By Anushree Jois
The Housing and Urban Affairs Ministry was recently criticised for poor utilisation of funds released towards implementation of six major schemes. The standing committee on urban housing observed in its report that the ministry had utilised only a fifth of the released amounts. It expressed concerns that the implementation of the schemes would remain a distant dream.
Under-utilisation of funds
In the past few years, the ministry has prominently launched Smart Cities Mission, Swachh Bharat Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Heritage City Development and Augmentation Yojana (HRIDAY), National Urban Livelihood Mission and Pradhan Mantri Awas Yojana (PMAY). Each of the projects has to meet their deadlines in the coming three to four years. As such, it is reasonable to expect that a 40% completion can be expected at the very least. The real picture is however disappointing. As against the budgeted, Rs 1.31 lakh crore for these six pet projects, the centre has released only an amount of Rs 36,194 crore so far, of which only 21.6%, Rs 7851 crore has been utilised.
Drawing a parallel between progress in the implementation of projects and utilisation of funds, the standing committee in its report has recommended that the ministry puts in renewed efforts to resolve any obstacles and work towards implementation of the schemes. It has observed that the Smart Cities Mission has utilised a meagre 1.8% of the funds released, which is the least of the major projects. While the largest chunk of the funds amounting to Rs 12,447 crore was earmarked for implementation of AMRUT, only Rs 2,480 crore has been utilised to date.
Current status and deadlines
The urban population is expected to grow to 600 million by 2030 and to cater to their needs, the government has identified smart cities to implement its projects and provide for basic infrastructure including housing, water facilities, and even jobs. State governments along with local municipal bodies are expected to implement these projects under the aegis of the central government.
The Smart Cities Mission was flagged off in 2015 with an objective to create 100 smart cities by 2022. Only 3% (23 projects) stand completed out of the 642 projects while utilising 12% of the funds. The remaining projects are either being tendered or work-in-progress. The government introduced AMRUT in 2015-16 primarily for providing water and sewerage facilities, amongst others such as transport, parks, etc., by 2020. The project is centrally sponsored and has received only 13% of the funds so far and is being implemented in 500 cities.
With respect to providing urban housing facilities under PMAY, it is seen that 93% of the houses are under construction. The Ministry of Rural Development is aiming to construct 10 million houses for rural households by its deadline in 2019. The Swachh Bharat Mission aims to make India 100% free of open defecation and 100% solid waste management by Mahatma Gandhis 150th birth anniversary on October 2, 2019. While announcing the Budget for the coming financial year, Finance Minister, Arun Jaitley stressed that Swachh Bharat Mission has benefited the poor, and the government has already constructed more than six crore toilets.
HRIDAY was launched in 2015 with the objective of developing 12 heritage cities by November 2018. More than half of the cities identified however are yet to even begin the development process. Varanasi and Amritsar appear to have achieved a progress of 43% and 37%. Given the present circumstances, it is highly likely that the deadline will have to be extended.
Did the government over-promise?
Based on the current status of implementation of projects and keeping in mind the upcoming deadline, one might wonder if the government was too ambitious in chalking out the policy framework. It is also being significantly blamed for delaying the release of funds to states governments.
State governments are receiving half the funding for a majority of the projects from the centre and are expected to raise the remaining funds. They are also responsible for proper and timely implementation of the projects. Not all state governments have the capacity to raise the required funds and have the competent personnel to carry out development works of this scale. This has largely affected the progress of the projects. In fact, Arunachal Pradesh has recently requested the Centre to invest 90% instead of the agreed 50% as the state government lacks funds for implementation of the mission in Pasighat Smart City.
State governments often have their own set of objectives to achieve and promises to fulfil. Implementation of projects may largely suffer due to lack of common objectives. In cases where there is a resonance in the objectives of the centre and states, there is progress in the implementation of the projects. For example, in the state of Mizoram, water is a limited resource and the state government is seen to be enthusiastically working towards implementation of AMRUT project. Similarly, the Ministry of Rural Development has faced very few issues in carrying out the construction of rural houses in various states. This, however, is not the case in every state for every project.
Fighting their own devils
It is seen that out of the funds released by the centre, state governments have managed to utilise only Rs 13,000 crore. This is because different projects are encountered with different obstacles unique to that project. Under the PMAY, for instance, real estate approval processes in urban areas are proving to be time-consuming. India is, in fact, ranked 185 out of 187 countries in Ease of Obtaining Construction Permits Index released by the World Bank. Easing regulations and approval processes are the need of the hour.
Similarly, as Smart Cities Mission is being implemented by floating special purpose vehicles (SPVs), the first 18 months or so is often lost in forming the vehicle, raising tenders and identifying contractors for performing works. A more convenient and feasible option is required to be supplemented to fasten the process of implementation.
Assessing the progress
To corroborate utilisation of funds with the rate of development, it is seen that states that have received most of the funding have shown more progress in completing projects, such as, Tamil Nadu, Gujarat, and Madhya Pradesh. While Goa and Chandigarh having received least assistance have shown less progress. On the other hand, it is argued that the standing committees observations of under-utilization are based only on the 1st instalment of funds released, while the utilisation certificates for the 2nd instalment of funds are submitted and funds will soon be released. Also, as projects such as Smart Cities Mission are equally funded by states and the centre, drawing conclusions of progress based on utilisation of funds of the centre alone is but flawed. Progress cannot be measured from the date of identification of a city as the first one and a half year is dedicated to set up SPV and it is only after that, that work can be undertaken. A strait-jacket approach to measuring progress for all projects will thus prove useless.
It is recently reported that under the pretext of achieving targets under the Swachh Bharat Mission, hurried implementation was underway in many places. While public toilets are being constructed, they are not being supported by necessary sewerage facilities. Such progress is hardly any progress and is in fact, more regressive.
Way forward
As it has been a couple of years since the projects have been launched, the time is apt for the government to take a step back and assess if the projects are moving in the desired speed and direction. It is important to ensure that for the implementation of schemes and projects, the state governments and local bodies have a structured support system to ease the process of forming SPVs, issuing tenders, identifying contractors and mainly, implementing the projects.
Progress and targets should be realistic as pressure to outperform could affect the quality of work carried out. Projects should be implemented in letter and spirit for actual impact to be felt. Both quality and quantity control need to be set in place. With an increase in budget allocation in the coming years, it is vital that the government ensures that the funds are properly utilised to achieve the ambitious projects.