

11.71 It relied on creation of suitable communitystructures and delivery of inputs through the ULBs.In the Tenth Plan, there was a target of assisting fourlakh urban poor in setting up individual/group microenterprises and imparting skill training to five lakhurban poor.

11.72 Under self-employment component of SJSRY,891679 beneficiaries have been assisted by now and934649 persons were provided various types of skill

Box 11.8Housing Construction and Ownership

• Under the Valmiki Ambedkar Awas Yojana (VAMBAY) of the GoI, a subsidy of Rs 932.56 crore has been released forconstruction of 459728 dwelling units and 65580 toilet seats since the inception of the scheme up to 2005–06.

• Under the NSDP, a total amount of Rs 3089.64 crore has been released to the States/UTs covering 436.28 lakh urban poorsince inception of the scheme up to 2005–06.

• The period 1991 to 2001 witnessed a net addition of 19.52 million dwelling units in the urban housing stock, amountingto average annual construction of 1.95 million houses.

• The share of ownership housing in urban areas has increased from 63% in 1991 to 67% in 2001 (Census 2001).• It is important to note that households having one-room accommodation declined significantly in urban areas from

39.55% to 35.1% during the period 1991–2001. This is a result of upward shift of accommodation and accelerated supplyof housing stock.


trainings. So far, 52701 Development of Women andChildren in Urban Areas (DWCUA) groups havebeen formed and 198314 women beneficiaries havebeen assisted under this scheme for setting up of groupenterprises. A total of 177508 Thrift and Credit Soci-eties (T&CS) have also been formed under SJSRY. Thenumber of beneficiaries covered under the Commu-nity Structure Component of SJSRY is 337.40 lakh andthe number of man-days of work generated under thewage employment component of SJSRY is 583.06 lakh.

11.73 A comprehensive evaluation of SJSRY schemeon an all-India basis was carried out in 2005–06 byHuman Settlement and Management Institute. Themain findings of the evaluation are: (i) the pro-grammeis working well in some of the States; (ii) most of thebeneficiaries of training are below 30 years; (iii) womengroups market their products by themselves except inthe eastern and North Eastern States; (iv) the forma-tion of DWCUA groups has had a positive impact onwomen; (v) T&CS are very active in promoting smallsavings and resolving disputes; (vi) non-achievementof physical targets in some States is due to inadequateskill training, wrong choice of projects, lack of public-ity, etc. (see Box 11.9).

11.74 SJSRY is being revised in terms of the followingfeatures:

Self-employment Component• The self-employment component of the scheme will

be made more market driven in terms of market

surveys which will assist micro entrepreneurs tolocate niche segments where there is potentialdemand for their products and services.

• Clusters of micro production units will be devel-oped in keeping with the factors of localization per-taining to traditional skills and in terms of townsrenowned for given products.

• Appropriate or intermediate technology inputs willbe used to strengthen the technological base ofselected clusters in terms of common facilitiescentres providing critical machinery/equipmentrequired for common use as well as ensuring sup-ply of quality raw materials at reasonable prices.These common facilities centres would be run byassociations of micro entrepreneurs themselvesrelated to the selected economic activity.

• High-quality Small Enterprise Advisory Serviceswill be provided to the micro entrepreneurs.

• Resource institutions will be selected all over thecountry for providing upgraded technical skillscombined with certification.

• Self-employment efforts will be buttressed byencouraging T&CS at the community level.

• Micro entrepreneurs will be encouraged to developtrade-based organizations.

• The mission approach of the ‘Kudumbshree’ modelof Kerala and other best practices in different partsof the country will be adopted for suitable applica-tion under SJSRY.

• Design and development services from IITs andother institutions will be sought for developmentof mobile vending outlets.

• An integrated approach will be adopted withspecial attention to backward and forward linkagesunder the aegis of a designated Institute and aspecific Task Force.

11.75 Wage-employment Component• High-quality training for proficiency in technical

services will be organized with leading institutionspreparing detailed training modules for specifictrades.

• Training in a wide variety of trades such as con-struction, beauty and skincare, hair styling, hospi-tality, tourist guides, security, transport, andsecretarial trades will be encouraged along withplacement services.

Box 11.9New Focus in SJSRY

In its present form, the scheme has not succeeded in pro-viding effective employment opportunities to the urbanpoor. It is now proposed to bring new focus into thescheme in keeping with the fact that urban areas havedeveloped new skill requirements. Towards this end,43 new trades have been identified in which it is proposedto build capacity by:

• Skill development—PPP mode.• SHGs.• Self-employment skills plus facilitation of credit for

setting up self-employment.


• Special emphasis will be laid on construction ofcommunity assets in low-income neighbourhoodswith strong involvement and participation of localcommunities.

11.76 Structural and OrganizationalComponent• Strengthening the delivery mechanism by improv-

ing the competency level and outreach of the Pro-gramme Management Units at the State level andProgramme Implementation Agencies (PIAs) at theULB level.

• There is need to earmark 25% of the budget for theurban poor in municipal budgets.

• There is need for convergence of services to theurban poor with special reference to health, educa-tion, and social security.

• The National Building Organization (NBO) needsto be strengthened for providing statistical andmonitoring inputs for effective implementation ofthe revised SJSRY.

• Suitable networking with the UNDP-fundedNational Strategy for the Urban Poor Project aswell as UN and other multilateral/bilateral projectsis required for focused thrust on capacity buildingand innovative and experimental pilot projects.

11.77 Given the fact that 25.7% of the urban popula-tion as per uniform recall period lives below thepoverty line, a concerted effort need be made duringthe Eleventh Plan for creation of at least 30 millionadditional jobs in the urban areas. The outlay for alle-viation of urban poverty during the Eleventh Planneeds to be suitably enhanced. The revised SJSRY willbe market-led combined with an integrated provisionof backward and forward linkages.

11.78 The Ministry of HUPA also proposes to launcha scheme for the ‘Skill Training for Employment Pro-motion amongst the Urban Poor’ during the EleventhFive Year Plan as a part of the National Skill Develop-ment Mission specially targeting the urban poor inthe development of their skills to enable them accessmarket-based employment opportunities or undertakeself-employment to improve their living conditionsand overcome poverty. This will make available skilledand semi-skilled manpower needed by the industry

and service sectors in response to changing global,national, and local imperatives and opportunities. Thiswill lead to reduction in unemployment rate amongthe urban poor, especially women, and will enhancetheir productivity and real wages making the economicgrowth inclusive.

