States and UTs to form, approve and execute projects under new urban missions

BW Online Bureau Jun 25, 2015

NEW DELHI, June 25: Based on the learnings of implementation of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) that ended up in sub-optimal physical and financial performance, the Central Government has radically overhauled the Operational Guidelines for implementation of Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All Mission in Urban Areas. The Guidelines released by Prime Minister Narendra Modi at the launch of the three new urban missions here today allow the States and Union Territories full liberty and flexibility in formulation, approval and execution of projects under the three missions. The two urban ministries have sought to ensure timely sanction and execution and certainty of resources for various projects and participation of citizens in identifying development needs under the new urban schemes. Central Government has virtually withdrawn from the earlier practice of appraising and sanctioning individual projects, there by ending the scope for subjectivity and discretion. The major new provisions incorporated in the Guidelines and common to all the three urban missions include:

Objective criteria for selection of cities and allocation of funds:

Potential Smart Cities and AMRUT cities are to be based on an objective and equitable criteria giving equal weightage to urban population and number of statutory cities in each State/UT; Housing Mission to be implemented in all the 4,041 statutory cities/towns.

For smart city development, each selected city will be provided a central assistance of Rs. 100 cr per year. Under AMRUT, allocation of funds will be as per urban population and number of cities/towns in each State/UT. Under Pradhan Mantri Awas Yojana (PMAY) in urban areas, it will be based on the number of urban poor and slum dwellers.

States/UTs to appraise and approve individual projects unlike in the past when urban ministries used to do so.
To avoid delays and non-completion of projects on account of lack of resources, States/UTs will now be required to firmly indicate resource tie ups under state level action plans.
To enhance urban governance, clear action plans for timely implementation of identified reforms need to be indicated.
Consultations with urban citizens made mandatory to ensure need based and bottom up planning of projects.
State level action plans to clearly indicate convergence with other central and state government schemes as appropriate for resource maximisation.
PPP model shall be the main resource of resource mobilisation.
Involvement of Members of Parliament and State Assemblies in formulation and monitoring of projects provided for.

Mission-wise Guidelines seeking better execution of projects are as below: AMRUT

No projects without availability of land and all necessary clearences shall be included in the Mission by States/UTs.
States shall transfer funds to urban local bodies within seven days of transfer by central government and no diversion of funds to be made failing which penal interest would be charged besides taking other adverse action by the centre.
Action plans should provide for O&M costs for assets created for at least five years based on user charges.
Instead of penalising States/ULBs for non-implementation of reforms by linking fund release with progress on reforms resulting in delays, the Guidelines now provide for incentivising reforms by earmarking 10 percent of annual allocation to be allocated to good performers at the end of each year.
For water supply, sewerage, septage, storm water drains and urban transport, centre’s share to be in the range of 1/3 of project cost to 50 percent. States to mobilise the balance with its own share being not less than 20 percent.
A set of 11 Reforms to be implemented in four years including :promoting e-governance, improving collection of various taxes, fee and user charges, augmenting double entry accounting, constitution and professionalisation of municipal cadre, preparation of GIS based master plans, devolution of funds and functionaries to urban local bodies, review of building by-laws, setting up financial intermediaries for pooling and disbursement of resources, credit rating of urban local bodies, energy and water audit and achieving Swachh Bharat milestones.

Smart Cities Mission

Central assistance to be used only for infrastructure projects which have larger public benfit
Minimum area norm for retrofitting is 500 acres; for redevelopment-50 acres; for green field projects - 250 acres. This will be 50 percent for North-Eastern and Himalayan states.
Bench marks to be achieved include : 10 percent of energy needs to be met from renewable sources, 80 percent of building construction to be green and 35 percent of housing in green field projects to be for economically weaker sections.
Special Purpose Vehicles to be set up for implementation of smart city plans with 50:50 equity of States and Urban Local Bodies
An Inter-Departmental Task Force to be set up to coordinate all aspects of smart city development

Read more: Smart Cities: Five things I’m wondering about Pradhan Mantri Awas Yojana (Urban - PMAY)

Ownership of houses to be in the name of woman or jointly with husband
Houses of 30 sq.mt carpet area to be built for Economically Weaker Section (EWS) category. In case of non-availability States can relax with the consent of beneficiaries. States also can enhance the area while meeting the additional expenditure.
Central grant of Rs. One lakh on an average per house to be provided by the Central Government can be used by States for any slum redevelopment project in the state to make them viable.
Interest support at 6.50 percent to be paid soon after sanction of loan to the beneficiary so as to bring down EMI.
Beneficiaries can submit Self-certificate/Affidavit as proof of income.
Under Affordable Housing in Partnership with Private and Public Sector, 35 percent of houses shall be for economically weaker sections and the minimum project size shall be above 250 houses.
Central Ministries/Agencies also to take up Slum Redevelopment Projects on their lands without charging for land and will be eligible for central grant.
Under In-situ Slum Redevelopment, Private developers to be chosen through open tendering and it is developers’ responsibility to provide transit accommodation during construction period. Private developers to be given only that much of land required for commercial viability of project.

All the three Missions would be implemented as Centrally Sponsored Schemes except Affordable Housing with Credit Linked Subsidy component. Share of States/UTs vary from one to the other. Under AMRUT, share of States shall not be less than 20 percent and under Smart Cities Mission, share of States/ULBs shall match that of central assistance and the rest to be mobilised by the States/UTs and ULBs. Under PMAY, it has been left to the States/UTs who would be required to mobilise the balance after centre’s share.