
## Demand For Grants 2023-24 Analysis Housing And Urban Affairs

Indian cities are expanding both in terms of size and number.  As per the 2011 census, 31% (377 million) of India's population was living in urban areas, and by 2050 more than 50% of India's population is estimated to be urban.  Urbanisation is the process of growth of cities (either through a natural increase in population, or migration, or physical expansion).  Urban centres offer opportunities and attract people, capital, and technology due to improved access to services, capital, and knowledge pool.  However, the rapid influx of population and dense settlements leads to several issues in cities such as traffic congestion, environmental pollution, and housing shortage. The Ministry of Housing and Urban Affairs formulates policies, coordinates activities of various agencies (at the state and municipal level), and monitors programmes in the area of urban development.  It also provides states and urban local bodies (ULBs) with financial assistance through various centrally supported schemes.  Over the past few decades, several schemes have been introduced to ensure that urbanisation is better planned and services provided in cities are of adequate quality.  However, Indian cities continue to face issues mentioned above along with poor infrastructure. One of the key reasons for poor urban infrastructure is the poor capacity of ULBs and their inability to collect revenue.  The High-Powered Expert Committee for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031 for upgrading urban infrastructure.  Hence, budgetary outlays by the centre and states may not be enough to cater to growing demands of urbanisation.  Further, with the current allocation, the funds are not getting utilised by the Ministry.  This affects the implementation of schemes, and consequently the service levels in cities.  There is a need to empower ULBs both in terms of governance and financial capacity.  This would help them decide what projects to prioritise and how to raise the revenue for them, and help improve city governance. Urban transportation governance is also fragmented at the city level, which leads to issues related to coordination between different agencies and land use planning.  The central government funds metro rail projects in cities.  Several high-level bodies have suggested that before setting up such capital-intensive projects, there may be a need to rethink modes of urban transport based on the spatial pattern of a city.  
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi - 110002 
Tel: (011) 43434035, 23234801 ◼ www.prsindia.org 

This note looks at the expenditure incurred by the 
Ministry, the status of the various schemes 
implemented by it, and the issues faced with investment 
required for urban planning. 

## 2023-24 Budget Speech Highlights1

- 
An Urban Infrastructure Development Fund will be established for the development of urban infrastructure by public agencies in tier-2 and tier-3 cities.  The Fund will be managed by the National Housing Bank and is expected to have an annual allocation of Rs 10,000 crore.   
- 
Cities will be incentivised to improve their credit worthiness for municipal bonds through property tax reforms and setting aside user charges. 
- 
States and cities will be encouraged to undertake urban planning reforms such as efficient use of land resources, transit-oriented development, and enhanced availability and affordability of urban land.   
- 
All cities and towns will be enabled for 100% 
mechanical desludging of septic tanks and sewers.  
Enhanced focus will be given to scientific 
management of dry and wet waste.   

## Overview Of Finances2

The total expenditure on the Ministry of Housing and 
Urban Affairs for 2023-24 is estimated at Rs 76,432 
crore.  This is an increase of 2.5% over the revised 
estimates for 2022-23.  In 2023-24, the revenue 
expenditure of the Ministry is estimated at Rs 50,434 
crore (66% of the total expenditure) and the capital 
expenditure is estimated at Rs 25,997 crore (34% of the 
total budget).  The capital expenditure is mainly on 
metro projects (Rs 23,056 crore).   

## 2023-24 Budgetary Allocation (In Rs Crore)

| 2022-23       | 2023-24    | 2021-22    |
|---------------|------------|------------|
| Actuals       | RE         | BE         |
| % change (RE  |            |            |
| 2022-23 to BE |            |            |
| 2023-24)      |            |            |
| Revenue       | 80,894     | 50,865     |
| Capital       | 25,946     | 23,681     |
| Total         | 1,06,840   | 74,546     |

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS.   

## Expenditure Across Schemes

The Ministry implements several schemes to improve 
service delivery in urban areas.  These include: (i) 
Pradhan Mantri Awas Yojana - Urban (PMAY-U), (ii) 
Atal Mission for Rejuvenation and Urban 

Transformation (AMRUT), (iii) 100 Smart Cities Mission, (iv) Swachh Bharat Mission - Urban (SBM-
U), and (iv) PM Street Vendor's Atmanirbhar Nidhi (PM SVANIDHI).  The Ministry also implements metro projects across states/UTs. 

2021-22 Actuals 
2022- 23 RE 
2023-24 BE 
% change (RE 2022-23 to BE 2023- 24) 
PMAY (Urban) 
59,963 
28,708 
25,103 
-12.6% 
MRTS and Metro 
23,473 
20,401 
23,175 
13.6% 
AMRUT 
7,280 
6,500 
8,000 
23.1% 
Smart Cities 
6,588 
8,800 
8,000 
-9.1% 
SBM (Urban) 
1,952 
2,000 
5,000 
150.0% 
PM-SVANIDHI 
298 
434 
468 
7.8% 
DAY-NULM 
794 
550 
0.01 
-100.0% 
Others 
6,492 
7,153 
6,686 
-6.5% 
Total 
1,06,840 
74,546 
76,432 
2.5% 

Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS. The 2023-24 allocation of the Ministry is lower than the amount spent two years earlier by Rs 30,408 crore; the reduction is mainly due to a cut in PMAY-U by Rs 34,860 crore.  The 2021-22 spending on PMAY-U is significantly higher than the earlier years (and 7.5 times the budget estimate for that year).  See Page 5 for a detailed discussion on PMAY-U.  Deendayal Antyodaya Yojana-National Urban Livelihood Mission (DAY-NULM) has been allocated a token amount of Rs 10 lakh, compared to Rs 550 crore in 2022-23 revised estimate; this was also 39% lower than the originally budgeted amount of Rs 900 crore in 2022-23.   
 

