The UIG scheme links fund release to projects proposed by the 63 cities to milestone reforms to be undertaken by urban local bodies and states in a host of areas such as stamp duty, property registration, building bye-laws, e-governance, community participation and public disclosure laws, and public-private partnership.

At a review meeting held recently, the urban development ministry has admitted that the progress on implementation of projects as well as utilisation of funds was slow. Further, it notes that states’ progress on the reform front is just short of being dismal. For instance, while 15 states were required to earmark 20-25 per cent of all housing projects, including those by private players, towards economically weaker sections, only three states have managed to implement it. Even Andhra Pradesh, which ranks in the top three in terms of number and value of projects, has not met its commitments. And half the 12 states supposed to make changes to the Rent Control Act for periodic revision of rents, have not stuck to their promise.

The Rs 50,000 crore committed under JnNURM, which has three components including the UIG scheme, is to be spent over seven years starting 2005-06. The second component of the mission is the Urban Infrastructure Development Scheme for Small and Medium Towns for which the Centre has committed Rs 6,400 crore. Here, the record is not too bad, with the Centre releasing almost Rs 2,540 crore till March 31, 2008. The last component of the mission is a scheme for basic urban services and housing where the Centre will contribute Rs 18,000 crore.

Interestingly, of the 26 states that are participating in the mission, just six — Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu and West Bengal — account for three-fourths of the 324 approved projects, both in terms of number and value. Maharashtra tops the list with 56 projects worth Rs 7,732.45 crore, followed by Andhra Pradesh with 36 projects worth Rs 3,770.12 crore and Gujarat (55 projects, Rs 3,667.18 crore).

Analysing the spread of the JnNURM, officials in the urban development ministry have realised that states were devoting much of their resources towards the 63 short-listed cities. This blocked their fund flows for smaller towns and cities, resulting in political pressure that states were giving smaller cities a short shrift in favour of metros and larger cities. They said, this problem may be addressed in the coming years.