Govt's flagship scheme flags owing to funds misuse: CAG

Seven years after it was launched, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - the UPA government's flagship programme to improve the decrepit urban infrastructure of Indian cities - has failed to deliver, a report by the country's top auditor has revealed. Moushumi Das Gupta reports.

Seven years after it was launched, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) - the UPA government's flagship programme to improve the decrepit urban infrastructure of Indian cities - has failed to deliver, a report by the country's top auditor has revealed.

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Slamming the two implementing ministries - Urban Development and Housing & Urban Poverty Alleviation - for "poor progress" in projects, the Comptroller & Auditor General - in its performance audit report on JNNURM - has come across major lapses such as diversion of funds worth Rs 114 crore for non-JNNURM purposes, failure of states to implement governance reforms, and ineligible beneficiaries getting benefited.

Of the 2,815 urban infrastructure and housing projects for urban poor approved under JNNURM till March 2011, only 8.9 % have been completed. Of the 16 lakh dwelling units approved, only 4.18 lakh were competed.

The auditor observed that the two ministries are ill-equipped to monitor a project of this magnitude. Of the total investment of Rs 1 lakh crore proposed under JNNURM, the Centre's share was Rs 66,084 crore while states had to foot the remaining cost. Till March 2011, Centre had released Rs 32,934 crore.

The release of funds was linked to implementing mandatory governance reforms.

The CAG found that not only states failed to implement reforms like giving more power to municipalities and reducing stamp duty, among others, eight states - Andhra Pradesh, Chattisgarh, Haryana, Jharkhand and Himachal Pradesh - diverted funds amounting to Rs 114 crore for purposes other than those admissible under JNNURM.

Besides, the auditor also came across several instances where states earned interest out of JNNURM funds. Till March 2011, 22 states earned interest to the tune of Rs 210 crore. Karnataka, Madhya Pradesh, Tamil Nadu and Meghalaya even utilised the interest for non-JNNURM purposes.