## Trends In Expenditure

During 2013-14 to 2023-24, the Ministry's expenditure 
has increased at an annual average rate of 22% (See 
Figure 2).  While allocation to the Ministry has been 
increasing, the Ministry has not been able to utilise all 
the funds allocated (See Figure 3).  The Standing 
Committee on Urban Development (2021) also 
highlighted this issue and recommended the Ministry to 
avoid such underutilisation of funds.3  Consistent 
underutilisation may affect progress of key schemes, as 
well as future allocation of funds.    

Note: For the years 2012-13 till 2015-16, the figures are a 
combination of the erstwhile Ministry of Housing and Urban Poverty 
Alleviation, and the Ministry of Urban Development.  Values for 
2022-23 and 2023-24 are Revised and Budget Estimates respectively.  
All other figures are Actuals. 
Sources: Demand for Grants of Ministry of Housing and Urban 
Poverty Alleviation, and the Ministry of Urban Development from 
2011-12 to 2015-16; Demand for Grants of Ministry of Housing and 
Urban Affairs from 2013-14 to 2023-24; PRS. 

In 2016-17, the actual expenditure on metro projects, 
AMRUT, and Smart Cities Mission were higher than 
the budget estimates.  Further, in 2021-22 the actual 
expenditure on PMAY-U was 650% higher than the 
estimates (Budget Estimates- Rs 8,000 crore and 
Actuals- Rs 59,963 crore).     

Note: For the years 2012-13 till 2015-16, the figures are a 
combination of the erstwhile Ministry of Housing and Urban Poverty 
Alleviation, and the Ministry of Urban Development.   
Sources: Demand for Grants (2012-13 to 2023-24), Ministry of 
Housing and Urban Affairs; PRS. 

 

## Financing Required

Urban infrastructure projects tend to be capital intensive and not only require upfront capital investment but also annually recurring operations and maintenance expenditures.  With the current rate of urbanisation, the High-Powered Expert Committee (HPEC) for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031.4  As per their framework, the investment in urban infrastructure should increase from 0.7% of GDP in 2011-12 to 1.1% of GDP by 2031-32. In 2021-22, total expenditure on urban development by states and centre is estimated to be 0.7% of GDP.5,6 The Ministry of Finance (2017) had noted that only budgetary outlays will not be enough to cater the growing demands on local governments for improving their infrastructure.7  Allocation by the central government will have to be supported with other sources of financing to meet the funding gap. There have been attempts to explore alternative measures for meeting expenditure requirements. Schemes such as Smart Cities Mission, AMRUT seek to meet their financing requirements through a mix of sources such as municipal bonds and public private partnership.  The Ministry of Housing and Urban Affairs also provides financial incentives to ULBs for issuance of municipal bonds.8  The Standing Committee on Housing and Urban Affairs (2022) noted that some municipal corporations like Lucknow and Ghaziabad have undergone credit rating evaluation and have successfully raised funds from the market.9   

## Several Cities Not Credit Worthy

One of the reforms under AMRUT is to have credit ratings for cities.  Credit rating is a pre-requisite for ULBs to raise money from the market and financial institutions.10  The Ministry (2018) noted that the municipal bond market has great potential to fulfil the financial requirements of cities.10  However, it remains untapped.  As of December 2022, credit rating work has been completed in 470 cities and 164 cities (35%) have received investible credit rating (enables ULBs to float municipal bonds).11 

## High Reliance On Government Transfers

ULBs in India are amongst the weakest globally in terms of fiscal autonomy with state government control on their authority to levy taxes.12  The 74th Constitutional Amendment allows state governments to authorise ULBs to levy, collect and appropriate certain taxes, duties, tolls and fees.  Such funds collected by the state government must be assigned to ULBs.  States are also required to constitute State Finance Commissions (SFCs) to recommend devolution of tax revenues and grants-in-aids to ULBs.13  However, RBI (2022) noted that transfer of revenue collecting powers from states to ULBs has been limited.12  Sources of revenue for ULBs include user fees, property sales, and licenses and permits.  The share of own revenue (tax 

and non-tax) in total revenue of ULBs has declined 
over time indicating fiscal dependency on government 
transfers.12  With GST subsuming certain taxes earlier 
levied by ULBs (such as octroi tax, local body tax), 
there is greater dependence on transfers.  Property tax 
remains the only major tax source for ULBs.  Among 
the BRICS nations, local governments in Brazil and 
Russia mostly rely on government grants while those in 
China and South Africa are less dependent on transfers 
for their finances.12  

## Sfcs And Ulbs

Article 243I of the Constitution requires the state governments to appoint SFC from 1994 after every five years.14  The 15th Finance Commission observed that most state governments did not constitute SFCs in time and have not given due importance to the recommendations of the SFCs.15  In states where SFCs have recommended devolution to ULBs, there have been variations among states.16  For instance, 4th SFC of Karnataka recommended 10.7 of the divisible pool for ULBs while the 5th SFC of Kerala recommended 5.5% and 1% by the 4th SFC of West Bengal.    

