‘Tariff’ no longer a dirty word in urban planning

‘Tariff’ no longer a dirty word in urban planning

What happens after JNNURM funds run out?

That seemed to be the question in many participants’ minds at a workshop on municipal finance, organized as part of an India Urban Space, a major conference on urban development that concluded here on Sunday.

JNNURM, or the Jawaharlal Nehru National Urban Renewal Mission, is a Centre-funded scheme that has earmarked Rs50,000 crore for urban infrastructure in 63 cities with population more than 500,000— provided they embark on a mandatory reforms process aimed at making them self-reliant.

With India’s urban areas expected to soak up some Rs1 trillion in investments over the next five years, the conference was touted as a way for cities to showcase their plans and interact with industry experts as well as businesses. The Union urban development ministry estimates that cities will require at least Rs1,26,536 crore in investment.

“The level of participation (at the conference) has been amazing," said Sujatha Srikumar, chief operating officer of Infrastructure Leasing and Financial Services Ltd, an infrastructure financing company. “I saw mayors and elected officials from even states like Uttar Pradesh coming forward and saying we will set tariffs (for utilities such as water). Tariffs and user charges are no longer dirty words."

One of the recurring themes of the conference—and the JNNURM—is operational efficiency for urban local bodies, as municipal and city corporations are called, linked to setting tariffs for utilities such as water,??which??traditionally?ope-rate?out?of?budgetary?resources.

“Fund releases from the Centre should be based on operational efficiency. You can take government funds to implement physical projects. But that is different. The key purpose is that we (cities) become self-reliant in the future," said P.K. Srihari, former additional commissioner of the Bangalore City Corporation, who made a presentation on municipal finance.

“In the late 1990s, Bangalore signed an agreement with the state government where we told them: ‘We don’t have enough funds for infrastructure right now. But in the future, we will set it right’," he added.

Another problem that most Indian cities face is the lack of proper accounting practices.

In an effort to clean up municipal corporations’ books, the Union urban development ministry identified four ratings agencies to conduct credit ratings of the 63 municipalities. The ratings process is expected to be complete by end-October this year, confirmed Union urban development secretary M. Ramachandran.

Organized by Bangalore-based not-for-profit Janaagraha, the conference included a series of workshops on city planning, water supply, sewerage and solid waste management, municipal finance and governance.