Private participation a must for developing more houses in Delhi

The JNNURM funds have almost exhausted and much more are required for revamping Indian cities, says urban development secretary M Ramachandran in an exclusive interview with FE’s Kakoly Chatterjee. He also discusses the finer implications of the plan to allow private participation in building houses in Delhi and the preparations for Commonwealth Games.

Is your ministry focusing on new schemes now that most of the funds for Jawaharlal Nehru National Urban Renewal Mission (JNNURM) are already used up and the programme is in its last phase?

Cities and states have to concentrate on improving implementation and so it is not correct to say that there is nothing in hand now. Implementation is a big task as although a sum of Rs 29,000 crore has already been committed for mission cities and approximately Rs 12,000 crore have been disbursed, a huge amount still remains unutilised. If we keep the seven-year deadline of the mission, only two years are left for the completion while the task is mammoth. Lack of new funds could affect taking up of new projects, but for that the Planning Commission will try to find new funds for the urban agenda once the mid-term review is completed. However, the pace of implementation of the projects and meeting reform milestones still remains a concern. We are focusing on that and asking the states to expedite the pace. Of the JNNURM funds, a very small amount still remains uncommitted and some states—Jharkhand, Delhi and West Bengal— are yet to receive funds.

Also, we have started discussion with the World Bank for tying up a sum of $1 billion. The concept paper is taking shape and hopefully by the end of this year, they will go through the approval process. The release of funds is likely by the beginning of next year. As far as including more cities under JNNURM is concerned, it will depend on the outlay by the Planning Commission. The discussions that we have had with the deputy chairman of the Planning Commission show that he is aware of the requirements. Some reports have come out recently including the McKinsey and Isher Ahluwalia reports which say that more investments are required in the sector.

How will you compare urban development projects of India and those of other developing countries?

We do present our work at the international level whenever we have an opportunity. I attended the Transportation Research Board (TRB) meeting earlier this year where people wanted to know how we are implementing this programme in our cities. In fact, the housing secretary of US was curious to know how this works in a federal system. There was a request from Bangladesh which is keen to know how the mission is working. Also, there is a sharing of information via channels like Asian Development Bank or World Bank. Agencies like the World Bank are on board with us. Perhaps for the first time the World Bank showed some interest in Indian urban development and offered to work with us. So, there is an all-round recognition of the huge initiatives that have been taken in this area. This is a big achievement. There is scope for lot of give and take and these might not be formalised or structured.

What are your objectives when it comes to Delhi zonal plans?

Under the plan, areas would be earmarked for residential, commercial and mixed development.

The plan for Lutyens’ zone would be formulated in such a manner that the ambience remains largely intact. An eco-friendly development plan is under preparation for the Yamuna bank zone.

Will private participation be allowed in Zonal Plans?

A policy decision on that is yet to be taken and the Delhi Development Authority is still working that out. Currently, only DDA can build houses in Delhi but once private participation is allowed, the DDA and the private players would be in a position to pool in land, increase housing stock and provide housing for the poor, too. It may not be possible for DDA alone to bridge the gap between requirement and availability of housing in the city. Increasing housing stock is a huge challenge and it is not possible for one agency or company to address the scarcity.

What kind of resource mobilisation will be required to develop the infrastructure once the new land bank is released after the finalisation of the zonal plans?

I cannot quantify it but huge investments will be required to put water, sewerage, electricity and other infrastructure requirements in place.

The stimulus package for buses worked as a miracle for some cities for which revamping of urban transport was long overdue. Are you planning to extend this scheme to other cities as well?

It all depends on availability of resources. Earlier we had moved for extending this facility to cities but it could not be carried on because of fund crunch. New schemes can be planned only when the Planning Commission agrees and gives an outlay but there is no such development as of now. When the new plan period starts we hope to start new infrastructure schemes for the sector, depending on the resources available and private participation.

Will bonds be issued to raise funds?

Cities have to take a call if they want to raise more funds. There is no central assistance apart from the Plan panel allocation. If any local body wants to issue a bond it is welcome to do so. Urban local bodies are competent to do that but they have to become more dynamic by taking some steps like implementing double entry in their accounts system etc. Cities also have to change the way they function.

The real estate sector is worried over the service tax proposed in the Budget.They have expressed concern over the proposed tax, but the sector is now on the recovery path. One will have to wait for the finance minister’s reply in Parliament (to know if the tax will be implemented).

What is the status of the real estate regulatory Bill?

We are in consultation with various stakeholders before we finalise it. However, we will not be introducing the Bill in this session of Parliament. Once the Bill becomes a law, there will be more transparency in the sector.

How much work is uncomplete for Commonwealth Games and what challenges are you facing right now? Is there any fund crunch?

All work is on track and the stadia work should be completed by the end of June. It is a comfortable situation because the work is going as per the schedule. No, there is no fund crunch for the Commonwealth Games.

By when do you see Unified Metropolitan Transport Authority (UMTA) coming up in Indian cities?

Some of the cities in the country are already in the process of forming this body. It will be a single decision making body that will take policy decisions on all aspects of transport in a city like roads and traffic management and coordination between various modes like metros and buses. Common ticketing will be facilitated. It will be easier to be implemented once it becomes a legislative body