The central government does not have a direct role to play in the functioning of municipal bodies. It however releases funds to state governments annually for urban development. These funds are released based on the recommendations of the Central Finance Commission’s report.
The central government also has a role in municipal administration by promoting urban development through various schemes. The Ministry of Urban Development at the centre is the main agency through which these schemes are implemented (See Below).
The Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
Sectors under coverage: Water supply, sewage and sanitation, waste management, road network, urban transport, development of bus and truck terminals, storm water drainage, slum area development, street lighting, basic services to the poor, development of inner city areas and heritage sites.
Obligations of state governments: States have some mandatory and some optional obligations relating to legal reform of urban laws, rationalization of stamp duties, making laws for increasing public and community participation. Municipal level reforms also have to be undertaken. These include improvement in accounting standards, introduction of e-governance, and provision of basic services for the poor.
How states become eligible for funds: States have to submit a City Development Plan, a Detailed Project Report, and a timeline for Implementation to the central government.
Implementation of projects:
Centre: A National Steering Group frames policies, monitors and reviews progress of various projects.
State: State Level steering Committees are formed, headed by the Chief Minister, and are assisted in monitoring projects by nodal agencies.
Example – The Implementation of JNNURM in Karnataka: A total of 46 projects in various cities have been granted funds by the central government under JNNURM. Bangalore is one such city where projects under JNNURM are being implemented. Under the City Development Plan for Bangalore, 35 percent of funds are granted by the central government, 15 percent by the state government, and 50 percent is contributed by the urban bodies in-charge of implementation. The state government has mentioned in the City Development Plan that the main task of implementation of the projects shall lie with the municipal bodies which are empowered to perform these tasks.
Sources: JNNURM City Development Plan For Bangalore; JNNURM Brochure prepared by the Ministry for Urban Development (GOI)