Ministry, Plan panel battle over power to clear projects, JNNURM Phase II stuck

India's most ambitious urban development plan, the Jawaharlal Nehru National Urban Renewal Mission, has run into a wall with the finalisation of its second phase being delayed due to a turf war between the Urban Development Ministry and the Planning Commission.

The two sides are fighting over which government agency will clear the highly lucrative project approvals for cities. The Urban Development Ministry under Kamal Nath wants a say in the process. But Planning Commission Member Arun Maira wants it to be decentralised and left to the cities following the experiences during the implementation of the six-year-long first phase.

While the ministry is responsible for implementing the ambitious programme, funds for the same have to be approved by the Planning Commission.

The tussle has delayed the finalisation of the second phase which was to be completed before March this year. In the first phase, the government had planned to spend about Rs 81,000 crore on the urban renewal plan, of which Rs 42,000 crore was to come from the Centre. The ministry had approved 1,361 projects for the first phase of which 352 have been completed. It fears that this will reduce to a trickle if Maira's proposal goes through.

India is the fastest urbanising country in the world and Indian cities are expected to house 590 million people by 2030 according to a McKinsey Research Institute report of 2010. The report projected that India would need to invest about $1.2 trillion to equip its cities to cope with such a rate of urbanisation.

Nath told The Indian Express that he was confident the plan panel would come around to the ministry's point of view. "We will only approve projects sent by state-level advisory committees, but it has to be done (by us)," he said.

Maira said that the Finance Ministry had advised the Planning Commission that it would be impossible to fund the second phase at the same level as in the first phase, with Urban Development Ministry figures showing that only two-thirds of the amount committed has been spent so far. Following this feedback, it had been decided that JNNURM would provide limited funds to cities over the next five years. Instead, it will invest in improving the urban management capacity of cities and towns. "Local urban planning needs to develop the ability to spend the money well," Maira told The Indian Express.

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