JNNURM: The Neo-Liberal Mission for Indian Cities

Lalit Batra

Urban India is today going through a process of rapid transformation in terms of monumental changes occurring in investments patterns, spatial configurations, employment structure, and class relations. These changes are a direct consequence of ‘third generation reforms’ initiated in cities in the late 90s. Cities, especially the metros ones, are today increasingly sought to be modelled on the image of global cities such as New York, London or Tokyo to function as regional nodes in the circulation of high finance, information flows and hi-tech productive activities. This new-found desire to be a ‘world class’ city, worthy of being recommended by credit rating agencies to be put on the global investment map, partly entails changing the geography of the city on the lines of serially reproduced productive and consumptive landscape, noted in the context of inter-urban competition, in order to lure highly volatile capital flows. The realisation of this vision is seen to depend crucially on correcting distortions in the ‘efficient’ functioning of urban land and labour markets by freeing the geographical and occupational niches occupied by the toiling masses and employing it for purposes seen to be in consonant with the creation of a world-class city. It is no wonder then that in the past one decade large tracts of prime urban land have been ‘freed’ from ‘encroachment’ by evicting over 1.5 million slum dwellers in just Delhi and Mumbai. Slum eviction is of course one of the most visible and brutal ways of effecting transformation of urban landscape. However other processes at work in urban areas are of no less significance. The eviction of the poor and re-making of the urban space is also carried out by closure of small scale manufacturing and commercial units; zoning laws, regulations and court orders against informal sector workers such as rickshaw pullers, hawkers and waste pickers; gentrification of older areas earlier occupied by low income households; regulating access to basic services like water, electricity, sanitation, health and education to those who can afford to pay through privatisation and commercialisation; cordoning off public spaces such as parks for private use of middle and upper middle classes and bringing about whole sale changes in the legislative and administrative framework of  urban development to make it corporate friendly. One of the offshoots of these processes is the slowing down of the growth rate of Rural-Urban migration, as shown by the 2001 Census, thus securing the city for the propertied sections of the society. Furthermore, the demographic concentration of the poor is increasingly seen to be taking place in the ‘degenerated periphery’ of urban areas thus invoking the imagery of apartheid cities.

It is in the context of the above mentioned processes that we need to analyse the UPAs government’s flagship programme for urban areas, the Jawahar Lal Nehru National Urban Renewal Mission.

Jawahar Lal Nehru National Urban Renewal Mission
The JNNURM is basically a reform linked incentive scheme for providing assistance to state governments and Urban Local Bodies (ULBs) in selected 63 cities, comprising all cities with over one million population, state capitals and a few other cities of religious and tourist importance for the purpose of reforming urban governance, facilitating urban infrastructure and providing basic services to the urban poor. With Rs. 1,26,000 at stake for a period of seven years the mission is the single largest initiative of the central government in the urban sector.

The JNNURM is the culmination of a process of neo-liberal urban reforms that has been going on since late 90s. Its predecessors include Urban Reforms Incentive Fund (URIF) and Model Municipal Law (MML) both of which were formulated on the basis of a set of policy postulates developed by the World Bank (WB), the Asian Development Bank (ADB), the USAID and the UNDP. Moreover several projects in the states of Karnatka, Kerala, Uttaranchal, Gujarat and Delhi are already underway which have been funded by the WB and the ADB and formulated and implemented on the same principles, which the JNNURM upholds. While both URIF and MML were based on a ‘carrot and stick’ policy, they had a limited scope as compared to the JNNURM. As such the mission has far reaching implications for the direction Indian cities will take in the future.

The broad framework of the Mission is as follows

The Mission is comprised of two sub missions, namely, Sub-Mission for Urban Infrastructure and Governance and Sub-Mission on Basic Services to the Urban Poor. The admissible components under both these Sub-Missions together include urban renewal, water supply and sanitation, sewerage and solid waste management, urban transport, slum improvement and rehabilitation, housing for urban poor, civic amenities in slums and so on. But the Mission document clearly states that (a) funds accessed cannot be used to create wage employment (b) land costs will not be financed (c) housing to the poor cannot be given free of cost (d) privatisation or Public Private Partnership (PPP) will be the preferred mode of implementing projects (e) a ‘reasonable’ user fee will be charged from the urban poor for services so as to recover at least 25% of the project cost and (f) the onus of minimizing risks for the private investor would be on state governments/ULBs.

