The Hindu Business Line : Urban development schemes under one umbrella planned

The Minister for Urban Development & Poverty Alleviation, Mr Gulam Nabi Azad (right), with Dr A.C. Muthiah, Past President, FICCI, at `Cityscapes 2004': Global Convention on Agenda for Urban Infrastructure Reforms in the Capital on Monday. — Kamal Narang

New Delhi , Nov. 1

THE Urban Development Ministry is planning to bring the Centrally-sponsored schemes of infrastructure development in mega cities and the Integrated Development of Small and Medium Town scheme under one umbrella.

The Ministry also proposes to extend its coverage to all towns and cities of the country, the Union Minister for Urban Development and Poverty Alleviation, Mr Ghulam Nabi Azad, said here on Monday.

Inaugurating `Cityscapes 2004', jointly organised by the Ministry of Urban Development and Poverty Alleviation and the Federation of Indian Chambers of Commerce and Industry, Mr Azad said, "The unified scheme will push forward the reforms agenda, and State Governments desirous of accessing funds under the scheme have to enter into a memorandum of agreement with the Centre."

The agreement will consist of a basket of reforms, some of which have to be implemented by urban local bodies (ULBs).

Elaborating on the proposed merger of the two schemes, Mr Azad said this would help provide incentives for preparation of detailed project reports, capacity building and bring in project efficiencies and adoption of innovative and proven technology. A similar scheme exclusively for water supply and sanitation is also under consideration, Mr Azad said.

Mr Azad said to provide an additional incentive for ULBs to become credit-worthy and to invest in urban infrastructure, provision has been made for the issue of tax-free municipal bonds up to Rs 300 crore in the financial year 2004-05. So far, eight city Governments have accessed the capital market to raise funds for urban infrastructure financing by issue of tax-free municipal bonds.

"Accessing the capital market by the cities has brought about a perceptible change in the mindset of policy-makers as also the city managers," the minister said. There now exists a consensus on the need to structure commercially viable or bankable projects that could become an instrument for developing a long-term debt market in India, he said.

Talking about improving the efficiency and effectiveness of the urban development system, Mr Azad said the municipal governments and the urban infrastructure agencies were going in for management contracts.