11.79 URBAN STATISTICS FOR HR ASSESSMENTSCHEMEAims at the development and maintenance of a na-tional database, MIS, and knowledge repository onurban poverty, slums, housing, construction, and otherurbanization-related statistics. Its key objective is tosupport the government with an information base andknowledge inputs for planning, policy-making, projectdesign, formulation, implementation, monitoring,assessment, and evaluation, particularly in the contextof programmes relating to urban poverty, slums, andhousing. The scheme was earlier known as MIS onHousing Data, Research and Survey.

11.80 FUTURE APPROACH/STRATEGIES• There is need to address the issue of urban poverty

alleviation in a systematic, scientific, and time-bound manner by adopting the Mission approachas is being done in Kerala through the ‘Kudumbshree’model. The approach has to be target-orientedwith specific focus on primary issues such as skillupgradation, entrepreneurship development, wageemployment, etc.

• Skill development has to be correlated to the de-mands of industry and service sector in and aroundthe city. For this purpose, periodic labour marketsurveys have to be carried out in collaboration withthe private sector by professionally competentorganizations/NGOs so as to devise appropriatetraining modules for building skills in the relevantdisciplines, where the demand exists or is projected.This exercise is likely to lead to a pool of humancapital which can be appropriately utilized in thecontemporary labour market.

• The 74th CAA envisages that the functions of ur-ban poverty alleviation and improvement of slumsand their upgradation, including the provisioningof urban basic amenities to the poor, are amongthe key functions of the municipalities. Therefore,the ULBs have to compulsorily make appropriate


provisions in their budget. ULBs have to follow aconvergence approach in formulating service deliv-ery to the urban poor by optimum utilization ofboth financial and manpower resources availablein various Central and State sector schemes andprogrammes.

• Any urban poverty alleviation programme withoutadequate manpower equipped with the capability,capacity, and sensitivity to effectively implementsuch social sector programmes will not succeed.Therefore, it is absolutely necessary for Urban Pov-erty Alleviation Cells at the ULB/district/State levelto have trained and dedicated manpower.

• City-specific urban poverty reduction plans needto be prepared by the ULBs and fund release has tobe demand driven.

• Although the urban poor is the most vulnerablesection of society, the delivery of health services isalmost negligible to them. Therefore, there is needto work out a comprehensive health and accidentinsurance plan/scheme for the entire urban poor asa special package to resolve their health-related is-sues. There is also need to develop a social securitynetwork for this most vulnerable section, speciallythe single women, widows, aged, disabled, weaker,and minority sections.

URBAN HOUSING11.81 Role of Housing: Housing, besides being a verybasic requirement for the urban settlers, also holds thekey to accelerate the pace of development. Status ofhousing stock and basic amenities are provided inTable 11.13. Investments in housing, like any otherindustry, have a multiplier effect on income and em-ployment. It is estimated that the overall employmentgeneration in the economy due to additional invest-ment in the housing/construction sector is eight timesof the direct employment (IIM-Ahmedabad Study2005). Construction sector employment is growing atthe rate of 7% per annum. Housing provides oppor-tunities for home-based economic activities. Housingalso has a direct impact on the steel and cement,marble/ceramic tiles, electrical wiring, PVC pipes,and various types of fittings industry, which makea significant contribution to the national economy.Contribution of the housing industry to the GDP issummarized in the Box 11.10.

Box 11.10Housing Stock

• Less than one-third of India’s people live in cities andtowns.

• These areas generate over two-thirds of the country’sGDP and account for 90% of government revenues.

• As per CSO estimates, housing sector’s contributionto GDP in the year 2003–04 was 4.5% (3.13% forurban areas) at current price.

• Housing stock in 2001 was 50.95 million (for 55.8million urban households).

11.82 The National Urban Housing and Habitat Policyprovides the basic framework for achieving the objec-tive of ‘shelter for all’. The policy was evolved in 1998with the long-term goal of eradicating houselessness,improving the housing conditions of the inadequatelyhoused, and providing a minimum level of basic ser-vices and amenities to all. It was formulated to addressthe issues of sustainable development, infrastructuredevelopment, and for strong PPPs for shelter deliverywith the objective of creating surpluses in housingstock and facilitating construction of two milliondwelling units each year in pursuance of the NationalAgenda for Governance. However, the housing sectorhas witnessed several changes since then. The 1998National Housing Policy has been replaced by aNational Habitat and Housing Policy, 2007 with landand the development of civic amenities to make landhabitable as its two critical elements.

11.83 In order to improve the quality of life in urbanareas, it is of critical significance that the housing stockis improved through urban renewal, in situ slum im-provement, and development of new housing stock inexisting cities as well as new townships.

Magnitude of Housing Need11.84 Considerable efforts were made during theTenth Plan to enlarge the resource base and initiateinnovative institutional mechanisms to augment hous-ing delivery in urban areas. Focused efforts were alsoinitiated to cover the poor and vulnerable groups ofsociety to enable them to access basic shelter relatedservices. Fiscal concessions coupled with legislativemeasures were also initiated to encourage increased


conversion from one use to another is cost effectiveand efficient. Computerization of land records anddata and e-governance should also constitute impor-tant elements of the urban land policy.

National Land Policy11.87 We have to evolve a National Land Policy whichwill allow both public and private developers to le-gally purchase land for conversion into urban habitatsand townships through transparent rules and regula-tions. Inadequate availability of serviced land in theurban areas is a major constraining factor in takingup housing projects for the poor.

11.88 In the process of spatially delimiting the spe-cific areas of urban extensions of existing towns andthe areas for new townships, care needs to be takenthat as far as possible, prime agricultural land is notutilized but more emphasis is laid on using degradedland for urbanization. Even today, the country isimporting certain basic food items from time to time.Further, each State/UT which acquires land must putinto place a suitable resettlement and rehabilitationpolicy for the displaced rural families while develop-ing urban extensions or new townships.

11.89 Care also needs to be taken that rivers andtheir flood plains, other water bodies, and naturaldrainage systems are not disturbed during theprocess of urbanization. Moreover, it is also essentialto enhance the green lungs of cities as well as developgreen belts around urban settlements with a viewto stemming indiscriminate urban sprawl. Citiesand towns should invariably be surrounded by arural hinterland so that the ecology of the sub-regionis preserved. Access to micro finance has a directcorrelation with the land title. Therefore, the StateGovernments need to facilitate security of land tenurefor the urban poor. The title has to be mortgagableto access credit.