Total own revenue 
Year 
Total Municipal Expenditure  
Share of own revenue in total expenditure 
2010-11 
64,193 
37,304 
58% 
2011-12 
70,380 
42,633 
61% 
2012-13 
82,702 
52,543 
64% 
2013-14 
93,298 
58,249 
62% 
2014-15 
1,06,917 
63,418 
59% 
2015-16 
1,18,938 
70,223 
59% 
2016-17 
1,24,007 
72,067 
58% 
2017-18 
1,32,553 
73,331 
55% 

Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

 
 
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

## Low Property Tax Collection

Property tax for local governments is one of the most important sources for raising revenue globally (See Figure 7).12  In India it was around 60% of the municipal tax revenue in 2017-18.16  Compared to other countries, property tax collection in India is much lower due to several reasons such as property undervaluation and ineffective administration.  Smaller municipal corporations, lack institutional capacity to undertake reforms to increase property tax collection and may require state government's assistance.12  For larger corporations, expansion of tax base and increasing efficiency of tax collection can be done through use of technologies such as satellite photography.12 The 15th Finance Commission (2021-26) has recommended grants worth Rs 1.21 lakh crore over five years for urban local bodies.15  To receive grants from the year 2022-23 onwards, states will need to show consistent improvement in property tax collection.  To meet the eligibility criteria, the property tax in the previous year should grow in tandem with the average growth rate of the state's own GSDP in the most recent five years.     
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS. 

Sources: World Bank; PRS. 

## Absence Of Financial Transparency In Ulbs

RBI (2022) observed that the balance sheets of most 
municipalities in India are not publicly available and 
many of them continue to follow cash accounting 
system.12  Municipal laws do not prescribe any uniform 
accounting standards to be followed, resulting 
municipal accounts incomparable across states and 
within states.12  In order to ensure correct, complete, 
and accurate record keeping of municipal transactions 
and to produce financial reports, a Task Force for ULBs 
was constituted by Comptroller and Auditor General of 
India (CAG) in February 2022, based on 
recommendations of the 11th Finance Commission.12  
The Task Force recommended an accounting system 
which led to the National Municipal Accounts Manual 
(NMAM) in December 2004.  RBI noted that only in 9 
of the 14 states (for which information pertaining to 
adoption of State municipal accounts manual is 
available in the CAG reports), a municipal accounts 
manual has been approved by the respective state 
government.12  Thus, there is a need to implement a 
uniform accounting framework across states.12   

## Capacity For Municipal Governance

ULBs play a key role in city governance by providing 
essential services like housing, water, sanitation, 
electricity, and transportation.  The HPEC for 
Estimating the Investment Requirements for Urban 
Infrastructure Services (2011) had noted that the state 
of service delivery in Indian cities and towns is 
inadequate compared to desirable levels.  The Standing 
Committee on Urban Development (2021) highlighted 
that while ULBs have done reasonably well in 
implementing targeted schemes like SBM-U, they have 
not been able to implement schemes like Smart Cities 
Mission where most planning decisions are left to 
them.3  The Committee highlighted that ULBs are not 
ready to take up such projects like Smart Cities 
Mission.       

## Ulbs Not Empowered

While the Ministry has introduced several schemes for 
improving service delivery such as Smart Cities 
Mission, and PMAY-U, the quality of such services 
still remains inadequate.  One of the key reasons behind 
such state of affairs may be lack of capacity of ULBs.  
The 74th Constitutional Amendment allowed state 
governments to devolve certain functions relating to 

urban development (such as urban sanitation, water supply, and roads and bridges) to ULBs.17  HPEC 
(2011) noted that the Amendment left it to the discretion of the state legislature to devolve these functions to ULBs.4  It had observed that states have only partially complied with devolution.   
For instance, the CAG (2020 and 2021) noted that Karnataka and Rajasthan had transferred 17 and 16 functions out of 18 functions (specified in the 12th Schedule) respectively.18,19  In Karnataka, of the functions devolved, ULBs had no role in urban planning and slum improvement which are functions to be devolved to them.  For functions like water supply, public health, and urban amenities, ULBs had either a minimal role or overlapping jurisdictions with other agencies.  In Rajasthan, ULBs had a minimal role or overlapping jurisdictions for water supply, urban planning, roads and bridges, and public health sanitation.  The CAG recommended respective state governments to ensure that ULBs have adequate degree of autonomy with respect to functions assigned to it. 

