Urban Renewal Mission: Whose Agenda

THE 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.

An 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.”


The 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.

Worse, 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.

A 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.


JNURM 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.

The 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.


All these funds come with strings firmly attached. The PMO press release states that “efficient operation and maintenance of infrastructure and services” would be ensured “by 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 these 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.

“Mandatory Reforms” 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)

“Five 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.


Whereas 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 country.

A 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.

Many 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.

State-level 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.

The 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.  There is thus a built-in “reform” agenda in favour of outright privatisation of or at least private participation in urban infrastructure and services.


The 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.

The 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 jurisdiction!

For 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.


It 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.

USAID 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 etc.

One 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 concern for commercialisation of selected urban and civic services and private sector participation (emphasis in the original)!”

The 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.”

The 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 conditionalities.

In 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.