Over the years, there has been a wide gap between the requirement and allocation of funds. The assistance provided by the Central government has been unevenly spread and has failed to bring about any noticeable improvement in urban infrastructure. Keeping in view the shortcomings in the existing programmes and the commitment given in the Common Minimum Programme of the UPA Government, the Central government has drawn up a comprehensive programme of urban renewal.

In this strategy, a two-track approach has been envisaged. In the first prong of the strategy, the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has been sanctioned to provide financial support of about Rs. 50,000 Crores to 63 cities for up gradation and improvement of infrastructure in a planned and integrated manner. The programme is phased over a period of seven years. The chosen cities comprise the State Capitals, cities with one million plus population and some selected cities of religious, tourist, cultural and heritage importance. It is expected that these cities will have a demonstration effect on others.

In the second prong of the strategy, the need for other cities and towns, which are not included in the mission, would be addressed through another scheme of assistance known as ‘Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) and Integrated Housing & Slum Development Programme (IHSDP).

The Government of India launched the JNNURM on 3rd December 2005. The mission aims to create ‘economically productive, efficient, equitable and responsive cities’. The main thrust of the mission is to:

• Integrated development of infrastructure services by providing adequate funds to meet the deficiencies in urban infrastructure services. This includes funding infrastructure projects relating to water supply and sanitation, sewerage, solid waste management, road network, urban transport, and redevelopment of old city areas. The programme lays special emphasis on urban renewal programme for the old city areas to reduce congestion. It also attempts to ensure planned development of cities including peri-urban areas, outgrowths and urban corridors leading to dispersed urbanisation.
• Provision of basic services to the urban poor by up scaling the delivery of civic amenities and provision of utilities. The emphasis is on universal access and includes security of tenure at affordable prices, improved housing, water supply and sanitation, and delivery of other existing services of the government for education, health and social security
• Adoption of wide ranging urban sector reforms, which will facilitate establishment of linkages between asset-creation and asset-management and ensure long-term project sustainability. The thrust is to ensure improvement in urban governance and service delivery so that ULBs become financially sound and sustainable for undertaking new programmes. A set of thirteen mandatory reforms at State and Central level and ten optional reforms at the level of State and local level is listed in the Toolkit. All the twenty-three reforms need to be implemented in the mission period. Cities have the freedom to opt for any two reforms from the optional category in each year of implementation of JNNURM.

The Toolkit (a complete document containing eligibility criteria, guidelines etc. Associated with JNNURM) prepared by the Government of India contains the outline of the JNNURM framework, methodology for preparation of CDPs, project proposals, and timeline for preparation of the Reform Agenda.