Investment Required11.90 For estimating the investment requirementsfor the Eleventh Plan, the Working Group on UrbanHousing made different assumptions on unit cost ofconstruction of houses in million plus cities and otherurban areas (see Box 11.12 below).

investments in housing by individuals and corporates.However, despite many policy measures and initiatives,the coverage of urban poor with these intendedbenefits has not been achieved to the desired extent.Pressure on urban land has also been increasing dueto market forces supported by upward trend in eco-nomic growth (see Box 11.11 below).

Box 11.11Housing Shortage and Requirement

• According to the report of the Technical Group onestimation of housing shortage constituted in thecontext of formulation of the Eleventh Five-YearPlan, housing shortage is estimated to be around 24.71million. About 99% of such households are fromEWS and low income groups (LIG).

• During the Eleventh Plan period, total housing require-ment, including the backlog, is estimated at 26.53million.

Land Availability, Land Tenure, andLand Reforms11.85 Access to land and legal security of tenure arestrategic prerequisites for the provision of adequateshelter for all and for the development of sustainablehuman settlements affecting both urban and ruralareas. The present policy of the Central Governmentlays stress on an enabling approach. It is for the StateGovernments to bring in the required institutionalreforms and legislative measures to augment housingboth by State agencies and the private sector.

11.86 While recognizing the existence of differentnational laws and/or systems of land tenure, govern-ments at the appropriate levels, including local authori-ties, have to strive to remove all possible obstacles thatmay hamper equitable access to land and ensure thatequal rights of women and men related to land andproperty are protected under the law. The failure toadopt, at all levels, appropriate rural and urban landpolicies and land management practices remains aprimary cause of inequity and poverty. Urban plan-ning tools including master planning, zoning, andregulations are not enough to make land availablein pace with the rapid urbanization, resulting ininsufficient land supply and increase in land prices.It is important to have flexible land policy wherein


11.91 During the Eleventh Five Year Plan, integratedefforts have to be made by the Central and State/UTgovernments to create an integrated and holisticapproach on human settlements which adequatelyaddress issues of land, finance, legal, and regulatoryframework, technology support, and PPP. However,it has to be understood that there can be no one solu-tion and various options and initiatives would beneeded based on national and local priorities.

Housing Market11.92 The government has to create an enablingframework for a well-functioning housing market.Flexible instruments for the regulation of housingmarkets, including the rental market, taking intoaccount the special needs of vulnerable groups needto be developed.

Housing Finance11.93 With the introduction of reforms in the bank-ing sector, considerable improvement has been madein enlarging access to finance for housing by individual

families and also through co-operatives as well as pri-vate developers. In this context, it is pertinent to notethat the RBI requires commercial banks to lend 3% ofthe incremental deposits of the commercial banks tobe deployed to priority sector lending including financ-ing housing by individuals and others includingco-operatives and private sector. Besides, RBI also reck-ons investments made by banks in the bonds issuedby HUDCO under priority sector lending. Box 11.3provides some details of financing of housing loans.

11.94 HUDCO’s housing portfolio covers a widerange of target groups spread all over the country bothin urban and rural areas. During the Eleventh Planperiod, HUDCO proposes to extend a large quantumof assistance for supporting the housing and urbandevelopment requirements both in urban and ruralareas. The proposals envisage a total sanction ofRs 74596 crore during the Eleventh Plan period forboth its housing and urban development programmes.Of this, an amount of Rs 14919 crore has been tenta-tively identified for its housing operations.

FLOW OF FUNDS FOR HOUSING11.95 In view of the current economic and monetaryscenario, it is expected that the housing financedisbursals by banks, HFCs, and co-operative sectorinstitutions would grow at a rate of about 15% perannum during the Eleventh Plan period. Takingthis into account, it is estimated that the flow of creditdisbursal from these institutions would be aboutRs 7.75 lakh crore (gross flow of funds) during2007–12. These projected fund flow figures include

Box 11.13Financing of Housing Loans

• Most of the clients of Housing Finance Institutions/banks under retail home loans belong to MIG/HIG categories andhousing loan finance still remains unaffordable in a large way to the EWS/LIG sections.

• Only 0.2% of housing loans extended by HFCs are of value less than Rs 50000 and about 7% of housing loans is of valuebetween Rs 50000–100000.

• More than 73% of housing loans extended by HFCs is of value exceeding Rs 3 lakh and about 93% of value exceedingRs 1 lakh.

• The fastest growing housing value bracket is between Rs 10 lakh to Rs 25 lakh.• This highlights the need to evolve a system or a scheme for financing housing loans on a large scale for the lower income

groups whose affordability for housing loans falls in the range below Rs 3 lakh, as over 90% of the housing shortage is onaccount of EWS/LIG.

Box 11.12Investment Requirement

The total investment requirement for meeting the hous-ing requirement would be of the order of Rs 361318.10crore consisting of Rs 147195 crore required for mitigat-ing housing shortage at the beginning of the Eleventh Planand Rs 214123.10 crore for new additions to be madeduring the Eleventh Plan period (this includes pucca,upgradation of semi-pucca, and kutcha housing units).


multiple counting and resale of properties, in the sensethat cross-funding/bulk borrowing is involved amongthe various institutions. It is, therefore, assumed thatthe net flow of funds to the housing sector fromformal sector institutions would be 50% of the grossflow of funds for construction of new houses. Thiscomes to approximately Rs 2.90 lakh crore, which is80% of the total investment requirements for urbanhousing for the Eleventh Plan.

RESOURCE MOBILIZATION11.96 Some corrective measures including legislativeand regulatory, outreach related, and those related toexpansion of housing finance would be required topromote larger flow of funds to accelerate supply ofhousing to a cross-section of households.

11.97 Liquidity of housing finance with particularreference to EWS, low-income group, and middle-income group households has to be improved so thatfinancial institutions are in a position to supply therequisite funds. Development of Secondary MortgageMarket is important in this regard. Recognizing therole of securitization as a source of funding, initiativesfor developing the secondary mortgage market havealready been taken by the NHB. The government needsto also provide a conducive and supportive fiscal andregulatory framework for banks and other participantsto actively engage in Residential Mortgage BackedSecuritization transactions.

