Urban renewal mission a failure: CAG

December 01, 2012 12:00 am | Updated 05:03 am IST - NEW DELHI:

‘All the way from basic guidelines to implementation and monitoring of projects’

From basic guidelines to implementation and subsequent monitoring of projects, the Union Ministry of Urban Development’s flagship programme — the Jawaharlal National Urban Renewal Mission — has failed on all counts, says the Comptroller and Auditor General in its latest report.

Tabled in Parliament on Thursday, the performance audit of the Mission shows huge deficiencies. For instance, only 22 of the 1,517 projects approved in 2005 and 231 of 1,298 approved in 2011 were completed as of March 31, 2011, the CAG report said.

The urban renewal mission was launched in 2005 with the objective of reforms-driven fast track development of cities.

The CAG noted that the Mission had failed to strengthen urban local bodies, even though it was supposed to make them more accountable and efficient.

“Other than execution of housing and urban infrastructure, it was also intended to strengthen the urban local bodies (ULBs) in terms of their structure, composition, financial resources, functions and powers.… However in the selected States/UTs, we observed that all the mandatory and optional reforms were not implemented as per the commitments made in the Memorandum of Agreement. Thus the objective of bringing about reforms in institutional, financial and structural governance structure of the ULBs to make them efficient, accountable and transparent could not be achieved as has been envisaged,” the CAG noted.

It stated that the ministries of the Central Government were not equipped to monitor a project of JNNURM's magnitude.

“The JNNURM guidelines had been deficient as they did not give adequate advisory to States regarding the parking of funds and the utilisation of interest thereof. There was no uniformity in utilising interest earned on parked funds amongst the States/Union Territories and the revolving fund had also not been created in almost all the States,” the report says.

There were delays in release of funds to States and the guidelines did not contain any directions to stipulate the time in which such releases should be made, it adds. The flow of funds showed that there was a rush of expenditure in the last quarter of the financial year and particularly in the month of March.

The Government allocated only Rs.37,070.15 crore of the Rs.66,084.66 crore sanctioned by the Planning Commission. Of this, Rs.32,934.59 crore had been released by March 31, 2011.

The audit’s findings indicated the risk of ineligible beneficiaries of the schemes meant for the urban poor. The CAG also ticked off the authorities for allowing diversion of funds for projects not admissible under JNNURM. For instance, at Kathua in Jammu & Kashmir about Rs.2.21 crore was distributed to unverified beneficiaries for housing construction.

Under the Urban Infrastructure & Governance scheme, not even a single project has been completed in Uttar Pradesh’s seven mission cities. In Delhi, only four of 28 have been completed, in Gujarat 33 of 71 and in Karnataka 16 of 46.

The CAG recommended that the government consider suitable incentives to states that have implemented the reforms envisaged under JNNURM guidelines. The Ministry of Urban Development and the Ministry of Housing and Urban Poverty Alleviation should introduce a zero-tolerance policy at all levels with respect to irregular expenditure and diversion of funds.

It also recommended identifying the deficiencies in the monitoring of the scheme, at both Central and State levels, and to address these within the next two years.

Only 22 of 1,517 projects approved in 2005; 231 of 1,298 in 2011 were completed as of March 2011

Mission was launched in 2005 with objective of reforms-driven fast track development of cities

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