## Housing Pmay-U

The central government had launched PMAY-U in June 2015 to provide 'housing for all' within urban areas. The scheme was earlier applicable till March 31, 2022. In August 2022, the scheme was extended up to December 31, 2024, due to some states submitting proposals for constructing houses in the last two years of the scheme.  In 2023-24, PMAY-U has been allocated Rs 25,103 crore (highest allocation of the Ministry) which is a decrease of 12.6% from 2022-23 revised estimates.  In 2021-22, the actual allocation towards PMAY-U was Rs 59,963 crore, which is an increase of 650% from 2021-22 budget estimates (Rs 8,000 crore).  This is on account of a sharp increase of 4,447% of expenditure (Rs 33,329 crore) on 'other items of central component' which includes establishment expenses, capacity building, and other expenses for PMAY-U. The scheme comprises four components: (i) in-situ rehabilitation of existing slum dwellers (using the existing land under slums to provide houses to slum dwellers) through private participation, (ii) credit linked subsidy scheme (CLSS) for Economically Weaker Sections (EWS), Lower Income Groups (LIG), and middle-income group (MIG), (iii) affordable housing in partnership (AHP), and (iv) subsidy for beneficiary-led individual house construction.  
Several houses grounded but not completed: The Standing Committee on Housing and Urban Affairs (2022), while analysing the progress of PMAY-U, observed that no strict timelines have been provided for the completion of houses.9  In some states, even the land required for construction has not been acquired. The number of houses grounded for construction (construction going on) are more than the completed houses.  For instance, in Andhra Pradesh, as on January 23, 2023, out of 21 lakh sanctioned houses, 19 lakh houses were grounded (93%), and about 7 lakh houses 

were completed/ delivered (32%).20  In Maharashtra. 
out of 15 lakh sanctioned houses, 10 lakh (69%) were 
grounded and 7 lakh (49%) were completed/ delivered.  
It recommended the Ministry to provide strict timelines 
for completion of under construction houses.  

Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS.  

Poor quality of houses: As per PMAY-U guidelines, 
all houses constructed under slum rehabilitation and 
AHP components, should have basic civic 
infrastructure like water, sanitation, sewerage, and 
electricity.21  ULBs should ensure that individual 
houses under CLSS and beneficiary-led verticals have 
access to basic services.  The Standing Committee on 
Housing and Urban Affairs (2022) highlighted that 
several houses constructed under PMAY-U are not in 
liveable condition with windows and doors missing.9  
As a response to houses not being liveable, Ministry 
stated that about 96,000 houses under the erstwhile 
Jawaharlal Nehru National Urban Renewal Mission 
(JnNURM) are lying vacant due to which they are in a 
bad shape.31  The Ministry has requested respective 
states/UTs to repair these houses and allot them to 
beneficiaries or convert them into Affordable Rental 
Housing Complexes (ARHCs) for rental purposes for 
urban migrants/poor.  The CAG (2022) while auditing 
houses constructed under PMAY(U) in Karnataka 
observed that some houses constructed under AHP 
vertical were unoccupied due to lack of facilities such 
as water, sewerage, and electricity.22  This was due to 
non-release of funds by the concerned ULBs.  

## Implementation Issues In Allocating Houses

PMAY-U guidelines prescribe certain standards to identify eligible beneficiaries such as a beneficiary family should comprise husband, wife and unmarried sons and/ or unmarried daughters.23  Further, the family should not own a pucca house. There have been some irregularities in identification of beneficiaries.  For instance, in Madhya Pradesh 16 beneficiaries who were provided the benefit of PMAY-U were not approved by the District Collector.24  The beneficiaries later returned the grant amount given to them to the concerned ULB.  Further, the CAG (2022) noted several issues related to allocation of beneficiaries under PMAY-U in Karnataka which include (i) beneficiaries getting multiple benefits under same/ different verticals, and (ii) benefits extended to ineligible people.25   

## Urban Transportation Fragmented Approach To Urban Transport

The Ministry of Housing and Urban Affairs is the nodal ministry for looking after urban transport at the central level.  As urban development being a state subject, the primary responsibility for urban transport infrastructure and service delivery lies with state governments and local bodies.      
The National Transport Development Policy Committee (NTDPC), 2013 observed that India's transport policy is fragmented between different level of government.26  Such an arrangement adversely affects intermodal planning and execution at all levels of government and has led to several inefficiencies. These include: (i) rail networks not linking with road networks for last-mile delivery of goods, (ii) bus and metro systems in urban areas not exchanging people, and (iii) ports not always having infrastructure for evacuation of goods.  At the city level, several agencies are involved in managing components of urban transportation.27  For instance, Mumbai's transportation system is overseen by a combination of municipal/metropolitan authorities, state and central government agencies.  For instance, the road system is managed by multiple agencies including the Mumbai Metropolitan Development Authority and Maharashtra State Road Development Corporation.  The lack of an integrated approach to urban transport also affects prospects for coordinated land use planning. The National Urban Transport Policy, 2006, noted that the current system governing transport does not provide for coordination among agencies.28  It recommended setting up Unified Metropolitan Transport Authority (UMTA) in all million-plus cities to facilitate coordinated planning and implementation of urban transport programs and projects, and integrated management of urban transport systems.  The Metro Rail Policy, 2017 provides that state governments should constitute UMTAs as statutory bodies.29  The Standing Committee on Housing and Urban Affairs (2022) had noted that only a few cities such as Bengaluru, Kochi, Pune, and Chennai have set up their respective UMTAs.30   

