Concerned at the lack of means to fund urban infrastructure projects, the Economic Survey on Tuesday sought the financial empowerment of urban civic bodies by effectively bringing in user charges.
"Outlook on urban infrastructure, however, will depend critically on how fast the finances and functional efficiency of urban local bodies are improved. In terms of financing patterns, the foundation of urban infrastructure has to be user charges," the pre-budget Survey said.
Though municipal bodies have issued bonds, the funds raised were not enough and a user charges-based model could contribute considerably to capital expenditure, it said.
"Municipal bond issues have indeed taken place, the magnitude of resources raised is yet insignificant. The user charge financed approach can facilitate a massive increase in capital expenditure on urban infrastructure without worsening the fiscal problem," the document tabled in Parliament said.
On the Jawaharlal Nehru National Urban Renewable Mission, launched to encourage cities to improve existing services in a financially sustainable manner, it said, "The JNNURM is a significant move to address the creaking urban infrastructure, but comprehensive planning and effective monitoring are essential to take this scheme successfully to its logical conclusion."
The Survey said another key element of urban infrastructure is the transport system that is assailed by delays and poor contractor performance.
"Progress on roads and highways front will depend on how rapidly constraints such as delays in land acquisition, removal of structures and shifting of utilities, law and order problems in some states and poor performance of some contractors are removed," the Survey said.Economic Survey 2006-07: Complete Coverage
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