User should be ready to pay for public services: Pranab

NEW DELHI: Identifying resources crunch and funding for infrastructure projects as key challenge, Finance Minister Pranab Mukherjee said users have to be prepared to pay for public services as creating infrastructure will cost Rs 41,000 crore in the XII Plan period.

“There is an appetite for more funds in the programme with more cities wishful of being covered under Jawahar Lal Nehru Urban Renewable Mission (JNNURM). Rapid urbanisation has created more urban enclaves with legitimate aspirations for basic services of reasonable standard,” he said at a function on Friday to mark five years of the scheme.

He said local governments have to understand that the short-term discipline of belt tightening is a must to pay for long term improvements in services.

“The commitment to reforms by states and urban local bodies under this mission are in recognition of this need to change mind-sets,” he said. Funding under JNNURM is contingent to state government implementing certain reform measures such as lowering stamp duty on real estate to 5%.

The finance minister, however, did not commit to demand for more funds by the urban affairs ministry, and also reimbursement of Rs 2,100 crore it had spent on buying 15,000 low-floor buses to perk up auto sector during economic slowdown.

“We are told that this (amount spent on buying buses) will be adjusted against the allocated JNNURM funds which is not fair,” Urban Development Minister Jaipal Reddy said at the function and also asked for more funds for the scheme.

The finance minister said he was open to suggestion. He went on to say that in order to meet the huge requirement of funds and resources for JNNURM there is an urgent need to explore the possibilities of Public Private Partnership (PPP) with greater vigour and focus. He said that even though various financial institutions and some local bodies are coming forward to tackle this challenge yet state governments and cities must provide the enabling environment for the private sector to participate and for PPP to take roots in this sector.