Financial Express 11.02.2010

Urban development min seeks 100% hike in

Budget outlay

New Delhi: The urban development ministry has sought Rs 10,000 crore from the finance ministry as Budget allocation for the financial year 2010-11. The ministry received Rs 5,500 during the current year. The increase in the sum of money is attributed to the large number of ongoing Metro projects.

The ministry intends to spend Rs 5,000 crore on Metro connections, Rs 1,000 crore on government accommodation, Rs 250 crore on satellite towns, Rs 300 crore on the national capital region and Rs 36 crore on the North-Eastern region urban development project.

The ministry expects an allocation of Rs 9,600 crore for 2010-11, for its flagship city development programme, Jawaharlal Nehru National Urban Renewal Mission (JNNURM). This will be delivered as additional central assistance (ACA), to be budgeted as expenditure for the finance ministry.

Currently, 478 projects, worth around Rs 52,053.35 crore, are sanctioned under urban infrastructure and governance (UIG), the main component of JNNURM.

The funding required for the Metro will be needed as the Centre’s share of equity sharing for construction, as well as for rolling stocks. This financing is expected to come as external funding from agencies like the World Bank and Japan international co-operation agency (JICA).

Meanwhile, the ministry is following up on a World Bank loan of $1 billion (Rs 5,000 crore), which it is likely to receive by December this year. This fund will be added to the overall kitty of JNNURM funds to be used for various projects across mission cities. The modalities of the projects are still being worked out.

The projects which will be sanctioned with new funds will take a whole-city approach—revamping the infrastructure—and cities which have conformed to the reforms will get priority in receiving funds. The ministry is also in talks with the World Bank for a funding of $40 million. This sum will be used for capacity building, training, DPR preparation and appraisal at the urban local body level.

Under the JNNURM, the Centre gives grants covering 50% of the project cost for cities with a population between one million and four million. For cities with a population higher than four million, the grant from the Centre is 35% of the project cost. The remaining sum comes from the state’s kitty and the urban local bodies or para-statals.

However, for North-Eastern states, the Centre provides 90% of the project cost as grants, while for Jammu & Kashmir it contributes 80% of the project cost.

The sanctioned funds have been invested in various projects in areas such as water supply, sewe-rage, drainage, public transport system and building of roads and flyovers.