AMRUT to transform urban reforms

Why in news?

Recently, MoUD modified the AMRUT reform matrix, creating a template that enables States and cities to go beyond instrumentalism and implement transformational changes over three years.

The five major reforms:

  • ‘Trust and verify’( 40 % weightage)
  • ‘Professionalization of municipal cadre’ (25 %),
  • ‘Land titling law’ (15 %)
  • ‘Credit rating’ and ‘Value capture finance’ (10 % each).
  • The takeaway from JNNURM and the initial phase of AMRUT was that comprehensive and overarching reforms are difficult to pull off in one big sweep.

The AMRUT alters the approach in two ways:

* The number of reforms aimed at has been reduced and separated from project assistance.

* Shifted focus from penalisation to incentivisation.

Focus on impact

  • The Centre is increasingly looking at impact-oriented urban programmes where States and ULBs take more responsibility for implementation and sustaining urban infrastructure. So traditional grant-based programmes are being embedded with impact and outcome milestones.
  • Under AMRUT, professionalisation of municipal cadre, land titling law and policy for value capture finance are State prerogatives and have far-reaching impact on the local landscape. And all this comes at a time when expectations of citizens on livability standards across cities are growing fast.
  • It argues for cities to be entrusted with responsibilities, empowered with resources, and encumbered by accountability to transform into vehicles of competitive federalism. In that context, AMRUT rightly puts states and ULBs in the driver’s seat.
  • JNNURM was considered to have big city bias. AMRUT has cast the net wider, reaching all urban centres with a population of one lakh and more. Under the programme, the number of reforms expected from States and ULBs has decreased, but the number of cities expected to adhere to reforms have increased.
  • While higher fund allocation to transform urban agenda is certainly a key part of the urban revival mission, there is a growing acknowledgement that cities that sustain themselves through enhanced revenues, less capital transfers, and efficient internal systems become the beacons of the new urban agenda.

The way ahead

Under the new AMRUT reforms, in the initial year, States are also expected to formulate value capture financing policy, tools and rules for all cities with a million plus population. In the subsequent years, they will have to operationalise and implement it.

The list of reforms needed to overhaul cities is exhaustive and the determination of ULBs to walk the talk varies significantly. But by prioritising five core areas, AMRUT sharpens focus in the right areas. The Reform Incentive Fund also stokes competitive federalism.

History of Urban reform initiatives:

  • India’s tryst with comprehensive urban reforms started with the 74th Constitutional Amendment Act in 1992 to empower cities.
  • In December 2005, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was launched
  • Then in June 2015, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) programme was launched by the Ministry of Urban Development (MoUD).

Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Scheme:

It is an urban transformation scheme with the focus of the urban renewal projects to establish infrastructure that could ensure adequate robust sewerage networks and water supply.

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