New Delhi: India’s apex planning body is considering increasing allocations for the north eastern states under a Centre-sponsored urban infrastructure development schemeafter the ministry administering the scheme said cities in these states needed more money than had been allocated to them.

The urban development ministry, which administers the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), has also requested the Planning Commission to increase allocation for 5,098 small towns across India.

JNNURM was launched in December 2005 with an outlay of Rs50,000 crore (over a seven-year period). Of this amount, approximately Rs24,000 crore has been earmarked for 63 large cities and Rs7,000 crore for 5,098 towns that have been termed urban areas. Around Rs18,000 crore has been allocated towards providing basic utilities for the urban poor.

Urban development secretary M. Ramachandran said because the allocations were based on state population, the north-eastern states get a disproportionately smaller share from the corpus.

For instance, allocations to Manipur, Meghalaya and Nagaland together work out to Rs194 crore. Hence to bridge the funding gap for these states, the ministry is also negotiating a $250 million loan from the Asian Development Bank, Ramachandran had said in a previous interview.

Analysts say these states need more to improve the quality of their urban infrastructure.

“The need is basically (for) improving cities. When you go to really small cities, their population may be small in Indian terms, but you still need a road system, a water treatment plant or a sewage plant. For small cities, you definitely want to look beyond per capita norms and look at the aggregate need of the city," said S.R. Ramanujam, director, urban practice, Crisil Risk and Infrastructure Solutions Ltd.

While declining to comment on how much more the government will allocate to the north-eastern states, Anwarul Hoda, member, Planning Commission, said: “Reallocations can be made because the requirements are not so large."

The panel is also “taking a view" on more allocations for smaller towns, added Hoda. “It is a difficult task. There are over 5,000 such towns and even if Rs1 crore is given per town total, allocations become Rs5,000 crore. And with the given focus on social sector, it is difficult to generate that kind of money for urban infrastructure, though I feel these towns need more allocation," he said.

“We have been constantly pleading with the Planning Commission that the allocation should be increased so that more small towns can be covered," Ramachandran said.

The ministry has so far implemented projects in 300 small towns, says Ramachandran, and an increase in allocation would help the ministry extend grants to as many as 1,000 towns. The current year’s allotment for small towns is Rs700 crore and a hike in allocation is a long-pending demand of the ministry.

In October, Prime Minister Manmohan Singh, addressing the national conference on JNNURM, had asked the Plan panel “to look into thefeasibility of providing additional assistance to small and medium towns."

Sangeeta Singh contributed to this story.