The Hindu : Karnataka / Bangalore News : ‘Local bodies not able to raise funds’

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Saturday, Oct 27, 2007
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Karnataka

Karnataka - Bangalore

‘Local bodies not able to raise funds’

Staff Reporter

— Photo: K. Gopinathan

MISSION MODE: P. K. Mohanty, Joint Secretary, JNNURM, Ministry of Housing and Urban Poverty Alleviation, addressing a seminar in Bangalore on Friday.

BANGALORE: The Union Government is finding it hard to disburse the money allocated for cities selected under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), P.K. Mohanty, Joint Secretary, Ministry of Housing and Urban Poverty Alleviation, said here on Friday.

“We are struggling to find projects to sanction as the local bodies are not able to raise the matching funds. We have Rs. 2,000 crore allotted for JNNURM but we have been able to sanction projects worth Rs. 500 crore only,” he said at a national seminar on JNNURM organised by the Civic Bangalore and Indian Habitat Forum.

In the two years that the mission has been in place, the Union Government has sanctioned projects amounting to Rs. 40,000 crore, Mr. Mohanty said.

The States have been asked to advance their timelines and fulfil their reform conditions as soon as possible. “Most of the States have said that they would complete the reform process by the sixth or seventh year,” he said.

JNNURM is a Centrally-driven initiative where 63 cities have been selected to receive funds to develop infrastructure and provide basic services to the urban poor in these cities. While the Union Government provides 35 per cent and the State Governments 15 per cent of the project cost, municipal corporations have to raise as much as 50 per cent.

A major criticism faced by the mission is the burden it places on local bodies to raise crores of rupees as matching grants pushing them into debt. Non-government organisations complain that communities and elected representatives have been kept out of the planning process. At the open discussion that followed Mr. Mohanty’s speech, the audience raised questions about the reforms that have to be compulsorily fulfilled for States to receive the Central grants. Some of the controversial reforms include repealing the Land Ceiling Act, allowing change of land use and reducing stamp duty to 5 per cent.

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