## Urban Transport Focused On Metro Projects

Investment in metro projects in cities forms one of the biggest expenditures made by the Ministry on urban transport.  Some of the major metro projects include Chennai, Delhi, Bangalore, and Mumbai metros. Investments in these projects are made in various forms including grants, equity investments, debt, and passthrough assistance (grants given to the government which can be awarded to other organisations) for externally aided projects.  In 2023-24, metro projects have been allocated Rs 23,175 crore, an increase of 13.6% over the revised estimates of 2022-23.     
Need to enhance revenue from non- fare sources: 
Sources of revenue for metro projects are of two typesfare box (sale of tickets) and non-fare box (such as commercial development of land, advertising revenues).  The Metro Rail Policy, 2017 provides that the Detailed Project Report for metro projects must provide for enhancing non-fare box revenue.29  The respective state government should provide a policy framework and required permissions, and licenses for enabling metro projects to explore various types of nonfare box revenue.29 

A major portion of the total revenue generated by 
Indian metro rail systems consists of fare revenue.  For 
instance, the proportion of total revenue generated from 
fare box by Delhi Metro ranged from 24% in 2005-16 
to 57% in 2019-20.  For Kochi Metro it was 78% in 
2017-18 and 60% in 2019-20.30  Mumbai Metro Line 1 
generated 86-89% of its revenue from fare box since 
2014-15 from fares (barring COVID-19 year).30  
According to the Standing Committee on Housing and 
Urban Affairs (2022), maximising revenue from fare 
collection may negatively impact ridership and it may 
prevent metro from becoming a mass transportation 
system.30  It recommended the Ministry to persuade 
metro projects to explore avenues of non-fare box 
collection.  Property development and setting up 
commercial establishments at stations has been a key 
source of revenue for metro projects.30  Notable 
examples of using property development and 
commercial establishments for generating revenue are 
Hong Kong and Tokyo.29      

In the case of Delhi Metro, the Committee (2022) noted 
that it is incurring net losses despite meeting targets for 
average daily earnings required for breakeven and 
increase in average daily ridership (See Figure 9).30  It 
recommended the Delhi Metro to enhance non-fare 
revenue.  The Ministry informed the Committee (2022) 
that it has requested metro rail corporations to increase 
revenue from non-fare sources.31  It also informed the 
Committee that Delhi Metro has taken and is planning 
several measures which include: (i) co-branding of 
metro stations, (ii) licensing of spaces at stations for 
shops, ATMs, kiosks, offices, and (iii) exploring digital 
advertisement panels inside tunnels.31      

 
Sources: Report No. 12: Implementation of Metro Rail Projects - An Appraisal, Standing Committee on Housing and Urban Affairs, April 7, 2022; PRS.       

Highly capital-intensive nature of Metro: Metro 
projects are highly capital intensive in nature.  Capital 
expenditure on metro projects in 2023-24 is estimated 
to be Rs 23,056 crore which is 89% of the total capital 
expenditure by the Ministry (Rs 25,997 crore).  The per 
km cost of constructing metro ranges from Rs 37 crore 
to Rs 1,126 crore depending on the metro system.30  
While observing the losses made by Delhi Metro, the 
Standing Committee on Housing and Urban Affairs 
(2022) noted that metro projects should not be assessed 
only on economic considerations given the benefits it 
has such as reducing pollution and traffic, and 
providing affordable transport solutions.30     

The Metro Policy 2017, notes that before setting up metro, an unbiased analysis of different alternatives should be carried out.29  Cities with a well spread-out spatial pattern may not have sufficient number of corridors with adequate density to justify investments in metro.  Cities with a linear spatial pattern are more suited for metro projects.  Indian cities have developed in a way that allow neighbourhoods to provide for residences, workplaces, and social and educational facilities.27  This results in minimising trip lengths leading to less dependency on motorised urban transport.27  The average trip length in medium and small Indian cities is less than 5 km making nonmotorised transport the preferred mode of commute. Metro rail systems are efficient when the average trip distance is greater than 12 km.27  The Standing Committee on Housing and Urban Affairs (2022) recommended the Ministry to promote MetroLite and MetroNeo systems in smaller cities due to their lesser capital, operation, and maintenance costs.30  These systems can be constructed at about 25-40% cost of regular metro.  Further, it recommended the Ministry to approve and fund only those projects that are using the most feasible metro technology (such as MetroLite and MetroNeo) for a city taking into account its population and traffic needs.30 NTDPC recommended that metro rail projects should initially be limited to cities with population more than five million.  These cities should be able to cover all costs through user charges or fiscal costs.  Further it recommended that Indian cities should focus on improving their existing bus systems, adding bus rapid transit systems, and improving non-motorised transport. However, over the past few years, metro projects have expanded from the larger metropolises such as Delhi and Mumbai to other relatively smaller cities such as Kochi, Lucknow, Bhopal, Jaipur, and Indore.   
Sources: Report No. 12: Implementation of Metro Rail Projects - An Appraisal, Standing Committee on Housing and Urban Affairs, April 7, 2022; PRS.       

## Basic Services Atal Mission For Rejuvenation And Urban Transformation (Amrut)

AMRUT, launched in June 2015 in select 500 cities, seeks to focus on developing basic infrastructure related to several services such as water supply, sewerage, and non-motorised urban transport.32  AMRUT 2.0 was launched in October 2021 for five years (2021-22 to 

2025-26).  AMRUT 2.0 seeks to provide water supply 
to households.  In 2023-24, AMRUT has been allocated 
Rs 8,000 crore, an increase of 23% over 2022-23 
revised estimates.  