ROLE OF PRIVATE SECTOR AND FDI11.98 The Eleventh Plan focuses on clearing the back-log in housing and infrastructure assets includingup-gradation activities. Institutions such as NationalReal Estate Development Council (NARDCO) and theConfederation of Real Estate Developers Associationof India are playing an important role in regulatingthe activities of private developers by accrediting themand also by rating such institutions based on theirexperience and capacities. The GoI has permitted 100%FDI for development of townships including construc-tion of development projects, subject to minimumcapitalization, minimum land/built up area, etc. How-ever, to encourage larger inflow of FDI, there is needto minimize the procedural delays in sanctions andapproval of projects.

ROLE OF CO-OPERATIVES11.99 The co-operative housing movement has re-ceived support over consecutive Five Year Plans and astrong institutional framework is getting evolved withinthe co-operative movement. The performance of hous-ing co-operatives is highly influenced by the quantumof funds available to them. During the first three yearsof the Tenth Five Year Plan, that is, 2002–03, 2003–04,and 2004–05, the Apex Co-operative Housing Federa-tions could raise an amount of Rs 1774.43 crore fromvarious funding agencies such as LIC, NHB, HUDCO,Commercial and Co-operative Bank, and other sources.

11.100 Community-linked Finance Facility (CLIFF)which is a financial mechanism that facilitates accessto capital by organizations of the urban poor isnow in its third year of operation in India. As ofDecember 2004, CLIFF capital funds had supported10 community-led development projects; eight hous-ing developments, providing safe, secure, and afford-able shelter with secure tenure for 2816 households;and two sanitation projects designed to benefit over200000 families living in slums in Mumbai and Pune,both in the State of Maharashtra.

RENTAL HOUSING11.101 One of the major constraints in the develop-ment of housing is the rent control legislation in manyStates. Rental housing in the urban areas needs to bepromoted through enabling legislative and adminis-trative measures to serve a wide cross-section of popu-lation in need of housing during their stay in cities.Model Rent Control Act needs to be advocated exten-sively by the States with suitable variations to suit thelocal requirements. The State Governments need toencourage public housing institutions, corporatebodies, educational institutions, and private sectoragencies, through fiscal incentives and soft loans, totake up rental housing for specific groups under theircoverage and focus.

HOUSING TECHNOLOGY11.102 The BMTPC was established in 1980 with theobjective of promoting cost-effective, environment-friendly, energy-efficient, and disaster-resistant tech-nologies and building materials for sustainable habitatdevelopment. Around 39 technologies relating to


innovative building materials have been developedand licensed to private entrepreneurs for commercialproduction. About 12 technologies are in various stagesof development. A recently developed technologypertains to bamboo mat corrugated sheets for roofingand is a substitute for asbestos or iron corrugated sheets.Further, the Council has successfully completed 252demonstration houses under Valmiki Ambedkar AwasYojana (VAMBAY) at Bangalore using cost-effectivetechnologies. The Council has also completed 100demonstration houses at Dehradun (Uttarakhand)and 70 demonstration houses at Nagpur (Maharashtra)under VAMBAY. The construction of 270 demons-tration houses at Bilaspur (Chhattisgarh), Trichy(Tamil Nadu), and Kodulu (Karnataka) are underprogress.

11.103 The efforts made by BMTPC through an inte-grated approach involving simultaneous action forstandardization, grading awareness, promotionthrough governmental recognition in terms of policysupport and fiscal incentives have certainly enhancedacceptability and have demonstrated the efficacy ofan integrated system of technology transfer. Use ofalternative materials such as fly ash, bricks, blocks,and simple prefab systems for slabs/roofing needs tobe further encouraged. Flexibility should be extendedto building and construction material standards.

11.104 A major achievement of BMTPC has been thepreparation of Vulnerability Atlas of India for formu-lating disaster mitigation plans and establishingtechno-legal raging in disaster-prone areas. ThisAtlas has been revised in digitized format with latestdata. As an extension of the Vulnerability Atlas, it hasbrought out the Landslide Hazard Zonation Atlas ofIndia. BMTPC has also formulated guidelines forconstruction of safer and durable houses to withstandearthquake/cyclone. During the Eleventh Plan,BMTPC proposes to focus on up-scaling and mod-ernization of home-grown production technologies,economy and efficiency in housing/building construc-tion projects, use of bamboo in housing and buildingconstruction and vulnerability reduction, risk assess-ment, and disaster resistance construction. Besides,it will take steps for improving the design and layoutof EWS/LIG houses. The total requirement of funds

for BMTPC for this purpose is estimated at Rs 55.19crore.

11.105 The Hindustan Prefab Limited (HPL) was setup as the Hindustan Housing Factory Limited in 1953and was given the status of a PSU in 1955. The com-pany was re-titled as HPL in 1978. The objective ofHPL is to develop cost-effective prefabricated build-ing components. HPL is currently in the process ofrestructuring and modernizing its operations vis-à-visprefabricated building components. It is expected thatthe company will continue this focus in the EleventhPlan, while at the same time, moving into the areas ofon-site supervision, project management services,turnkey construction projects, preparation of DPRsof housing and infrastructure projects, projectappraisal, and training in construction trades.

POLICY MEASURES AND STRATEGY FORADDRESSING THE PROBLEMS OF SLUMS11.106 JNNURM is the single largest initiative everlaunched by the GoI to address the problems of urbanhousing, infrastructure, and basic services to thepoor in 63 cities and towns in a holistic manner.JNNURM comprises two broad segments, namely(i) the Sub-Mission on Urban Infrastructure andGovernance and (ii) the Sub-Mission on BasicServices to the Urban Poor (BSUP) covering 63 iden-tified cities. The non-Mission cities and towns arecovered under the UIDSSMT and Integrated Housingand Slum Development Programme (IHSDP). TheMoHUPA is the nodal ministry for BSUP and IHSDPprogrammes which cater to housing and basic ameni-ties to urban poor, especially slum dwellers. Theseschemes/programmes will, in addition to improvedhousing, also cater to other basic services such as sani-tation, water supply, sewerage, solid waste disposal, etc.

11.107 Interest subsidy scheme for housing the urbanpoor has been proposed during the Eleventh Plan soas to provide an interest subsidy of 5% per annum, fora period of five years only, to commercial lenders forlending to EWS/LIG segments of the urban areas.Interest subsidy is expected to leverage markets fundsto flow into housing for poor. The scheme is expectedto add 15 lakh houses to the housing stock during theEleventh Plan.


