More reports on: Government policies

Urban planning decentralised; states, local bodies get greater say

25 June 2015

The guidelines announced by Prime Minister Narendra Modi at the launch of the three new urban missions 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.

The central government has virtually ended the earlier practice of appraising and sanctioning individual projects, thereby 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 those falling under Atal Mission for Rejuvenation and Urban Transformation (AMRUT) are to be based on an objective and equitable criteria giving equal weightage to urban population and the number of statutory cities in each state / UT.

The housing mission will be implemented in all the 4,041 statutory cities / towns.

For smart city development, each selected city will be provided central assistance of Rs100 crore 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 in urban areas, it will be based on the number of urban poor and slum dwellers.

States and UTs will 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.

Under the new guidelines, consultations with urban citizens have been made mandatory in order 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 will be the main resource of resource mobilisation.

It also provides for involvement of members of Parliament and state assemblies in formulation and monitoring of projects.

In order to ensure better execution of the AMRUT scheme, no projects without availability of land and all necessary clearences will be included in the mission by states / UTs.

States will transfer funds to urban local bodies within 7 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 / urban local bodies 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-per cent 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, the centre's share will be between one-third and 50 per cent the project cost. States will have to mobilise the remaining with their own share, which should not be less than 20 per cent.

A set of 11 reforms will be implemented in four years, which include promoting e-governance, improving collection of various taxes, fees 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 of 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 benefit

For this, the minimum area norm for retrofitting is 500 acres, for redevelopment it is 50 acres and for green field projects it is 250 acres.

This will be 50 per cent for North-Eastern and Himalayan states.

Benchmarks to be achieved include 10 per cent of energy needs to be met from renewable sources, 80 per cent of building construction to be green and 35 per cent of housing in green field projects to be for economically weaker sections.

For implementation of smart city plans, special purpose vehicles have to be set up with 50:50 equity participation by states and urban local bodies.

An inter-departmental task force will be set up to coordinate all aspects of smart city development.

Pradhan Mantri Awas Yojana (Urban)
Under the scheme, which is women centric, ownership of houses will be in the name of woman head of the family of or jointly with the husband.

Houses of 30 sq mt carpet area to be built for economically weaker sections. In case of non-availability, states can relax the norms with the consent of beneficiaries. States also can enhance the area while meeting the additional expenditure.

Central grant of Rs1 lakh on an average per house to be provided can be used by states for any slum redevelopment project in the state to make them viable.

Interest support at the rate of 6.50 per cent to be paid soon after sanction of loan to the beneficiary so as to bring down the EMI .

Beneficiaries can submit self-certificate / affidavit as proof of income.
Under affordable housing in partnership with private sector, 35 per cent of houses will be for economically weaker sections and the minimum project size will 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 will be chosen through open tendering and it is developers' responsibility to provide transit accommodation during construction period. Private developers will be given only the amount of land required for commercial viability of the project.

The missions would be implemented as centrally sponsored schemes except affordable housing, with a credit-linked subsidy component. Share of states/UTs vary from one to the other.

Under AMRUT, share of states will not be less than 20 per cent and under smart cities mission, the share of states / urban local bodies will be equivalent to the central assistance and the rest to be mobilised by the states / union territories and ULBs.

Under PMAY, it has been left to the states / UTs that would be required to mobilise the balance after centre's share.

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