OVERVIEW | OPPORTUNITIES

Urban Infrastructure

 

OVERVIEW

SIZE

• As per Census 2001, only 28% of the 1.1 billion Indians live in urban areas
  • Expected to increase to 40% by 2021
• About 60% of the country’s GDP originates from urban areas
• Allocation of US$12 billion by the Government of India under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for a period of 7 years for improving urban infrastructure across 63 cities
• Key metro cities Mumbai, Kolkata, Delhi, Bengaluru, Chennai, Hyderabad and Ahmedabad allocated 47.5% percent of these funds

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STRUCTURE

• JNNURM functions under the overall guidance of a National Steering Group (NSG) which comes under the purview of Ministry of Urban Development
• JNNURM is aimed at fast-rack planned development of identified cities. Key highlights
  • Integrated development of urban infrastructure projects
  • Renewal and redevelopment of inner city areas
  • Provision of basic services to urban poor
• Funds to be channelised through Urban Local Bodies who will be responsible for implementation
• Implementing agencies to leverage sanctioned funds to attract private sector investments through PPP contracts

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POLICY

• 100% FDI under the automatic route permitted for townships, housing, built-up infrastructure and construction-development based projects subject to minimum scale norms
• JNNURM will provide grants/viability gap funding for projects

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Note: Cities eligible for assistance under
JNNURM are classified into 3 categories

	Category	No. of Cities	% Investment
	A	7	47.5%
	B	28	47.5%
	C	28	5.0%

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OPPORTUNITY

Major cities are implementing Metro Rail projects	Focus on improving urban road network	Potential for PPP in development of transportation infrastructure

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OUTLOOK

• Investments of more than US$50 billion would be required in the next 5 years to improve and build urban infrastructure
• JNNURM is the single largest initiative of Government of India for planned development of cities
• Opportunity for private players to partner with Urban Local Bodies (ULB) in development of urban infrastructure such as
  • Water supply and sanitation
  • Slum redevelopment
  • Urban transportation including roads, highways, expressways, Mass Rapid Transport Systems (MRTS) and metro projects
  • Solid waste management

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POTENTIAL

• A large component of development work will be through public-private partnership
• Water supply and sanitation in urban areas to attract investments over US$30 billion
• Mumbai is planned to be developed into a international financial centre
  • Thrust on development of transportation systems
  • Estimated cost of development is US$40 billion over next 10 years
  • Demand for 1.1 million low income houses by 2015
• Mass Rapid Transport Systems (MRTS) of many major cities such as Bengaluru, Chennai, Kolkata and Hyderabad are either being implemented or expanded through the PPP route

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For additional information: Planning Commission, Government of India (planningcommission.nic.in), Ministry of Urban Development (urbanindia.nic.in/), Jawaharlal Nehru National Urban Renewal Mission (http://jnnurm.nic.in)