Further incentives to states, cities: PM

New Delhi, Oct 9: Prime Minister Manmohan Singh today said the Centre was planning further incentives to states and cities for improving the finances of local bodies and additional assistance for urban areas not covered under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

Dr Singh made the announcement while addressing a national conference on JNNURM.

''We are considering the idea of offering further incentives to States and cities that implement reforms on a faster track,'' he said.

Pointing out that governance reform was the centerpiece of urban renewal, he said such reforms would ensure the long-term sustainability of the investments and greater transparency and accountability in urban planning and development.

Hence the link between investment and reform. This would also be the approach to be adopted in the XIth Five Year Plan, which would further strengthen the JNNURM.

''Our Government stands committed to providing the requisite budgetary support to States and cities,'' the Prime Minister said.

Urging State and Local Governments to advance the timelines for implementation of these reforms, he said this was necessary for meeting the objectives of the Mission within the time specified.

For example, the reforms pertaining to improving Urban Local Body finances could be completed within the first three years of the Mission. This would enable these bodies to become viable and eligible to enlist institutional finance.

Apart from addressing the needs of large Mission cities, there was need to focus on improving basic services in other non-Mission cities and towns.

''Given the level of interest exhibited by small and medium towns, we do now recognize that the financial allocations made for them are not adequate.

''I am asking the Planning Commission to look into the feasibility of providing additional assistance to them.''

The conference was attended by Urban Development Minister Jaipal Reddy and his MoS Selja, leaders of local bodies and State government officials. While urban areas had proved to be engines of economic growth, rapid urbanization had spawned its own set of problems. A large proportion of our urban population was still living in slums in unacceptable conditions.

Urban housing stock, especially housing for the poor, had not kept pace with demand. As much as 30 per cent of urban households lived in single room units. This created social and health problems and affected the education of young children. The demand for civic services had shot up exponentially.

''We need to facilitate and respond to this transformation through effective measures for improvement of city services, proactive creation of infrastructure and improved systems of public governance,'' Dr Singh said.

A total of 63 cities had already developed their ''City Development Plans'' and were in the process of preparing Detailed Project Reports to access funds from JNNURM.

About 60 per cent of the investment was going for improvement of essential services like water supply, sanitation and sewerage. ''We should ensure that those localities that today have minimal services gain the maximum from the new investments proposed.

Another important issue had arisen related to leveraging of JNNURM funds. The sum of Rs. 50,000 crore provided by the Government was hardly adequate for meeting the infrastructure investment needs of JNNURM cities and towns.

States must leverage these funds and raise more from the market.

To do so, we must improve the quality of projects and the fiscal health of Urban Local Bodies.

The private sector can be encouraged to invest in urban development through public-private partnerships.

UNI