At A time when the contours of the new scheme for 100 smart cities are being decided, it is important to look at what went wrong with the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), launched in 2005 to improve infrastructure and governance in cities. With an overall investment of more than Rs 1 lakh crore, it covered both small towns and big cities. Amid all the criticism of the scheme, it is imperative to look at what went right and what didn’t.
One of the major drawbacks of the JNNURM was that it focused too much on big cities, directing fewer funds towards small and medium ones. In principle, it was meant to include all cities/ towns as per the 2001 Census. One of the things it did right was provide funds for class V and VI towns, which have populations of less than 10,000 people. Though their share in resources was dismal, it started a process that could have been taken forward in the future.
Another criticism was that access to JNNURM funds was linked to the achievement of mandatory reforms. Many feel this kind of incentivising did not work because a number of states and cities refused to comply. The Centre had no choice but to release funds after being given assurances on paper. However, many states did comply. As of January 2014, states like Himachal Pradesh, Kerala and Tamil Nadu had completed 19 out of the 23 reforms. Others like J&K, Chhattisgarh and West Bengal had completed 16. Bigger cities like Delhi did not perform as well and managed to complete only 15 reforms but still received the highest funding under the JNNURM.
The constant dependence of urban local bodies (ULBs) on state or parastatal agencies was another criticism. The JNNURM was supposed to encourage the role of ULBs in project preparation and implementation. However, in practice, the role of the ULB was reduced to that of quiet spectator in some cases and appointing agency in others. The funding pattern did encourage cost-sharing between the Centre, state and ULBs. However, in some cases, smaller towns were unable to contribute their share of the project cost.
Underutilisation of funds was another issue. Since the smaller ULBs are not financially independent, implementing reforms can be difficult, which leads to delays in the release of funds. Also, since a number of smaller ULBs lack capacity, the funds, even when released, were not enough to realise their potential or utilised optimally. This leads to a vicious cycle of poor performance stemming from poor capacity and lack of funds.