Integrated Low-cost Sanitation Scheme11.108 The low-cost sanitation scheme operating dur-ing the Tenth Plan, with the objective of liberatingmanual scavengers from the obnoxious and age oldpractice of manual carrying of night soil, is in the pro-cess of being revised. The current scheme involves sub-sidy of 45% for the EWS beneficiaries and 25% for theLIG beneficiaries for construction of two-pit pourflush units up to the plinth level. The under revisedscheme subsidy for the super structure beyond theplinth level is also provided. The upper ceiling cost willbe Rs 10000 to enable construction of a complete unitof two-pit pour flush latrine with super structure. Suit-able additionality in cost for constructing a two-pitpour flush latrine in hilly areas would be provided. Inthis manner, the ILCS will be more comprehensive, andis expected to complete the process of liberation frommanual scavenging in the country.

URBAN PLANNING AND MANAGEMENT11.109 The United Nations has projected that between2000 and 2030, India’s urban population will increasefrom 282 million to 590 million (assuming moderate2.5% compound annual growth rate). Lookingforward, one facet of India’s urban planning challengeis to accommodate an additional 10 million urbandwellers per year, provide them with adequate publicservices and infrastructure, create opportunities foreconomic development, and ensure that urbanizationis environmentally sustainable.

EMERGING ISSUES IN URBAN PLANNING ANDMANAGEMENT11.110 The 74th CAA 1992 is a historic piece of legis-lation that provides for a democratic and participa-tory planning process so as to incorporate the needsof the people, particularly poor and socially disadvan-taged groups, in the planning process. The Act stipu-lates the setting up of District Planning Committeesand MPCs for integration of spatial and economicdevelopment as well as rural and urban planning,while keeping the needs of environmental conserva-tion in view.

11.111 State governments need to take concretesteps to constitute and functionalize the MPCs andDistrict Planning Committees. In this regard, Urban

Development and Plan Formulation and Implemen-tation Guidelines brought out by the Ministry ofUrban Development are relevant which have, in fact,duly incorporated the provisions of the 74th CAA.

THRUST AREAS OF THE ELEVENTH PLAN11.112 In order to make the urban planning anddevelopment process sustainable, it would be appro-priate to interlink the planning framework compris-ing national-level spatial strategies, regional-levelstrategy plans, metropolitan regional strategy plans,and city- and ward-level land use and developmentplans.

11.113 For an effective urban planning system, thereis need to have inter-related plans at three levels,namely, perspective/structure plans (20–25 years),short-term integrated infrastructure developmentPlans (five years) co-terminus with the NationalFive Year Plans, and plans of specific projects andschemes.

11.114 The national spatial strategy should incorpo-rate policies for industrial location and development,employment generation, human settlement pattern,and structure and infrastructure development, bothfor rural and urban areas. The State spatial plansshould be prepared by taking into account demo-graphic and economic potentials, broad land use con-figurations, infrastructure requirements, and projectimplementation schedules including mechanism forthe PPPs.

11.115 Each district should prepare a District Devel-opment Plan that integrates the plans for its constitu-ent urban and rural areas as well as the sectoralallocations for various schemes under the purview ofexisting district agencies.

11.116 The Metropolitan Development Plan shouldbe prepared on the basis of plans prepared by Munici-palities and Panchayats under the metropolitan areaand in the context of overall objectives and prioritiesset by the Central and State Governments.

11.117 The legal and institutional framework shouldprovide the municipalities with adequate infrastructure


and manpower to undertake the preparation of theseplans. Further, the process of preparation of develop-ment plans should be facilitated by developing urbanand regional information system and providing accessto remotely sensed data, aerial photographs, GIS, set-ting up MIS cells to build database at national andState level, etc. Evolving suitable mechanism for strongdatabase for all cities/towns with regard to coverageof urban population with water supply, sewerage,drainage, and solid waste management facilities is mostessential in the wake of the large number of infrastruc-ture projects that are being considered by differentStates.

PUBLIC HEALTH ENGINEERING (PHE)TRAINING PROGRAMME11.118 The scope of PHE training programme needsto be widened so as to provide requisite trainingfor increasing the skills and expertise of all personnelinvolved in the water supply and sanitation sector. Theinfrastructure being developed by various ULBs/Statedepartments for drinking water supply, sewerage, sani-tation, drainage, sewage waste management underJNNURM would require more qualified and trainedmanpower for better planning, designing, implemen-tation, and O&M of water supply and sanitationschemes.

ROLE AND INVOLVEMENT OF EXTERNALSUPPORT AGENCIES11.119 Technical and financial assistance from exter-nal support agencies such as WHO, UNDP, WorldBank, ADB, and bilateral agencies needs to be exploredon a case to case basis. It is also essential that the exter-nal donor agencies cut short their processing/decision-making time to less than a year, so that projects plannedunder JNNURM are able to get financial and techni-cal support of the external donor agency without ham-pering the progress of project implementation.

LINKING OF BUDGET PROVISIONS OF MINISTRYOF URBAN DEVELOPMENT AND MINISTRY OFDONER MEANT FOR NORTH EASTERN STATESAND SIKKIM WITH JNNURM11.120 The 10% lump sum pool of resources ofMinistry of Urban Development and Non-LapsableCentral Pool of Resources (NLCPR) under Ministryof DoNER meant for North Eastern States and Sikkim

provide funding for creation of urban infrastructureincluding water supply, sewerage, drainage, and solidwaste management on the same pattern of fundingas that of JNNURM, that is 90:10 basis. These pro-grammes need to be integrated with JNNURM toavoid duplicity in projects by different ministries andadherence to projects based on City DevelopmentPlans.

ROLE OF IT IN EFFICIENT GOVERNANCE ANDIN PROVISION AND MANAGEMENT OFURBAN SERVICES11.121 With the use of modern technology there havebeen perceptible changes in urban governance. Theadvent of digital technology coupled with the avail-ability of various modes of fast communication suchas Internet, intranet, cellular phones, and menu-basedsoftware has revolutionized the concept of governance.There has also been a change in the outlook of admin-istrators and policy makers in adopting latest technol-ogy, and go for paperless work and make governancemore citizen-friendly. E-governance encompasses thestrategic and systematic use of modern ICT by thegovernment to improve the efficiency, transparency,and accountability in its functioning and interface withcitizens.

