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Government of India
Ministry of Finance
03-December-2010 18:52 IST
Urgent Need to Explore Possibilities of PPP for JNNURM to Meet Huge Requirement of Funds: FM
Users of Public Services be ready to Pay for Services; Change of Mind Set Necessary for both users and those Running Institutions of Urban Governance: FM
Union Finance Minister Shri Pranab Mukherjee said that in order to meet the huge requirement of funds and resources for Jawaharlal Nehru National Urban Renewal Mission(JNNURM), there is an urgent need to explore the possibilities of Public Private Partn

Union Finance Minister Shri  Pranab Mukherjee said that in order to meet the huge requirement of funds and resources for Jawaharlal Nehru National Urban Renewal Mission(JNNURM), there is an urgent need to explore the possibilities of Public Private Partnership (PPP) with greater vigor and focus. He said that even though various financial institutions and some local bodies are coming forward to tackle this challenge yet State Governments and cities must provide the enabling environment for the private sector to participate and for PPP to take roots in this sector. He said that the need for facilitation of private sector funds through improved and transparent governance systems cannot be stressed enough. At the same time, the Finance Minister said that users of public services have to be prepared to pay for the services through relevant levies and user charges. The Finance Minister Shri Mukherjee was speaking at a funcion  organized here today to mark the fifth anniversary of the launch of Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

 

Finance Minister Shri  Pranab Mukherjee said that second major challenge as far as JNNURM is concerned is a need to bring about a change in the mind set of those who are running the institutions of urban governance and the users of urban services.  The Minister said that there has to be a commitment, cutting across all stakeholders, to improve urban infrastructure. He said that there has to be an understanding that the Government is not some ephemeral cosmic body, which is a source of endless funds. He said that we have to be ready to pay for the services we wish to avail for ourselves.  The Minister further added that there has to be an appreciation that expenditure has to be prioritized, and paced, as there can never be enough resources to meet all our aspirations. He said that there has to be an understanding that the amounts we invest into urban infrastructure services are to improve our own and our children’s health.

 

Mr Mukherjee said that local Governments have to understand that the short term discipline of belt tightening is a must to pay for long term improvements in services. He said that the commitment to reforms by States and Urban Local Bodies under this Mission are in recognition of this need to change mind-sets. The Minister  said that true proof of change in mind-set will come when citizens willingly pay for services, and treat public assets as their own. It will also be visible when local Governments are able to implement decisions based on a vision for sustained improvement in the quality of life and the need to support and sustain growth in economic activity, rather than on narrow short-terms gains, the Minister added..

 

The Finance Minister said that another  major challenge for us is to succeed in devising systems and strategies to effectively meet the rising expectations and aspirations of the citizens. He said that as people experience improvements in their living environments expectations are bound to rise. He said that this has happened in the context of the work undertaken under the Mission. He said that our task as policy makers is charted out for us and we must find the most affordable and optimal ways of meeting these expectations.

 

In the end, the Finance Minister said that  learning from the experience of JNNURM, the Government has announced a new national vision for Slum-free India and the approach on which the policy for inclusion in cities and towns must be directed. He said that the ambitious scheme called Rajiv Awas Yojana for the slum dwellers and the urban poor is also taking shape. He said that we have to explore all options that help in empowering the urban local bodies and building their capacities to deliver on the expectations of the people. He said that huge investments – in terms of funds, expertise and man-hours- have been made, and are continuing to be made, to achieve success under the JNNURM programme. He said that there is a reassuring degree of self-questioning and of commitment to refining Mission strategies. The Minister said that it is a matter of satisfaction that these forces are coming together, propelled by citizens’ aspirations for better services and better infrastructure. The Thirteenth Finance Commission has recommended liberal grants for local bodies, he added.  The Minister concluded that there is every reason to be confident that the momentum of the last five years, and our continuing efforts, would help us in our focus on urban development and inclusive growth, and propel us towards our goals in the not too distant future.

 

 

 

The complete text of the speech of Union Finance Minister Shri  Pranab Mukherjee made on the occasion is given below:

 

 

“I am happy to be here today on the fifth anniversary of the launch of Jawaharlal Nehru National Urban Renewal Mission. I am also happy to see the participation of so many states and cities at this event. It shows the importance of the Mission for the various stakeholders. Let me start by complimenting my Cabinet colleagues, Shri Jaipal Reddyji and Kumari Seljaji for providing guidance to the Mission and also for organising this event. I believe a number of awards are to be announced today and I wish to congratulate all the winners in advance.

 

Urbanisation in India has occurred slowly and unevenly. Even though the extent of urbanization in our country is only 28 per cent, the size of urban population is 300 million, which is larger than the population of many countries put together. Our cities have limited access to basic infrastructure. There are inequities in distribution of public services among different income groups. This is accompanied by lack of effective management of services, which has created inefficiencies and compromised human well being. Deficiencies in services in urban areas largely affect the low-income segments of the population. Additionally, unregulated and haphazard growth in cities strains infrastructure, leading to environmental degradation.

 

With sustained high economic growth, the pace of urbanisation is set to accelerate. The next 25 years should see the urban population living in Indian towns and cities doubling. In such a scenario, it is important that we plan carefully to meet the challenge of urbanization fully.