Thus we see that the Mission seeks to set in motion a completely market driven urban development process. The intentions of the government become even clearer when we look at the set of reforms that the state governments and ULBs are supposed to carry out if they wish to avail Central assistance. These reforms have been divided into two parts - mandatory reforms and optional reforms. But this division is at best misleading because the so-called optional reforms are also mandatory in the sense that the states/ULBs have no choice but to implement them within a seven years time span.

Mandatory Reforms: State Level
The state governments seeking assistance under the JNNURM would be obliged to carry out the following mandatory reforms:

Mandatory Reforms: Municipal Level

Apart from these there is a set of optional reforms common to both state governments and ULBs, any two of which they are supposed to implement each year. These include:

Urban Renewal or Urban Aparthied?

Even a cursory glance at the reforms proposed under the Mission makes it clear that these are designed to exclusively benefit local and international investors and will surely make life worse for the majority of urban residents in the country. The repeal of Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) gives a free hand to the builder lobby to acquire vast tracts of land in the cities thus driving the poor out of the land market. The ULCRA, it is worth remembering, is the only legislative mechanism to enforce housing rights of the urban poor. Passed in 1976, the act aimed at preventing concentration of urban land in the hands of a few thereby checking speculation in and profiteering from land, socialization of urban land to ensure equitable distribution amongst various social classes and orderly development of urban built environment. The Act provided for putting up a ceiling on the possession and ownership of vacant land in urban areas and acquisition of excess land for creating housing stock for the poor. The ceiling in Class I cities like Mumbai and Delhi was fixed at 500 sq. mts. vacant land per owner. The ceiling in other cities was progressively higher according to the size class of cities. The total estimated vacant land in excess of ceiling limit was over 2,20,000 hectares which could have been used to build over 40 million houses for the poor. However, the radical looking Act was turned into a paper tiger by the anti people state and administration when it came to the implementation of the same. In fact, sections 20 and 21 of the Act itself provided escape route to landlords by granting significant exemptions in the name of ‘public interest’ and ‘undue hardships’. Consequently, a little over 8% of the total vacant land above the ceiling limit was acquired, less than half of which was put to the use for which the Act was passed. Realising the inherent weaknesses of the ULCRA, the National Commission on Urbanisation in 1988 gave recommendations for strengthening the Act by removing unreasonable exemption clauses. But instead of strengthening the Act, the NDA government repealed the Act itself in 1999. But urban development being a state subject, the Act is still in force in the states of Andhra Pradesh, Assam, Bihar, Maharashtra and West Bengal. With JNNURM putting the repeal of the Act as a mandatory condition for accessing central government funds under the mission, these states will have no choice but to repeal the Act. If we see this in conjunction with the green signal given to 100 percent FDI in real estate sector in February 2005, it becomes very clear that in the near future we are going to see massive concentration of urban land in the hands of domestic and foreign real estate firms.

Similarly, property title certification and computerization of land and property strike at the very root of the process through which the poor have so far staked their claim on the city i.e. de-facto occupation of land for residential and occupational purposes through a variety of informal networks and cleavages created through the workings of electoral democracy in India. With standardization, classification and computerisation of land titles what is going to happen is that while a number of informal forms of title are going to be excluded from the classificatory schema of the state, the large players with ‘interest’ in land will have all the information about urban land at their disposal with the click of the mouse thus making property transactions easier and ‘cost effective’. This process is already evident in Andhra Pradesh where in the name of computerising land records under the Bhoomi Project, only about 30 of the existing over 300 forms of land titles were recognised.