MUNICIPAL GOVERNANCE AND REFORMS

THE CONSTITUTION (SEVENTY-FOURTHAMENDMENT) ACT (CAA)11.122 The Act has ensured decentralization andsuccessfully created a set up of democratic institutionsof self-government. However, despite 15 years ofenactment, most of the States are yet to implement itsseveral provisions. While the CAA envisions decentrali-zation of functions, finances, and functionaries toenable the ULBs to function as ‘institutions of self-government’, in reality, fiscal and administrativedecentralization have lagged behind political decen-tralization. The amended Municipal Acts do notspecifically assign functions and financial powers tothe ULBs, including town planning. To achieve the twinobjectives of ambitious growth paired with inclusivegrowth, the country needs to functionalize the insti-tutional framework that fosters livable, bankable, andcompetitive cities.


INVOLVEMENT OF COMMUNITY AND ELECTEDREPRESENTATIVES IN DECISION-MAKINGAND IMPLEMENTATION11.123 The CAA has empowered elected representa-tives and the community leaders with decision-making powers through institutional frameworkssuch as Ward Committees, MPCs, and District Plan-ning Committees. Now from a ‘top-down’ approach,the emphasis has thus shifted to the ‘bottom-up’approach.

SKILL UPGRADATION AND CAPACITY BUILDING OFTHE ULBS11.124 Lack of skilled manpower to undertake vari-ous additional tasks entrusted to the ULBs is a causeof concern. Many of the ULBs have only one or twoengineers for preparing projects and almost notown planner for preparing City Development Planand Project Reports. During the Eleventh Plan,emphasis would be laid on the capacity building ofthe functionaries of the ULBs. There is a need toset up an apex agency to co-ordinate the activitiesof all national- and State-level training institutions.The Administrative Reforms Commission has pro-posed the creation of three to five year ‘urban gover-nance capacity building programmes’ to be initiatedby the Central and State Governments. Deficienciesof the ULBs need to be addressed through variouscapacity building program-mes under JNNURM andother CSS.

INDEPENDENT REGULATORY INSTITUTIONS11.125 An independent regulatory institution withprofessional urban managers is needed at the Statelevel to ensure that the ULBs operate with autonomybut within the framework decided by the independentregulatory institution. It can decide parameters suchas framing minimum and maximum limits forvarious types of local taxes, fees, user charges, admin-istrative expenditure, etc. Setting up the regulatoryinstitution can go a long way in improving the perfor-mance of local bodies in delivery of civic services topeople.

PREPARATION OF OPERATING MANUAL FOR ULBS11.126 The independent regulatory institution forthe ULBs can be entrusted with the responsibility

of preparing operating manuals relating to variousservices being provided by the ULBs. The operatingmanuals can definitely improve the quality of assetsthat are being created by the ULBs. To ensure qualitycontrol and uniformity, the manual may lay downstandards for all materials that are used for creationof assets. Operating manuals need not only be forengineering aspects but can cover the whole gamut ofservices in which the ULBs are involved.

MUNICIPAL FINANCE11.127 Municipalities have neither the responsibilitynor the autonomy of fiscal powers for delivering theurban services expected from them. There is a mis-match between ULB revenue capacities and theirfinancial requirement.

11.128 The Ministries of Urban Development andHousing and Urban Poverty Alleviation have estimateda huge resource gap of Rs 76896 crore for all Statesduring the period 2005–10 for O&M of variouscivic services in urban areas (Twelfth FinanceCommission, TFC report). To fill this huge gap, ourstrategy revolves around stricter guidelines, policyprescriptions, and stress on local revenue enhance-ment efforts by the ULBs. It will certainly achievefinancial viability at the ULB level. Further, ULBs needto take steps for broad-basing the revenue from ownsources through improving the collection of existingrevenue sources, reforms in property tax, levy of newtaxes and charges, enhanced cost recovery for utilitycharges and fees, improved information, registration,billing and collection systems of taxes and charges,reducing administrative expenses, etc. Innovativemethods of service delivery and involvement ofprivate sector will improve the financial position ofmunicipalities.

EVOLVE ALTERNATIVE WAYS TO AUGMENTMUNICIPAL RESOURCES11.129 The following steps need to be initiated foraugmenting revenue generation by the ULBs:

Land as a Resource• Land is a good resource to generate revenue for the

local bodies and should be explored by the ULBs tothe extent possible.


New Levies• New levies/cess should be levied to augment rev-

enue resources such as drainage fee, parking fee,hoarding fees, vacant land tax, development impactfee, etc.

Pooled Financing• New thrusts for mobilizing urban infrastructure

finance, a State-level Pooled Financing Mechanismis working successfully in Tamil Nadu, with thefinancial assistance from the United States Agencyfor International Development (USAID). The Cen-tral Government has set up a PFDF with the objec-tive to facilitate development of bankable urbaninfrastructure projects through appropriate capac-ity building measures and financial structuring. Anamount of Rs 100 crore has been provided to theMinistry of Urban Development for 2007–08 forPFDF.

Secondary Markets• The ULBs will have to be made credible and ac-

countable institutions so as to tap India’s increas-ingly sophisticated financial markets includingsecondary markets.

Accessing Capital Markets• To ensure sound local government credit markets,

the government will have to evolve effective finan-cial institutions and instruments for financial mar-ket regulations and supervision. The ULBs’ credit

worthiness would be enhanced on a stand-alonebasis so that the supply of bankable projects couldbe increased.

ROLE OF FINANCIAL INTERMEDIATION FOR LOCALGOVERNMENTS

Municipal Development Funds11.130 Around the world, more than 60 countries haveestablished financial intermediaries. For example, inBrazil, individual States often have established theirown municipal development funds. Both the WorldBank and the ADB have announced that they intendto rely more heavily on municipal development fundsas a key part of their strategy to help finance local in-vestment needs in Asia. The goal is not merely to givemunicipalities access to credit, but to do so in a man-ner that increases the efficiency of local investment andreinforce financial sector reforms in the rest of theeconomy.

Municipal Bond Markets11.131 The advantages of using municipal bonds tofinance urban infrastructure are increasingly evidentin India. The Indian Bond Market is becoming vibrant.Ahmedabad Municipal Corporation issued a first his-torical Municipal Bond in Asia to raise Rs 100 crorefrom the capital market for part financing a watersupply project. An illustrative list of ULBs/parastatals,which have been granted permission to issue Munici-pal Bonds, is given Table 11.8.

