Urban Renewal Mission: Whose Agenda?

People’s Democracy

Organ of the Communist Party of India (Marxist)


No. 49


Urban Renewal Mission:
Whose Agenda?



UPA government last week announced a Rs 1,00,000 crore National Urban Renewal
Mission (NURM) named after Jawaharlal Nehru, directed at substantial improvement
in infrastructure and tackling of poverty in over 60 major cities in India. It
had been approved by the government and would be launched by the prime minister
on December 3, 2005. The announcement has been greeted with much fanfare and
considerable applause by media and business circles. The general impression has
been that the Mission is being welcomed by all sections since it promises to
bring much-needed investment to urban infrastructure and address the pressing
but hitherto sadly neglected issue of urban poverty.


attempt is also underway to lull the entire political class into complacency
about the Mission. The NURM was in any case first conceived during the NDA
regime, albeit on a smaller scale. It was formulated through exercises spread
over several years, all these earlier inputs having been incorporated into the
present Mission. On the other hand, it is claimed that the Mission is being
launched in fulfillment of a promise made in the National Common Minimum
Programme (NCMP) under which a small paragraph merely states that the UPA
government “commits itself to a comprehensive programme of urban renewal and
to a massive expansion of social housing in towns and cities, paying particular
attention to the needs of slum dwellers.”




NURM is thus being painted in benign colours. However, even a slightly closer
examination of the Mission goals, parameters and methodology, as well as its
history and background, reveals a contrary picture of the NURM as a wolf in
sheep’s clothing. If the Mission is allowed to go ahead in its present form, the
nation will find itself trapped in an irreversible framework of unplanned,
liberalised and privatised urban development and municipal services, with powers
of state governments and public authorities severely undermined. While the
Mission itself is an executive programme, to be undertaken without any
legislative backing or accompanying public debate, it contains such
conditionalities as to undo substantial sections of India’s federal legislation
and derived systems of urban governance and planned development.


the entire Mission formulation and related actions have been orchestrated by
agencies such as the World Bank and USAID which have a vested interest and long
history of promoting neo-liberal developmental policies. These goals are sought
to be smuggled through the Mission under cover of its apparent benign intent.

series of executive and legislative actions taken recently in the capital city
of Delhi towards privatisation of its water supply and “reform” of its
Municipal laws, as an integral part of the above process, are a clear
illustration that these fears are firmly grounded in reality and of the very
real dangers lying ahead.




ostensibly aims at a fast-track development of 60 identified cities (35 cities
with million-plus population, capital city in every state, and a small number of
other cities of historical, religious or tourist importance) focusing on urban
infrastructure, civic services, community participation and accountability of
local governments, all as part of the decentralisation of urban governance
enshrined in the 74th Constitutional Amendment. 


Mission will have two Sub-Missions, one on urban infrastructure and another on
governance (main thrust being on water supply, sanitation, sewerage, solid waste
management, urban transport and road network) and basic services to the urban
poor (slum improvement and rehabilitation, sites and services, night shelters,
community toilets, housing). Total funds of around Rs 1,00,000 crores would be
mobilised and spent over seven years. Central grants ranging from 35 to 50 per
cent for different classes of cities, and smaller contribution from state
governments, would act as seed money for a substantial proportion of funds which
would be raised through multilateral loans and the market.



these funds come with strings firmly attached. The PMO press release states that
“efficient operation and maintenance of infrastructure and services” would
be ensured “
linking central financial assistance to implementation of reforms by the state
governments and urban local bodies… State governments/urban local bodies will
be required to sign a Memorandum of Agreement with the central government,
giving an undertaking to implement the reform agenda, as per a mutually agreed
road map. Fund releases will be linked to assessment of the implementation of
reform agenda”
. All the
pious-sounding phraseology apart, relevant documents of the ministry of urban
development (MoUD) make clear that
conditions are imposed to ensure “commercial sustainability in the provision
of services”. The neo-liberal agenda of commercialisation and privatisation of
urban services become even more explicit through other related measures and the
very process of formulation of the mission programme.



for cities wishing to avail of NURM assistance are:

  • Drawing
    up public-private-partnership (PPP) models for development, management and
    financing of urban infrastructure

  • introduction
    of independent regulators for urban services

  • rationalisation
    of stamp duty to no more than 5 per cent within five years.

  • repeal
    of the Urban Land Ceiling and Regulation Act

  • reform
    of rent control laws to stimulate private investment

  • implementation
    of a system to improve the efficiency of drinking water supply

    (this last being an euphemism for privatisation as other measures show)


Optional Reforms” are also to
be “freely” chosen from a list that incudes:

  • VRS
    Schemes, non-filling of vacant posts and other administrative reforms

  • revision
    of by-laws governing building construction, site development

  • simplifying
    conversion of agricultural land for non-agricultural purposes.





the 74th Constitutional Amendment for decentralisation of urban governance is
being invoked in support of the NURM, in actual fact the Mission seeks to use
the above coercive conditionalities to achieve, without corresponding
state-level legislation, a uniform policy conformity among Urban Local
Governments (ULGs) that the 74th Amendment did not envisage. Indeed, each state
has been implementing it differently reflecting the diversity of thinking in the


process is already underway wherein most states are preparing annual development
plans covering water supply, sanitation, sewerage, urban transport etc. About 40
cities with population of over 1 million are also setting up metropolitan
planning committees or development authorities in order to guide and oversee
planned urban development. Under the NURM, however, an entirely new process is
being set in motion that will supplant or supersede the current, often
legislatively enacted, processes.


