States and UTs to form, approve, execute projects under new urban missions

States and UTs to form, approve, execute projects under new urban missions

Based on the learnings of implementation of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) that ended up in sub-optimal physical and financial performance, the Central Government has radically overhauled the Operational Guidelines for implementation of Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All Mission in Urban Areas. The Guidelines released by Prime Minister Narendra Modi at the launch of the three new urban missions here today allow the States and Union Territories full liberty and flexibility in formulation, approval and execution of projects under the three missions. The two urban ministries have sought to ensure timely sanction and execution and certainty of resources for various projects and participation of citizens in identifying development needs under the new urban schemes. Central Government has virtually withdrawn from the earlier practice of appraising and sanctioning individual projects, there by ending the scope for subjectivity and discretion.

The major new provisions incorporated in the Guidelines and common to all the three urban  missions include:

  • Objective criteria for selection of cities and allocation of funds: Potential Smart Cities and AMRUT cities are to be based on an objective and equitable criteria giving equal weightage to urban population and number of statutory cities in each State/UT; Housing Mission to be implemented in all the 4,041 statutory cities/towns.

  • For smart city development, each selected city will be provided a central assistance of Rs 100 cr per year. Under AMRUT, allocation of funds will be as per urban population and number of cities/towns in each State/UT. Under Pradhan Mantri Awas Yojana (PMAY) in urban areas, it will be based on the number of urban poor and slum dwellers.
  • States/UTs to appraise and approve individual projects unlike in the past when urban ministries used to do so. To avoid delays and non-completion of projects on account of lack of resources, States/UTs will now be required to firmly indicate resource tie ups under state level action plans.
  • To enhance urban governance, clear action plans for timely implementation of identified reforms need to be indicated.
  • Consultations with urban citizens made mandatory to ensure need based and bottom up planning of projects.
  • State level action plans to clearly indicate convergence with other central and state government schemes as appropriate for resource maximisation.
  • PPP model shall be the main resource of resource mobilisation.

    Involvement of Members of Parliament and State Assemblies in formulation and monitoring of projects provided for. Mission-wise Guidelines seeking better execution of projects are as below:


  • No projects without availability of land and all necessary clearences shall be included in the Mission by States/UTs.
  • States shall transfer funds to urban local bodies within seven days of transfer by central government and no diversion of funds to be made failing which penal interest would be charged besides taking other adverse action by the centre.
  • Action plans should provide for O&M costs for assets created for at least five years based on user charges.
  • Instead of penalising States/ULBs for non-implementation of reforms by linking fund release with progress on reforms resulting in delays, the Guidelines now provide for incentivising reforms by earmarking 10 percent of annual allocation to be allocated to good performers at the end of each year.
  • For water supply, sewerage, septage, storm water drains and urban transport, centres share to be in the range of 1/3 of project cost to 50 percent. States to mobilise the balance with its own share being not less than 20 percent.

    A set of 11 Reforms to be implemented in four years including promoting e-governance, improving collection of various taxes, fee and user charges, augmenting double entry accounting, constitution and professionalisation of municipal cadre, preparation of GIS based master plans, devolution of funds and functionaries to urban local bodies, review of building by-laws, setting up financial intermediaries for pooling and disbursement of resources, credit rating of urban local bodies, energy and water audit and achieving Swachh Bharat milestones.

Source: BW Smart Cities

Smart Grid Bulletin February 2019

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