TABLE 11.8Urban Local Bodies/Parastatals which have been Granted Permission for Issue of Tax-Free Bonds

S. No. Name Year Amount (Rs in Crore)

01. Ahmedabad Municipal Corporation 2001 100.00

02. Hyderabad Municipal Corporation 2002 82.50

03. Nasik Municipal Corporation 2003 50.00

04. Visakhapatnam Municipal Corporation 2003 50.00

05. Hyderabad Metropolitan Water Supply and Sewerage Board 2003 50.00


07. Chennai Metropolitan Water Supply and Sewerage Board 2004 42.00

08. Karnataka Water and Sanitation Pooled Fund Trust 2004 100.00

09. Chennai Metropolitan Water Supply and Sewerage Board 2005 50.00

10. Chennai Corporation 2005 44.80




BUDGETARY SUPPORT11.132 The TFC has recommended a sum of Rs 5000crore for the municipalities to be provided as grants-in-aid to augment the consolidated fund of the Statesfor the years 2005–10 to be distributed with inter seshares.

COST EFFICIENCY AND PRODUCTIVE USE OFRESOURCES11.133 Projects being carried out by contractors haveto be carefully supervised to ensure quality and timelycompletion. Cost over-runs in projects due to delaycaused by contractors need to be penalized by incor-porating the penalty clause in the contract itself.

THRUST OF THE ELEVENTH FIVE YEAR PLANTOWARDS MUNICIPAL FINANCES11.134 India’s urban areas will need to compete na-tionally and internationally for investments and hu-man resources. Most of the ULBs are technically andfinancially ill-equipped to meet the ever-growingdemand for urban services, so the capacity buildingexercises have to be accorded priority. The EleventhPlan strategy would be to create a conducive environ-ment for efficient tax administration, increasing useof non-tax sources, efficient pricing of services, PPPsin provision and maintenance of urban services, adopt-ing alternative sources of finance including accessto capital markets, involvement of community andprivate sector in raising revenue. The States need toensure rating of municipalities for facilitating accessto capital markets.

URBAN TRANSPORT

URBANIZATION TRENDS AND TRAVEL NEEDS11.135 Urbanization has lead to corresponding in-crease in demand for transportation. The growth intransport infrastructure has not kept pace with theincreased demand and the share of public transportvehicles has declined. The problem of congestionand its consequences are posing a severe threat tosustainability of the urban areas. Confederation ofIndian Industry (CII) survey 2003 of the urban popu-lation in southern India showed that 58% of thoseinterviewed were dissatisfied with public transportservices. It also showed that 65% were willing topay higher public transport fares for comfortable

travel. The situation in other parts of the country issimilar.

11.136 Managing urban expansion is a critical elementtowards achieving the goals set by the National UrbanTransport Policy. The National Urban Transport Policy,2006 focuses on the need to ‘Move people—Notvehicles’, by encouraging public transport and use ofnon-motorized modes. The policy suggests involve-ment of private sector, innovative financing mecha-nisms to enhance efficiency, reduction in traveldemand by encouraging a better integration of anduse and transport planning.

11.137 As per 2001 Census, there are 35 cities withmillion plus population. Except for Mumbai, Kolkata,and Delhi, none of the mega cities have a Mass RapidTransit System (MRTS). The Delhi Metro Project isprogressing as per schedule and Phase-I is fully opera-tional. Other metropolitan cities are also in the pro-cess of preparing DPRs for a metro-rail system.

SUGGESTIONS FOR URBAN TRANSPORT PLANNINGFOR THE ELEVENTH PLAN PERIOD• All cities need to prepare a comprehensive mobil-

ity plan which includes a Master Plan for non-motorized transport taking into account projectedgrowth in the next ten years.

• Proposals for preparation of DPR should be pre-ceded by professional evaluation by technologyneutral agencies.

• A comprehensive program of capacity buildingshould be implemented.

• All cities should formulate a realistic ‘hawker/vendor policy’.

• Cities may prepare a plan for traffic calming toreduce emissions and road accident rates.

• All million plus cities may prepare plans to intro-duce/upgrade existing bus services as also introduceBRT systems on selected arterials during the EleventhPlan period.

• All cities may have a parking policy. State govern-ments need to amend building by-laws so that ade-quate parking space is made available for allresidents/users. FAR norms may be modified. Multi-level parking complexes may be made mandatory inmega cities. All cities may upgrade taxi and three-wheeler fleets.


SPECIFIC INTERVENTIONS REQUIRED FORENHANCING MOBILITY NEEDS IN TOWNS• Improvement in the quality and maintenance of

roads and provision of pedestrian pavements andcycle tracks.

• De-congestion of crowded areas.• Developing transport corridors to enable orderly

flow of public transport.• Creation of parking spaces for para-transit and

other vehicles.• Facilities for public bus services, pedestrian subways,

and larger parking facilities.• Mobility needs of 40 lakh plus population cities

would generally need mass transit systems withmedium to high capacity with a larger network offeeder systems.

ACTIONS REQUIRED FOR THE DEVELOPMENT OFINTEGRATED CITY TRANSPORT AS PER NUTP

Land-use interventions• Encourage ‘Transit Oriented Development’ with

high density areas.• Either develop all new/satellite townships/SEZ along

the defined major transport corridors or integratethem with mass transit system in the Master Planitself.

• Allow land use changes from time to time, includ-ing for public/government use.

• Discourage sprawl through introduction of vacantland tax and levy of ‘Transport Impact Fee’ ondevelopments in the periphery.

Transportation Interventions• Promote non-motorized vehicles by creating facili-

ties for safe use.• Promote public transit systems that are cost effec-

tive and able to meet the demand levels optimally.Encourage investments in premium bus systems.

• Develop ring roads and city bypass roads as well asrail line bypasses.

• Develop freight transport terminals outside citylimits.

• Shift inter-state bus terminals from the city centreto the peripheries.

Institutional/Regulatory Interventions• Modify the enabling legislations.• Establish fare policies and a fare regulator.• Implement fiscal measures that encourage use of

public transport.

SCHEME FOR PREPARATION OF DPRS ANDCONDUCT OF TRAFFIC AND TRANSPORTATIONSTUDIES11.138 Under this scheme, support is provided by thegovernment for the preparation of DPRs and in theconduct of comprehensive traffic and transportationstudies to the extent of 40% of the cost. Althoughthe scheme has resulted in many such studies beingcarried out, yet these have not subsequently translatedinto a meaningful set of projects. Table 11.9 belowshows that the outlays and expenditure under thescheme have not been satisfactory during the Ninthand Tenth Plan periods. In line with the NationalUrban Transport Policy, the scheme is being revisedto raise the GoI grant.

