State's choice: Reform or repent

MUMBAI: The UPA government seems to have adopted a carrot-and-stick policy for Maharashtra’s Democratic Front government vis-a-vis Mumbai’s makeover plans.

The Centre wants the state to pull up its socks and undertake a slew of administrative reforms, or face the consequence of losing out handsome allocations the state expects under the Rs 50,000-crore Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

At the inauguration of the phase I of the ambitious Mumbai metro project in Mumbai on Wednesday, Prime Minister Manmohan Singh minced no words calling for radical reforms in Mumbai’s civic governance. His Cabinet colleagues were even more forthright.

Urban development minister Jaipal Reddy went to the extent of accusing the state of having a “mental block” in scrapping the outdated Urban Land (Ceiling and Regulation) Act, 1976.

Mr Reddy also prescribed reforms in another archaic legal dispensation stalling Mumbai’s development, the Maharashtra Rent Control Act. Petroleum minister Murli Deora, who hails from Mumbai, also demanded taking the ULCRA off the road to pave the way for Mumbai’s development.

It may be recalled that the Maharashtra government had inked a memorandum of understanding (MoU) with the Centre a couple of months ago for phasing out the ULCRA in Mumbai, Thane, Pune, Nashik, and Nagpur in three years’ time.

This was done after the Centre categorically told CM Vilasrao Deshmukh to do away with the ULCRA, reform Rent Control Act, and rationalise stamp duty, for Mumbai to qualify for JNNURM funds.

Immediately after the signing of the MoU, Mantralaya officials went into an overdrive with a theory that the Centre has agreed to release funds for Mumbai under the JNNURM on the condition that the ULCRA would be phased out in three years.

The Mantralaya officials want the state to believe that the scrapping of ULCRA, reforms in the Rent Control Act, and rationalisation of stamp duty, have been made optional reforms under the JNNURM.

“Initially when the rough draft guidelines for JNNURM were released, these were mandatory reforms that all cities chosen tentatively for the mission were supposed to carry out if they wanted funds.

But later when the governments of Maharashtra and West Bengal protested, the Centre diluted these guidelines and included these in the optional category,” a senior bureaucrat associated with the Mumbai makeover plans told ET.

However, the Centre does not seem satisfied with the State’s plan to phase out ULCRA, if the harsh words used by Reddy in Mumbai on Wednesday are any indication. An urban development official in Mantralaya concurred.

“The Centre has not so far diluted its stand. At least, we do not have any such intimation. The Centre wants us to scrap the ULCRA rather than phasing it out if Mumbai wants funds under the JNNURM,” the official added.

The state government has submitted four proposals worth Rs 6,000 crore to the Centre for consideration under the JNNURM.

These include Rs 1,800-crore BRIMSTOWAD (BrihanMumbai Storm Water Drain) project, Rs 1,500-crore slum rehabilitation scheme, Rs 1,500-crore middle Vaitarana water supply works, and Rs 1,200-crore for cleaning up the Mithi.

Mumbai, however, did not figure on the first list of cities chosen under the JNNURM that was released by the Centre in April this year.