Irregularities in implementation: The Standing 
Committee on Urban Development (2019, 2020) has 
highlighted several irregularities with the scheme.  For 
instance, tenders for projects being continuously 
awarded to a single person, unnecessary projects being 
taken up, and tenders being awarded at high cost when 
cheaper options were available.3,33  In 2020, the 
Committee noted that implementation of projects has 
been below target.  As of December 2022, 134 lakh 
(96%) water tap connections and 102 lakh (70%) sewer 
connections have been provided against the target of 
139 lakh and 145 lakh respectively.32  

Table 4: Allocation to AMRUT (in Rs crore) 
Year 
Budget 
Actuals 
Utilised 
2015-16 
3,919 
2,702 
69% 
2016-17 
4,080 
4,864 
119% 
2017-18 
5,000 
4,936 
99% 
2018-19 
6,000 
6,183 
103% 
2019-20 
7,300 
6,391 
88% 
2020-21 
7,300 
6,448 
88% 
2021-22 
7,300 
7,280 
100% 
2022-23 
7,300 
6,500 
89% 
2023-24 
8,000 
- 
- 
Total 
56,199 
45,304 
81% 

Note: Actuals for 2022-23 are Revised Estimates. Sources: Demand for Grants, Ministry of Housing and Urban Affairs (2015-16 to 2023-24); PRS. 

Table 5: Progress under AMRUT (as of December 2022) 
 
Total 
Completed 
% 
Ongoing 
% 
Projects 
5,873 
4,676 
80 
1,197 
20 
Cost (Rs crore) 
82,222 
32,793 
40 
49,430 
60 

Sources: Unstarred Question No. 1424, Lok Sabha, Ministry of Housing and Urban Affairs, December 15, 2022; PRS. 

## Smart Cities Mission

The Smart Cities Mission, launched in June 2015 for 
five years, seeks to promote 100 smart cities that 
provide core infrastructure (such as water and 
electricity supply, sanitation, and public transport).  The 
scheme has been extended to June 2023.34  In 2023-24, 
the Mission has been allocated Rs 8,000 crore, a 
decrease of 9% over 2022-23 revised estimates (Rs 
8,800 crore).  The Standing Committee on Urban 
Development (2021) noted that the amount allocated to 
the Smart Cities Mission has been less than the 
proposed amount (See Table 6). 

Table 6:  Budgeted allocation less than proposed amount for Smart Cities Mission (in Rs crore) 
Year 
Proposed 
Budgeted  
2017-18 
13,648 
4,000 
2018-19 
9,810 
6,169 
2019-20 
13,971 
6,450 
2020-21 
13,543 
6,450 
2021-22 
10,000 
6,450 

Sources: Report No.5: Ministry of Housing and Urban Affairs, Demand for Grants 2021-22, Standing Committee on Urban Development, March 8, 2021; PRS.  
Capacity of ULBs to implement the Mission: Each smart city has a Special Purpose Vehicle (SPV), responsible for the implementation of the Mission at the city level.  ULBs are responsible for planning and implementing the projects and also providing funds (alongside the central government).  The Standing Committee on Urban Development (2021) observed that economically backward states have not been able to provide their share of financial contribution under the Mission.3  The Committee also highlighted that ULBs have not been able to implement schemes like Smart Cities Mission where everything is left to them (such as making plan, choosing projects).  It remarked that ULBs may not be ready to take up such Missions. This may be due to the limited technical and financial capacity of ULBs, as discussed on Page 3 and 4.       
Deficiencies in implementation: Under the Mission, multiple projects related to infrastructure and service delivery such as sanitation, water supply, are taken up in the select cities.  Seven years since the launch of the Mission, 33% of projects are still ongoing (See Table 7).  The Standing Committee on Urban Development (2021) also highlighted the slow pace of project completion.  It recommended the Ministry to ensure timely completion to avoid cost overruns.  The Committee also highlighted several irregularities in implementation of Smart Cities works which include: (i) frequent dropping of projects after finalising proposals, (ii) redoing of the same work again, and (iii) project costs being higher than market rate.  Further, the Committee observed that the Geospatial Management Information System (real time monitoring system) has not been able to adequately monitor projects.   

| Total    | Completed    |   %  | Ongoing    |   %  |          |
|----------|--------------|------|------------|------|----------|
| Projects |              |      |            |      |          |
| 7,804    | 5,322        |  68  | 2,558      |  33  |          |
| 1,81,322 | 1,00,273     |  55  | 82,526     |  46  | Cost (Rs |
| crore)   |              |      |            |      |          |

Sources: Smart Cities Mission Dashboard (as on January 30, 2023), as accessed on February 4, 2023; PRS.   

