"I am happy to be present at this National Conference of Leaders of Local Bodies and State Governments to take stock of the work we began some 22 months ago through the Jawaharlal Nehru National Urban Renewal Mission. I compliment the Minister of Urban Development Shri Jaipal Reddyji and the Minister for Housing and Urban Poverty Alleviation Seljaji for taking the initiative in this matter and also leading from the front this major initiative for urban transformation in our country.

At the outset, I wish to say that a systematic effort to improve our cities has been long overdue. India no longer lives only in its villages but increasingly in its small towns and mega cities. The process of economic growth has unleashed dramatic changes in our cities. Cities have become major growth engines of our economy opening up unprecedented opportunities.

At the same time, this rapid urbanization has spawned its own set of problems. A large proportion of our urban population still lives in slums in unacceptable conditions. Urban housing stock, especially housing for the poor, has not kept pace with the expanding demand. As much as 30% of urban households live in single room units. This creates social and health problems. It affects the education of young children. The demand for civic services has shot up exponentially.

We, therefore, need to facilitate and respond to this transformation through effective measures for improvement of city services, proactive creation of urban infrastructure and improved systems of public governance to match the requirements of the situation.

Since its launch, the JNNURM has come to signify the agenda for urban transformation all over the country. It has brought about a uniformity of approach and strategy creating an umbrella framework involving almost all the stakeholders. Our approach of accelerating the implementation of urban sector reforms by linking these to support for large-scale capital investment for urban infrastructure, has been widely accepted. I sincerely hope the National Urban Renewal Mission will help us realize the dream of making urbanization in our country ecologically sustainable, economically productive and socially equitable.

I commend both the Ministries as well as the representatives of the State Governments and Mayors of Municipal Corporations present here for their enthusiastic response to this initiative. 63 cities have already developed their "City Development Plans" and are in the process of preparing Detailed Project Reports to access funds.

One positive feature observed in these plans is that about 60 per cent of the investment is going for improvement of essential basic services like water supply, sanitation and sewerage. We should ensure that those localities that today have minimal services gain the maximum from the new investments proposed. In fact, internal earmarking in city budgets for basic services to the urban poor has been made an important reform conditionality. I would urge the local bodies and the state governments to give this area priority attention to ensure that we do develop inclusive cities where every citizen has an entitlement to basic services.

We are all agreed that governance reform is the cornerstone of urban renewal. Such reforms would ensure the long-term sustainability of the investments and greater transparency and accountability in urban planning and development. Hence the link between investment and reform. This will also be the approach to be adopted in the XIth Five Year Plan, which will further strengthen the JNNURM. Our Government stands committed to providing the requisite budgetary support to States and cities.

I urge State and Local Governments to advance the timelines for implementation of these reforms so that the Mission's objectives are met within the specified time period. For example, the reforms pertaining to improving Urban Local Body finances could be completed within the first three years of the Mission. This will enable these bodies to become more viable and eligible to enlist institutional finance. We are considering the idea of offering further incentives to States and cities that implement reforms on a faster track.

I have been continuously reviewing the progress of this very important flagship programme of our government with my cabinet colleagues. We find differential performance in its implementation across States, with some doing well and others lagging behind. Cities that lag behind will find it increasingly difficult to catch up. Time is of the essence and I therefore urge States to work closely with the two Central Ministries to monitor and enforce early implementation.

Another important issue that has arisen relates to leveraging of JNNURM funds. The sum of Rs. 50,000 crore provided by the Government is hardly adequate for meeting the infrastructure investment needs of JNNURM cities and towns. States must, therefore, leverage these funds and raise more from the market. To do so, we must improve the quality of projects and the fiscal health of Urban Local Bodies.

The private sector can be encouraged to invest in urban development through public-private partnerships. Urban infrastructure and services and low-cost housing offer huge potential for such partnerships. State Governments and cities must provide the enabling environment for the private sector to participate and for public private partnership to take roots in our country.

We need urgent capacity building within urban local bodies to enable them to design projects, undertake reforms and raise adequate resources. The 74th Amendment was a pioneering initiative of the late Shri Rajiv Gandhi conceptualizing Urban Local Bodies as important developmental entities. However, in practice their capacity to undertake economic and social planning and address issues of poverty, environment and the like is limited. This must change and change for the better.

The JNNURM expects these local bodies to become participatory, transparent, and accountable. All these challenges call for immediate attention to the issue of managing and enhancing human capital of our urban management institutions. State Governments should look at innovative ways to professionalise urban management.

In the final analysis, it is the residents of the cities themselves who must come forward and take ownership of this very ambitious programme. There are a large number of civic minded and talented professionals in all our cities and towns. It is precisely to tap this valuable resource that the Mission has suggested the creation of a "Voluntary Technical Corps" for Urban Local Bodies. Given the right opportunities, I am sure that the beneficiaries themselves will volunteer their time and expertise for the betterment of their cities.

Apart from addressing the needs of large Mission cities, we must also focus on improving basic services in other non-Mission cities and towns. Given the level of interest exhibited by small and medium towns, we do now recognize that the financial allocations made for them are not adequate. I am, therefore, asking the Planning Commission to look into the feasibility of providing additional assistance to small and medium town.

There was a time policy planners in India thought that our effort should be to limit the growth of the cities and prevent people from migrating into them. Today, our policies are better informed and we have begun to see urbanization as an opportunity. All projections of the coming decade indicate that the process of urbanization would accelerate rapidly. If we can manage this transformation effectively, the physical and economic regeneration of urban India is well within our reach.

The Jawaharlal Nehru National Urban Renewal Mission, to my mind, is an immense opportunity for our country to create livable, just and inclusive habitats through responsive and transparent local government systems. Let us, therefore, pledge to work together to add greater vigor and energy to JNNURM and realize our common goal of humane and efficient urbanization. As leaders of this Mission, in the cities you come from, the success of this bold new initiative for urban renewal depends critically on your commitment and on your efforts.

Once again, I commend your efforts, and I wish the deliberations success.

Jai Hind."