New Delhi: The government will allocate an additional Rs. 15,000 crore for new urban development projects over the next 15 months.
The second phase of the government’s flagship urban renewal mission will begin in March 2014 and the money now allocated will be spent on development projects till then, an official said, requesting anonymity.
“The allocation of this additional money to the urban development ministry was decided last week and it will be spent only for new urban development projects and not on those which are pending from phase I,” the official said.
The first phase of the urban renewal mission ended in March 2012 and this is the so-called transitional phase till the new one begins in 2014.
“The government has already committed funds to the tune of Rs.16,000-17,000 crore for ongoing projects under the first phase of Jawaharlal Nehru National Urban Renewal Mission,” the official said.
The projects will be sanctioned after making sure that they comply with the guidelines designed for the first phase. “The only big difference is that while the first phase focused on the 65 cities, states can now spend the allocation in any of their urban areas,” the official said.
An urban development ministry official said the details of how this money will be spent are still being worked out. “The proposal is being considered by an inter-ministerial group and cabinet approval for the same is still awaited,” the official said. He too declined to be named.
The urban development sector needs as much money as possible, according to M. Ramachandran, former secretary at the urban development ministry. “A high powered committee has said the urban development sector needs investment to the tune of Rs.39 trillion in the next 10-20 years,’ he said. “The immediate priority will be to approve projects and get them implemented.”
Demands for infrastructure in the country were enormous and this amount was insignificant compared with the actual demand, according to Ramesh Ramanathan, co-founder of Janaagraha, a non-profit organisation based in Bangalore that works on urban issues. “This money is important to keep the pipeline going and it is important that it leads to reforms in the urban development sector.”
There will be objective criteria while sanctioning projects so that the money is distributed equitably between different cities, according to the first official cited in the report. “We expect that smaller and medium sized cities will get more attention.”
The only question is whether the urban local bodies of smaller cities and towns actually have the capacity to implement those projects, said Ramachandran. “We should start building the capacities of those cities and towns immediately,” he said.
An additional budget of Rs.1,000 crore has been allocated for capacity building, the first official said. “This budget of Rs.1,000 crore is ring-fenced, which means that it cannot be used for any other purpose.”