## Swachh Bharat Mission - Urban (Sbm-U)

SBM-U has been allocated Rs 5,000 crore in 2023-24, an increase of 150% over 2022-23 revised estimates. Launched in October 2014, SBM-U seeks to: (i) make all urban areas open defecation free (ODF), and (ii) achieve 100% scientific management of municipal solid waste (MSW).  SBM-U 2.0 was launched in October 2021.  It focuses on source segregation of solid waste at source, scientific processing of waste, and improving dumpsites for solid waste management.   
Progress may not be adequate: In 2019, all urban areas were declared open defecation free (ODF).35 
However, according to the National Family Health Survey 5 (2019-21), 19.5% of urban households do not have access to an improved sanitation facility (includes flush to piped sewer system, flush to septic tank, twin pit/composting toilet, which is not shared with any other household).36  Under the Mission, individual 

household and community toilets are constructed across 
states.  However, the construction varies across states.  
In some states like Maharashtra and Gujarat, targets 
have been overshot, and some such as West Bengal and 
Meghalaya where the targets have not been met.  For 
instance, as on January 25, 2023, in West Bengal 55% 
of individual household latrines have been constructed 
and 22% public toilets have been constructed (See 
Table 8 in the Annexure for state wise details on 
number of toilets constructed). 

Sources: SBM (U) Dashboard, Ministry of Housing and Urban Affairs, as accessed on January 25, 2023; PRS.   

Underutilisation of funds for inducing behavioural 
change: Apart from constructing toilets, SBM-U also 
focuses on behavioural change to eradicate open 
defecation, and spreading awareness around hygiene 
practices, proper use and maintenance of toilets etc.37  
Accordingly funds are allocated for advertisement and 
publicity of the mission.  However, the Standing 
Committee on Housing and Urban Affairs (2022) 
highlighted that there has been underutilisation of funds 
for advertising and publicity (See Figure 12).38  
Advertising and publicity are key factors for inducing 
behavioural change.  In 2020-21 and 2021-22, almost 
none of the funds allocated were utilised.  The Standing 
Committee on Housing and Urban Affairs (2022) noted 
that declaring cities as ODF is not enough and the 
Ministry must persist in spreading awareness about the 
Mission.9  The Ministry highlighted that such 
underutilisation of funds is due to the Ministry not 
receiving demand proposals from states for advertising 
and publicity. 

Note: Data for 2021-22 is as on December 31, 2021. 
Sources: Report No. 12: Ministry of Housing and Urban Affairs 
Demand for Grants (2022-23), Standing Committee on Housing and 
Urban Affairs, March 24, 2022; PRS.    

 

|                   |                   |                       |
|-------------------|-------------------|-----------------------|
| State/UT          | Target            | Constructed           |
|                   |                   |                       |
| Individual        | Community and     | Individual            |
| Household         |                   |                       |
| Community         |                   |                       |
| and Public        |                   |                       |
| Individual        |                   |                       |
| Household         |                   |                       |
| Community         |                   |                       |
| and Public        | household latrine | public toilets target |
| Latrine           | Toilets           | Latrine               |
| 336               | 126               | 336                   |
| Nicobar Islands   |                   |                       |
| Andhra Pradesh    | 1,93,426          | 21,464                |
| Arunachal Pradesh | 12,252            | 387                   |
| Assam             | 75,720            | 3,554                 |
| Bihar             | 3,83,079          | 26,439                |
| Chandigarh        | 4,282             | 976                   |
| Chhattisgarh      | 3,00,000          | 17,796                |
| Delhi             | 5,000             | 11,138                |
| Goa               | 8,020             | 507                   |
| Gujarat           | 4,06,388          | 31,010                |
| Haryana           | 71,000            | 10,393                |
| Himachal Pradesh  | 11,266            | 876                   |
| 59,600            | 3,585             | 51,246                |
| Kashmir           |                   |                       |
| Jharkhand         | 1,61,713          | 12,366                |
| Karnataka         | 3,50,000          | 34,839                |
| Kerala            | 29,578            | 4,801                 |
| Ladakh            | 400               | 194                   |
| Madhya Pradesh    | 5,12,380          | 40,230                |
| Maharashtra       | 6,29,819          | 59,706                |
| Manipur           | 43,644            | 620                   |
| Meghalaya         | 5,066             | 362                   |
| Mizoram           | 16,441            | 491                   |
| Nagaland          | 23,427            | 478                   |
| Odisha            | 1,32,509          | 17,800                |
| Puducherry        | 5,681             | 1,204                 |
| Punjab            | 1,02,000          | 10,924                |
| Rajasthan         | 3,61,753          | 26,364                |
| Sikkim            | 1,587             | 142                   |
| Tamil Nadu        | 4,37,543          | 59,921                |
| Telangana         | 1,63,508          | 15,543                |
| Tripura           | 19,464            | 586                   |
| Uttar Pradesh     | 8,28,237          | 63,451                |
| Uttarakhand       | 27,640            | 2,611                 |
| West Bengal       | 5,15,000          | 26,484                |
| Total             | 58,97,759         | 5,07,368              |

Sources: Swachh Bharat Mission (Urban) Dashboard, as accessed on January 25, 2023; PRS. 

