(GIST OF YOJANA) Building Urban Infrastructure through AMRUT [DECEMBER-2019]

(GIST OF YOJANA)  Building Urban Infrastructure through AMRUT


Building Urban Infrastructure through AMRUT


India is witnessing a rapid increase in the urban population. As per the United Nations World Urbanization Prospects Report 2018, around 34% of India’s population lives in cities- an increase of about three percentage points since 2011.

  • By 2031, it is expected to grow by another 6% and by 2051, more than half of the nation’s population will be living in cities. Such a surge poses significant challenges in terms of demands for basic infrastructure services such as water supply, sanitation, wastewater management, and solid waste management.
  • At present, cities contribute nearly 65% of the country’s GDP, which is likely to go up to 70% by 2030 (McKinsey Global Institute, 2010). In view of this, basic infrastructure will play a vital role in enabling the cities to adequately provide civic services to improve the quality of life of citizens in becoming true engines of economic growth.

Urban India: Key challenges and opportunities:

  • The Government of India has undertaken significant investments in these areas in the last five years, as a result of which there have been notable improvements in basic services. However, challenges remain.
  • For instance, as per Census 2011, while 70% of urban households had access to water supply, only 49% had access to water supply within premises.
  • Further, due to lack of adequate treatment capacity and partial sewerage connectivity, more than 65% of the wastewater was being discharged untreated in the open drains resulting in environmental damage and pollution of water bodies (CPCB, 2015).
  • Water and Sanitation Program (WSP) of the World Bank (2011) estimated that the total annual economic impact of inadequate sanitation in India amounted to a loss of Rs. 2.4 trillion in 2006, which was equivalent to about 6.4% of India’s GDP.
  • Access to safe drinking water and scientific treatment of wastewater including septage are essential for the country in order to accomplish Sustainable Development Goal 6 (SDG 6.1 and 6.3 in particular).


  • Atal Mission for Rejuvenation and Urban Transformation (AMRUT) one of the flagship Missions of the Ministry of Housing and Urban Affairs (MoHUA) was launched by the Hon’ble Prime Minister on 25 June, 2015 in 500 cities across the country.
  • It aimed to address the challenges of water supply and sewerage/septage in cities across the country.
  • To providing non-motorised transport and public amenities,
  • To bringing reform through 54 milestones; and
  • To harness the associated opportunities of economic growth.

Coverage of the Scheme:

  1. 476 cities/towns with a population of one lakh and above as per 2011 Census;
  2. State/UT capitals not covered in (i) above;
  3. Heritage cities classified under Heritage City Development and Augmentation Yojana (HRIDAY);
  4. Certain cities on the banks of main rivers and from hill States/islands and tourist destinations.

• In all, 500 cities were covered under this scheme.

Allocation of funds:

  • The Mission has allocation of Rs. 1,00,000 lakh crore including central share of Rs. 50,000 crore. Balance is to be shared by the States/UTs. Of the total allocation, Rs. 77,640 crore have been allocated to projects. Ten per cent of central share is for Administrative and Office Expenses (A&OE) and another 10% is for reform incentive.
  • The projects in the UTs arc fully funded by the Centre. In the North East and Hill States, 90% of the project cost is shared by the centre. In case of other States, one-third of the project cost in the cities with population above 10 lakh and half of the project cost in other cities is shared by the Central Government.
  • The Central Assistance (CA) is released in three installments of 20:40:40. First installment is released immediately upon approval of the State Annual Action Plan (SAAP). Subsequent instalments arc released on receipt of utilisation certificates for 75% of CA and corresponding State/ULB share along with report of Independent Review and Monitoring Agency (IRMA).

AMRUT: Aligned with the needs of Urbanising India:

  1. Cooperative federalism: Keeping in line with cooperative federalism, State Governments have been empowered to appraise, approve, and sanction projects for their AMRUT cities- a departure from the erstwhile Jawaharlal Nehru National Urban Renewal Mission (JNNURM) wherein individual projects were sanctioned by the then Ministry of Urban Development.
  2. Framework for institutional reforms: AMRUT lays major emphasis on institutional reforms which aim to improve governance and institutional capacities of ULBs. Reforms are targeted for better service delivery and enhanced accountability and transparency. A framework of reforms (including reform types and milestones) has been prescribed to the States and AMRUT cities.
  3. Principles of ‘incrementalism’ and prioritisation: In the pursuit of ensuring universal coverage of water supply and improving sanitation coverage for the citizens, a step-wise approach towards service level benchmarking by the ULBs, a principle of ‘incrementalism’ has been introduced under the Mission, which is a gradual process of achieving the benchmarks. Recognising the urgent water and sanitation needs, States had to prioritise water supply and sewerage projects - water supply being the first priority.
  4. Incentivising over penalising: During the erstwhile JNNURM, 10% of the Additional Central Assistance (ACA) for projects was retained for non-completion of reforms. This led to all States/UTs losing this 10% as none could achieve 100% of reforms; hence, several projects were starved of funds and remained incomplete. In order to encourage States and reward their initiatives constructively, reform implementation is incentivised under AMRUT - 10% of the budgetary allocation is earmarked for reform incentive and it is over and above the allocation for projects. Incentives of Rs. 400 crore, Rs. 500 crore, Rs. 340 crore, and Rs. 418 crore were distributed during 2015-16, 2016-17, 2017-18 and 2018-19 to States/UTs, respectively, as incentive amounts for the reforms achieved against benchmarks in the last four fiscal years of implementation. This amount is untied and can be used on any item recognized under AMRUT with or without State/ULB share.
  5. Monitoring of the Mission: Programme monitoring is being done at various levels to understand progress and gaps in implementation. At State level, State High Powered Steering Committee (SHPSC) chaired by the Chief Secretary monitors and approves the Mission projects in its entirety. At Central level, Apex Committee chaired by the Secretary, MoHUA, approves State Annual Action Plans (SAAPs) and monitors the progress. Also, projects are monitored on real-time basis via Mission MIS Dashboard with geo-tagging of all projects. In addition, District Level Regional Review and Monitoring Committee (DLRMC) conducts detailed scrutiny of the projects. IRMA appointed for each State reviews and monitors the progress of the Mission on the ground as a third party.

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Urban Reforms:

Some of the significant reforms are as under:

  1. Online Building Permission System (OBPS): With a view to facilitate Ease of Doing Business in construction permits, an Online Building Permission System (OBPS) with Common Application Form and seamless integration of all clearances/No Objection Certificates (NOCs) from internal/external agencies has been made operational in Delhi and Mumbai since April 2016.
  2. Replacement of street lights with LED lights: 65 lakh conventional streetlights have been replaced with energy efficient LED lights. It has led to energy savings of 139 crore KWH per annum and reduction in CO2 emission by 11 lakh tonnes per annum.
  3. Credit Rating: Four hundred and sixty-nine AMRUT cities have been credit rated out of the total 485 cities where the credit rating work had commissioned. One hundred and sixty-three cities have been rated investable grade (IGR) of which 36 cities have A and higher rating. Cities with lower ratings are the following measures to improve their performance so that they become credit worthy and raise funds for their projects.
  4. Municipal Bonds: Rs. 3,390 crore have been raised through municipal bonds during 2017-19 for upgrading urban infrastructure by 8 Mission cities (Ahmedabad, Amaravati, Bhopal, Hyderabad, Indore, Pune, Surat, and Visakhapatnam). As an incentive. The Ministry pays Rs. 13 crore for raising bonds to the tune of Rs. 100 crore, up to the limit of Rs. 200 crore per city. This translates into an interest subvention of 2% over the bond period. Rs. 181 crore has been released for raising bonds in 8 cities. Raising bonds leads to improved governance, accounting systems, finance, transparency, accountability and delivery of services in the ULBs. We target to get at least 50 cities to raise bonds in the next 4 years. That will also enhance their self-dependence and confidence to serve the citizens.

Way Forward:

  • AMRUT has made remarkable strides in improving water and sanitation coverage in urban areas. During the Mission period, it envisages to cover over 60% of the urban population living in 500 cities with universal coverage of water supply and over 60% coverage of sewerage and septage services.
  • However, more than 3,500 smaller cities/towns out of 4,378 statutory towns at present are not covered under any central scheme for water supply and Faecal Sludge and Septage

Management infrastructure.

  • Keeping in view SDG Goal 6 for ensuring sustainable management of water and sanitation for all and announcement of Jal Jeevan Mission for conserving and judiciously using the precious water by Hon’ble Prime Minister and special needs of 115 Aspirational Districts, to be addressed on priority, it is imperative to take forward the achievements of this Mission to smaller cities as well.

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