core sector communique

Relaxation of reform conditionalities under Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) for release of second instalments

The Cabinet Committee on Infrastructure approved the following proposals of the Ministry of Urban Development: (i) To de-link the reforms implementation with release of funds for the second instalment in the ongoing projects in the States of North Eastern Region & State of Jammu and Kashmir. (ii) The second instalment for the on-going projects sanctioned under UIDSSMT may be released to those Urban Local Bodies (ULBs) that have completed four out of the six mandatory ULB level reforms, including two reforms relating to property tax to the extent of 60% coverage of properties and 70% collection efficiency and in respect of reforms on recovery of O&M cost through user charges to the extent of 70 % are achieved. (iii) Those ULBs which are not able to achieve the relaxed standards as suggested by Committee of Secretaries to the extent of the 2nd instalment due in the on-going projects sanctioned under UIDSSMT, work may be carried out with the funds available with States. This would be reimbursed if reforms to the extent of (ii) above are achieved by March 2014. As per existing stipulations of Scheme guidelines of UIDSSMT, a total of 23 urban sector reforms were to be implemented within the seven year Mission period i.e. up to 31.03.2012 which has been extended by two years with the approval of Cabinet Committee on Infrastructure till 31.03.2014 for completion of projects sanctioned up to 31.03.2012 and completion of all undertaken reforms. Requests for release of the second instalment for on-going projects in NER States and J&K will be released on submission of requisite Utilisation Certificates to the extent of 70% expenditure of earlier released funds. Requests for release of 2nd installment of projects in all the States except NER States and J&K will be considered for release on completion of four reforms out of six mandatory ULB level reforms including two key reforms relating to property tax to the extent of 60% coverage of properties and 70% collection efficiency and reforms on recovery of O&M cost through user charges to the extent of 70% are achieved. States which are not able to complete the reforms to this extent will be asked to complete the projects from their own resources and get the amount reimbursed of the second instalment due on achievement of reforms to this extent by March, 2014. Under UIDSSMT Rs.11358 crore has been committed for 808 projects in 673 towns in 28 States and five Union Territories of which 142 projects have been physically completed and remaining projects are at various stages of implementation and likely to be completed before 31.03.2014 with commitment to complete all the undertaken reforms.