11.139 A Task Force has been set up to suggest insti-tutional mechanism for better coordination in policyformulation, planning, and regulation of traffic andtransportation project in all million plus cities.

INTEGRATION OF LAND USE ANDTRANSPORT PLANNING11.140 Corridor development may be encouragedfor inter-city movement of goods and serviceswhile deliberate attempt may be made to discourage

TABLE 11.9Outlay and Expenditure

(Rs in Crore)

Item Ninth Plan Tenth Plan

Outlay Expenditure Outlay ExpenditureUrban transport planning 24.76 3.33 91.00 12.59



ribbon development, multi-modal corridors, andSEZs in close proximity to city areas need to be devel-oped.

PEDESTRIANIZATION AND NON-MOTORIZEDTRANSPORT (NMT)11.141 Special consideration needs to be given todesigning pedestrian and cyclist facilities along theroad and at intersections and the needs of the physi-cally challenged persons need to be taken care of. Theentire road network including footpaths, road cross-ings, service roads, carriageways, medians, bus stops,terminals, mass transit stations, parking facilities,etc. may be considered as per disabled-friendly designprinciples.

INTEGRATION OF TRANSPORT SYSTEM11.142 The benefits of common ticketing to the op-erators are reduced transactions and lower recurringcosts. Despite these advantages, the system of commonticketing has not picked up in India. A necessary con-dition for common ticketing across operators is thecreation of a mechanism that allows a fair share of therevenues earned from such common tickets. If there isonly a single service provider, sharing of revenue willnot be a problem while with multiple providers this isa complex task. Indore model of public transport couldbe replicated in other cities.

Appropriate/Cleaner Technologies forPublic Transport11.143 Vehicular emission is directly related to the fuelused, the technology employed, and the driving tech-

nique. Improvement in fuel quality can be achievedthrough removal/reduction of emission relatedconstituents in the fuels such as sulphur in diesel andsulphur, lead, benzene, and other aromatics in petrol.Further reduction of emissions can be obtainedthrough improved engine technology and exhausttreatment systems. Vehicles manufactured before FirstMass Emission Norms introduced in 1991 would re-quire to be replaced.

ROLE OF INTELLIGENT TRANSPORT SYSTEMS11.144 ITS encompasses a broad range of wireless andwire line communications-based information andelectronics technologies. When integrated into thetransportation system’s infrastructure, these technolo-gies relieve congestion, improve safety, and enhanceproductivity. Applied effectively, ITS and Servicescan save lives, time, and money as well as reduce threatsto our environment and create new business oppor-tunities.

11.145 A large investment of Rs 38000 crore hasbeen identified for the introduction of modern busesin the country during the Eleventh Plan. The govern-ment aims to replace all the existing urban buseswith ‘truck chassis body’ with low floor/semi lowfloor ultra modern buses on PPP basis. Table 11.10provides the financial requirement during the Elev-enth Plan.

11.146 The financial requirement to cater to the grow-ing demand in the Eleventh Plan would be Rs 132590crore as summarized in Table 11.11.

Box 11.14Best Practices in Public Transport

1. Indore ModelIndore city in Madhya Pradesh has evolved a PPP model for operation of city bus services. In this model, the investmenton the rolling stock is planned through private participation. The source of revenue for the private operator is from farecollection and from advertisements.

2. Revival of public transport in BangaloreBangalore Metropolitan Transport Corporation (BMTC) was created in 1997 by separating Bangalore depots of thetroubled Karnataka Road Transport Corporation from the mother company. It carried out a thorough internal restruc-turing, introduced cost and service monitoring, and sub-contracted some services to private operators on a gross-costbased scheme. In the span of two to three years, BMTC improved its services and fleet/staff productivity, and becameprofit making.


TABLE 11.11Sources of Funding

Source Funding (in Rs crore)

*JNNURM (GoI) including UIDSSMT 15500

*Non-JNNURM (Budgetary Support) 4400

VGF 6000

Resourced from States/ULBs 19500

Loan from financial institutions 61190

Participation by private promoters 26000

Total 132590

Note: * The actual allocation provided for JNNURM is Rs 50000crore during 2005–12 out of which the amount available forurban transport is expected to be in the range of Rs 10000 crore.As regards non-JNNURM, budgetary support is Rs 3055 crore.The shortfall will need to be met by other sources of finance.


TABLE 11.12Slum Population—Census 2001

Slum population 1991 46.26 million(TCPO estimates)

Slum population 2001 61.82 million(TCPO estimates)

No. of towns reporting slums in 640#

Census 2001

Reported slum population in 42.58 million640 towns, 2001

Population of towns/cities reporting 184.35 millionslums, 2001

Share of slum population to population 23.1%of towns/cities reporting slums, 2001

Note: # Towns with population of 50000 or more.

TABLE 11.13Population, Housing and Basic Amenities

Total population of India, 2001 1028.6 millionUrban population, 2001 286.1 million% share urban, 2001 27.8%Total urban housing stock, 2001 52.0 million

Pucca houses 79.16%Semi-pucca houses 15.58%Kutcha houses 5.27%

Household with Tenure Status, Urban, 2001

Owned 66.8%Rented 28.5%Others 4.7%

Households having Access to, Urban, 2001

Safe drinking water 90.01%Electricity 87.59%Toilet 73.72%Drainage 77.86%Kitchen within the house 75.96%LPG for cooking 47.96%Electricity for cooking 0.31%Biogas for cooking 0.37%

Source: MoHUPA, GoI.

TABLE 11.10Funds Requirement

Cities (Population in Lakh) Total No. % of Towns Proposed Average Rs in Croreof Towns for Eleventh Plan Requirement

1–5 370 50 40 74005–10 39 50 400 780010–40 28 100 930 26040> 40 7 100 3000 21000MRTS 8 100 32000Modern buses 38000

Capacity building and transport planning 350

Total 132590


11.147 The total outlay for the Eleventh Plan forMinistry of Urban Development is Rs 24600 croreat 2006–07 price (Rs 26041 crore at current price)which includes Rs 11001 crore of GBS at 2006–07 price(Rs 12443 crore at current price). Likewise, the totaloutlay for the Eleventh Plan for Ministry of Housingand Urban Poverty Alleviation is Rs 43480 crore at2006–07 price (Rs 50958 crore at current price) whichincludes Rs 3260 crore of GBS at 2006–07 price(Rs 3687 crore at current price).

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