Launched in December 2005 as a Mission under Ministry of Urban Development (MoUD), JNNURM provides funding packages to cities to pursue key economic growth and poverty reduction reforms. The financial incentives encourage cities and states to implement reforms that link the following sectors:

The CDP exercise methodologically links these sectors through community based planning that seeks input from all relevant stakeholders and then compares that input against collected, analytical data. As a result, CDPs offer an ideal forum to integrate socioeconomic, environmental and financial data with he public's views and interests.

JNNURM is India's response to the challenge of rapid urbanization: infrastructure and public services that under serve increasing populations; growing poverty; and city management that cannot cope with the quickly changing landscape. JNNURM adopts a comprehensive and inclusive a approach "to encourage reforms and fast track planned development of identified cities. Focus is on efficiency in urban infrastructure and service delivery mechanisms, community participation, and accountability of ULBs towards citizens. "JNNURM targets 63 Indian cities with a million plus population, as well as all state capitals, and cities with important religious, historical or tourist aspects. During the next sevens years JNNURM will disburse approximately Rs.50,000 crores ($11bln) to 63 qualifying cities for implementing CDP projects. JNNURM funds a portion of the proposed CDP project; significant financial commitments including market borrowing.

All JNNURM founds are contingent upon implementing urban reforms and approval of Detailed project Report (DPRs.) Each city department prepares DPRs outlining project costs and implementation strategies for the proposed CDP activities under their jurisdiction. A Monitoring & Sanctioning Committee oversees the approval and implementation process at both the state and central levels. Finally, a tripartite Memorandum of Agreement (MOA) details the responsibilities of JNNURM and the city and state governments.