The intent to make land market efficient is also clear from other reforms such as reduction in stamp duty. It should be remembered that stamp duty is a major source of revenue for urban local bodies the cost of which is born by propertied sections of the society. With reduction in stamp duty while the propertied section will get major benefits, the municipalities will become financially vulnerable and would be forced to take high-risk loans from the capital market or bilateral/ multilateral funding agencies thus compromising their autonomy. This dependency would greatly reduce their capacity to respond to needs of the urban poor. In fact things are already moving in a direction where while on the one hand, all the critical decisions regarding urban development are being centralized in the hands of certain non-elected bodies, the elected bodies such as the ULBs are being left to deal with the repayment of debts taken to create so-called ‘world class’ cities. The stated objective of the JNNURM is increasing the ‘credit worthiness’ of Indian cities. The pressure to improve credit ratings in the international investment market would further force the ULBs to take up only those kinds of projects which ensure high rates of return to private capital. This would restrict the autonomy of the ULBs to implement pro-poor projects, as they are hardly profitable to private players. The projects where gestation period is high, the governments are supposed to counter guarantee the returns to the private sector. The ‘viability’ of whatever projects are implemented for the urban poor will be ensured through user charges and full cost recovery in seven years. In a situation where a large mass of urban poor is already rapidly sliding down the path of economic destitution due to pro-corporate policies unleashed by the state, forcing them to pay user fee for whatever urban services they use would amount to squeezing out the last drops of blood from their body.           

Though the Mission does make some politically correct noises about giving property rights and services to the urban poor they have to be seen in the context of dwindling livelihood opportunities in the cities about which the Mission says nothing and the grossly iniquitous distribution of land in urban areas which the Mission is going to sharpen. In fact, as discussed earlier, the JNNURM money cannot be used to purchase land or create wage employment or create health and education infrastructure- some of the fundamental needs of the urban poor. In this context, the pious intentions expressed in the Mission seem more like an attempt to ghettoise the poor and working people, along with all the hazardous occupations and substances of the cities, in the meager patches of land in the fringes or back lanes of the ‘world class’ city- and that too, by charging user fee! And in the name of involving private sector in solving the housing problem of slum dwellers, it sets the stage for selling lucrative public lands to corporate real estate interests, land mafia and contractors.

While these reforms have been offered on the benign platter of decentralization and community participation, it is clear from the way the Mission has been framed that the so called community participation is going to be restricted to the involvement of middle class ‘citizens’’ bodies and corporate NGOs, which are already functioning as the ‘demand side’ of economic reforms in the decision making process. In fact this is the story that has emerged from the implementation of the mission in the past one and a half years. The City Development Plans have been prepared not by the planning and development authorities of the state but by 29 corporate consultancy companies chosen for this task. So it is privatisation of not only services and infrastructure but of the planning itself. Further the reform linked assistance programme of the Mission undermines the principle of federalism in India. The 74th Constitutional Amendment did not envisage uniformity at the level of policy formulation and implementation as the Mission is asking for. What kind of a decentralization is this when the states and ULBs have no choice but to carry out urban reforms? The Central government in this scheme of things is thus playing the same coercive role vis a vis state governments and ULBs that the Bretton Wood institutions play vis a vis the Central government. Moreover by introducing such far-reaching changes in the way our cities are going to be governed, without any debate in the parliament or state legislatures, the UPA government has once proved that when it comes to following the dictates of its corporate masters it cares little about subverting the parliamentary democracy itself. All this is of course consistent with the efforts of the ruling class to de link economic policies from politics thus ensuring that profit maximisation for the corporate elite gets institutionally entrenched and any change in government remains at best a cosmetic change. It is no wonder then that the Mission has been widely greeted with applause by the corporate media, the real estate lobby, foreign investors, national and international finance capital, international bodies like the WB, the ADB etc. and upper middle class citizens’ groups like the Bangalore Action Task Force (BATF), Janaagraha, Bombay First, Centre for Civil Society and so on.

It becomes important, in the context of the unfolding transformation of urban India, to see the connections between changes in urban configurations, spatial or occupational, and changes in modes of accumulation reflected in newer forms of commodity production, circulation and consumption. Particular attention need to be paid to the relationship between the process Marx described as ‘primitive accumulation’ or what David Harvey refers to as ‘accumulation by dispossession’ and accumulation by expanded reproduction. An embedded praxis based on the articulation of proletarian class interests at different scales of the historical-geography of the rule of capital will go a long way in identifying both the sites of resistance as well as the actors of resistance to the hegemonic neo-liberal project of international finance.