 

Five years ago, we set for ourselves an ambitious agenda to mainstream development of urban infrastructure and to bring about institutional changes to support planned urban development. To achieve these objectives, we introduced strategies to finance urban development, introduce and sustain reforms, institutionalize service delivery mechanisms, encourage community participation, increase accountability of urban local bodies, and integrate the needs of urban poor into the planned urban development effort. 

 

We undertook this ambitious programme in a mission mode, and committed significant funding to it. In the last five years we have sanctioned and funded projects and we have provided hand holding assistance to States. We have also discussed at length to assess how the mission is proceeding. We have mulled over course refinement and correction strategies to ensure that the objectives of the Mission are achieved in the best and timely manner.

 

Five years into the Mission, with the benefit of the Mid-Term Appraisal of the 11th Five Year Plan also available to us, it is clear that there are several challenges that have to be meet successfully in order to achieve our objectives.

 

The first challenge relates to resources and funding of the Mission.  There is an appetite for more funds in the programme with more cities wishful of being covered under the Mission. Rapid urbanization has created more urban enclaves with legitimate aspirations for basic services of reasonable standard. There will always be limits on the budgetary support that can be committed to any programme. The situation therefore challenges us to mobilize resources from private sector sources as also from within local bodies. Fortunately, financial institutions and some local bodies are coming forward to tackle this challenge. Public Private Partnership (PPP) also needs to be explored with greater vigor and focus in this context. State Governments and cities must provide the enabling environment for the private sector to participate and for PPP to take roots in this sector. The need for facilitation of private sector funds through improved and transparent governance systems cannot be stressed enough. At the same time, users of public services have to be prepared to pay for the services through relevant levies and user charges.

 

This brings me to the second challenge. There is a need to bring about a change in the mind set of those who are running the institutions of urban governance and the users of urban services.  There has to be a commitment, cutting across all stakeholders, to improve urban infrastructure. There has to be an understanding that the Government is not some ephemeral cosmic body, which is a source of endless funds. We have to be ready to pay for the services we wish to avail for ourselves.  There has to be an appreciation that expenditure has to be prioritized, and paced, as there can never be enough resources to meet all our aspirations. There has to be an understanding that the amounts we invest into urban infrastructure services are to improve our own and our children’s health.

 

Local Governments have to understand that the short term discipline of belt tightening is a must to pay for long term improvements in services. The commitment to reforms by States and Urban Local Bodies under this Mission are in recognition of this need to change mind-sets. The true proof of change in mind-set will come when citizens willingly pay for services, and treat public assets as their own. It will also be visible when local Governments are able to implement decisions based on a vision for sustained improvement in the quality of life and the need to support and sustain growth in economic activity, rather than on narrow short-terms gains.

 

Enormous funds have been committed to this mission and huge amounts are being spent every day on JNNURM projects. The third challenge is to ensure that these large investments are safeguarded through adequate focus on maintenance of assets created under the initiative.  The challenge of setting up cash flow systems to ensure that the urban infrastructure and services are sustained over time cannot be under estimated. The point of undertaking an activity in a mission-mode is to bring about the required change within a specified period of time. You cannot have a mission following another mission following yet another one. At some stage the benefits of the mission must get integrated into the fabric of every-day life. Therefore, we must ensure that our gains from this mission are crystallized both in terms of maintaining the infrastructure created as also in terms of enduring changes in mind sets of the stakeholders.

 

Finally, a major challenge for us is to succeed in devising systems and strategies to effectively meet the rising expectations and aspirations of the citizens. As people experience improvements in their living environments expectations are bound to rise. This has happened in the context of the work undertaken under the Mission. Our task as policy makers is charted out for us. We must find the most affordable and optimal ways of meeting these expectations.

 

Indeed, learning from the experience of JNNURM, the Government has announced a new national vision for Slum-free India and the approach on which the policy for inclusion in cities and towns must be directed. The ambitious scheme called Rajiv Awas Yojana for the slum dwellers and the urban poor is also taking shape. We have to explore all options that help in empowering the urban local bodies and building their capacities to deliver on the expectations of the people.

 

There are other challenges that you as practitioners and implementers of this programme face on a daily basis. I have no doubt that you will continue to find the right solutions through the right counsel and commitment to strive for the better.  

 

Huge investments – in terms of funds, expertise and man-hours- have been made, and are continuing to be made, to achieve success under this programme. There is a reassuring degree of self-questioning and of commitment to refining Mission strategies. These are significant forces of change. It is a matter of satisfaction that these forces are coming together, propelled by citizens’ aspirations for better services and better infrastructure. The Thirteenth Finance Commission has recommended liberal grants for local bodies.  There is every reason to be confident that the momentum of the last five years, and our continuing efforts, would help us in our focus on urban development and inclusive growth, and propel us towards our goals in the not too distant future.

 

I hope that JNNURM will help us realize the dream of making urbanization in our country ecologically sustainable, economically productive and socially equitable. I am sure this National Conference will give you an opportunity to interact with each other and share your respective experiences.”

 

 

DSM/BY/GN