 

Table 9: Progress of PMAY-U as on January 23, 2023 
State/ UT 
Physical Progress of Houses 
Financial Progress (in Rs crore) 
 
Sanctioned 
Grounded*(under 
Completed/ Delivered* 
Investment 
Central Assistance 
construction) 


Sanctioned 
Released 
378 
378 
47 
96 
6 
2 
Andaman and Nicobar Island Andhra Pradesh 
20,74,765 
19,25,908 
6,67,334 
89,212 
31,622 
17,803 
Arunachal Pradesh 
9,002 
8,570 
5,610 
511 
190 
146 
Assam 
1,61,476 
1,50,799 
71,466 
4,931 
2,446 
1,314 
Bihar 
3,27,315 
3,09,603 
1,01,567 
18,540 
5,153 
2,571 
Chandigarh 
1,271 
1,202 
1,202 
262 
29 
28 
Chhattisgarh 
3,06,034 
2,61,890 
1,60,957 
13,833 
4,850 
3,513 
Delhi 
30,194 
28,709 
28,683 
5,645 
697 
660 
10,480 
9,852 
8,368 
941 
222 
192 
Dadra and Nagar Haveli and Daman and Diu Goa 
3,150 
2,995 
2,987 
692 
75 
71 
Gujarat 
10,60,376 
9,40,724 
7,92,574 
1,05,706 
21,913 
17,126 
Haryana 
1,66,671 
91,982 
58,697 
15,750 
2,954 
1,426 
Himachal Pradesh 
13,249 
12,880 
8,863 
910 
241 
179 
Jammu and Kashmir 
49,146 
47,376 
16,673 
2,695 
756 
369 
Jharkhand 
2,34,369 
2,08,787 
1,17,559 
11,646 
3,687 
2,535 
Karnataka 
7,06,320 
5,72,101 
2,94,209 
51,984 
11,588 
6,257 
Kerala 
1,66,661 
1,34,089 
1,06,998 
8,928 
2,760 
1,936 
Ladakh 
1,366 
1,015 
647 
68 
31 
22 
Madhya Pradesh 
9,60,256 
9,05,806 
5,93,867 
54,059 
15,823 
12,894 
Maharashtra 
15,11,989 
10,38,133 
7,34,673 
1,88,340 
27,691 
16,356 
Manipur 
56,037 
47,352 
9,427 
1,446 
841 
436 
Meghalaya 
4,759 
3,780 
1,101 
187 
72 
30 
Mizoram 
40,756 
38,710 
6,102 
950 
625 
206 
Nagaland 
32,335 
31,880 
11,339 
1,050 
511 
307 
Odisha 
2,13,845 
1,70,518 
1,19,377 
9,874 
3,344 
2,091 
Puducherry  
16,394 
16,036 
7,662 
948 
258 
173 
Punjab 
1,32,895 
1,05,882 
63,851 
9,240 
2,339 
1,546 
Rajasthan 
2,76,746 
2,00,245 
1,58,326 
23,429 
5,263 
3,780 
Sikkim 
704 
592 
209 
35 
12 
7 
Tamil Nadu 
6,88,854 
6,32,765 
4,93,176 
48,883 
11,253 
8,885 
Telangana 
2,49,465 
2,40,454 
2,18,362 
30,701 
4,466 
3,146 
Tripura 
94,162 
82,643 
63,038 
2,988 
1,514 
1,146 
Uttar Pradesh 
16,89,673 
15,39,266 
11,99,343 
83,665 
26,638 
21,018 
Uttarakhand 
62,762 
48,453 
27,292 
4,885 
1,159 
732 
West Bengal 
6,91,146 
5,42,425 
3,09,258 
38,339 
11,094 
6,627 
Total 
120 lakh** 
108 lakh* 
68 lakh* 
8 lakh crore. 
2 lakh crore 
1 lakh crore 

Note: * includes completed (3.41 lakh)/ grounded (4.01 lakh) houses of Jawaharlal Nehru National Urban Renewal Mission during mission period; ** Out of 122.69 lakh houses sanctioned as on March JNU31, 2022, 2.24 lakh non-starter houses have been curtailed by some sates against which States to put up new proposals by March 2023. Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS. 

## Table 10: Status Of Devolution Of Functions (As Of March 2020)

| State/UT                     | No. of functions    | State/UT       | No. of functions    |
|------------------------------|---------------------|----------------|---------------------|
| devolved                     | devolved            |                |                     |
| Andhra Pradesh               | 17                  | Madhya Pradesh | 18                  |
| Arunachal Pradesh            | 13                  | *              |                     |
| Assam                        | 12                  | Manipur        | 07                  |
| Bihar                        | 7                   | Meghalaya      | 16                  |
| Chandigarh                   | 13                  | *              |                     |
| Chhattisgarh                 | 18                  | Nagaland       | 03                  |
| Dadra and Nagar Haveli       | 11                  | Odisha         | 18                  |
| Daman and Diu                | 16                  | Puducherry     | 17                  |
| Delhi                        | 13                  | Punjab         | 18                  |
| Goa                          | 10                  | *              |                     |
| Gujarat                      | 16                  | Sikkim         | 6                   |
| Haryana                      | 18                  | Tamil Nadu     | 17                  |
| Himachal Pradesh             | 16                  | Telangana      | 18                  |
| Jammu and Kashmir and Ladakh | 18                  | Tripura        | 15                  |
| Jharkhand                    | 14                  | Uttar Pradesh  | 8                   |
| Karnataka                    | 17                  | Uttarakhand    | 14                  |
| Kerala                       | 18                  | West Bengal    | 16                  |

Note: * as per the Reform Appraisal Reports Jawaharlal Nehru National Urban Renewal Mission, March 2014. Sources: Unstarred Question No. 4211, Lok Sabha, Ministry Housing and Urban Affairs, March 19, 2020; PRS. 

 
 
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