states have already initiated a variety of projects in major cities (such as the
Metro in Bangalore and urban development projects in Karnataka, Kerala and
Uttaranchal) which, the union government has announced, will be covered and
funded under the NURM. These states would then have “automatically” accepted
important policies conditional under the NURM but without any discussions in
state legislatures or among the general public.


legislation is also pre-empted by the NURM conditionalities and policy bias. As
explicitly acknowledged by MoUD, numerous state municipal laws presently have
legislation allowing provision of urban services only by governmental or
quasi-governmental agencies, which would clearly stand in the way of
privatisation of services as envisaged in the NURM. Accordingly, a Model
Municipal Law (MML) has been drafted through a USAID-sponsored process with full
participation of MoUD! Under the NURM there will be enormous pressure on states
to adopt this Model Municipal Law or amend existing legislation so as to enable
undertaking of the reforms to meet conditionalities for the funds to be made
available by the centre


entire process of drafting the Mission programme and its associated policies has
also seen considerable lobbying by corporate interests in real estate,
construction, transport and urban services sectors, quite apart from the
explicit policy preferences and prescriptions of international agencies
supporting or sponsoring the formulation of the Mission. 
is thus a built-in “reform” agenda in favour of outright privatisation of or
at least private participation in urban infrastructure and services. 




above scenario is not some paranoid projection. Much of the above has already
taken place in Delhi, taking advantage of the supposed grey area between the
jurisdictions of the centre and the union territory administrations. Some of the
measures taken in Delhi have been checked as a result of public pressure but
serious note has not yet been taken either of the systemic nature of the problem
or the impact the Delhi role model will have on the rest of India, especially in
the context of the NURM.


Model Municipal Law has already been adopted almost wholesale in the form of the
Delhi Municipal Corporation (Amendment) Bill, 2005. 
Presuming the provisions of this Bill, the Delhi government has already
initiated a whole series of “reforms” through executive decisions and
notifications, even where the central government and its agencies have statutory


instance, innocuous-looking changes have been made to building byelaws that, on
closer perusal, are replications of provisions laid out in the USAID-sponsored
Model Municipal Law. The spirit of this Model Law, even more than the letter,
has also been enthusiastically adopted in the moves to privatise water supply
and make it commercially viable by moving towards “full cost recovery”. A
draft Bill to empower the Delhi Jal Board to take over the powers of the Central
Ground Water Authority regarding sub-soil water has also been prepared and has
only been put in temporary abeyance due to the hue and cry over the water
privatisation. Throwing open land development and housing construction to the
private sector and even to FDI, making land-use and zoning patterns
“flexible” to suit the interests of the real estate mafia, seeking revision
of Environmental Impact Assessment procedures in line with the above, depriving
the working class, urban poor and slum dwellers of their lawful entitlements
under existing laws, all have been undertaken by the Delhi government in pursuit
of the same agenda.




should come as no surprise that this agenda has been actively pursued by the
World Bank and other multilateral agencies promoting neo-liberal policies. In
this case, the USAID (United States Agency for International Development) has
been the major actor of a process going on for over a decade.


launched its Financial Institutions Reforms & Expansion (FIRE-D) Program in
1994 initially to improve provision of sustainable (read commercially viable)
water and sanitation services in India. The ambit of FIRE-D was subsequently
expanded to cover the whole range of urban infrastructure and services, in
particular promotion of private sector participation in, and methodologies of
drawing private funds into, urban development. Over the years, a number of
studies and consultancy projects were taken up jointly with the MoUD and various
state governments, especially Delhi. These efforts were also closely co-ordinated
with similar efforts, directed towards the same neo-liberal goals, undertaken by
other agencies such as the World Bank, Asian Development Bank, DFID-UK, UNDP


of the major outcomes of these concerted USAID endeavours was the drafting,
between 2000-2003, of the Model Municipal Law through a FIRE-D Project
implemented jointly with MoUD, with Times Research Foundation, Kolkata, as
consultant drawing in retired secretaries of MoUD and many other retired
bureaucrats. This Model Law, among other things, specifically addressed “the
for commercialisation of selected urban and civic services and private sector
(emphasis in the original)!”


then BJP-led NDA government, pursuing its “India Shining” ambitions,
enthusiastically embraced this neo-liberal “reform” strategy. A slew of
policies followed but could not be seen through such as the Good Urban
Governance Campaign, the National Urban Transport Policy, National Slum Policy,
National Hawkers Policy etc. An Urban Reforms Initiative Fund was launched with
much the same objectives as outlined in the NURM. The commitment of the BJP to
these “reforms” was endorsed as late as January 2004 in its national
executive meeting which resolved to promote “Urban sector reforms…,
implementation of model Municipal Laws… complete scrapping of Urban Land
Ceiling Laws… and introduction of user charges for maintenance of… public
utilities through public-private partnership.”


UPA government appears to be following the same neo-liberal policy trajectory
pushed by the same promoters such as the World Bank and USAID
In 2004 the government accepted further World Bank assistance based on its
Country Assistance Strategy 2004-07. The Mid-Term Appraisal (MTA) of the Tenth
Five Year Plan states that the government will implement the urban reforms
agenda along the lines discussed above and leading upto the NURM and its


light of the above, it is imperative that steps be taken to see that the terms
and conditionalities of the NURM are thoroughly discussed in parliament, with
the states and through a notified public hearing process. If such a Mission is
taken up at all, it should be done with the approval of parliament and not
simply as an executive programme. And the claims that the NURM advances the
goals of the NCMP should be subjected to thorough scrutiny.