Local government in India has a long history as a service delivery vehicle, but not as a vehicle for local level accountability. As a result elected local governments are not particularly accountable to their communities as they have a very limited set of powers and functions, in most cases. States still remain powerful, both in law and in the number of agencies they control at local level and most attempts to change have been hamstrung by the voluntary nature of the implementation of the 74th CAA. The net result is that urban areas continue to be governed by a plethora of agencies, with weak coordination and very little accountability. Coupled with this, a variety of implementation issues have led to fragmentation of service delivery institutions at the state and local level The constitutional and legal authority of the Government of India is limited only to Delhi and other Union Territories and to subjects, which state legislatures authorize the Union to legislate. Within this framework the Government of India through the Ministry of Urban Development and the Ministry of Urban Employment and Poverty Alleviation has been playing a significant Policy and Guidance role. Thereby national policy issues are decided by the Government of India which also allocates resources to the state governments through various centrally sponsored schemes, assists in making available debt finance through national financial institutions such as the Housing and Urban Development Corporation and the Life Insurance Corporation and supports local and state governments in accessing various external assistance programmes for housing and urban development in the country.
Despite increasing financial support by the central government, the quality of services in cities is declining. In order to remove the key roadblocks in improving service delivery, the central government has formulated the JNNURM for large cities. The outline of the new fiscal and policy support environment being contemplated at the national level. This paper analyses the key institutional challenges faced in delivering urban services in India and discusses the new approach adopted by the Government of India through the JNNURM.
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