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Mainstream, VOL L No 13, March 17, 2012

JNNURM, Reforms and Lies

Tuesday 20 March 2012

by SHOBHA AGGARWAL

In December 2005 the Prime Minister had launched the flagship scheme, Jawaharlal Nehru National Urban Renewal Mission (JNNURM), with the stated objective of urban development. It is the biggest funded urban renewal mission ever undertaken in any country so far. The policy document clearly enunciates the mandatory reforms to be implemented by the States and civic agencies during 2005-12. To receive funds under the JNNURM the States and civic agencies have to sign a Memorandum of Agreement (MoA) clearly enunciating the time-frame within which the mandatory reforms would be achieved. One of the mandatory reforms under the JNNURM is of rental laws. The contribution from the Central Government constitutes 35 to 90 per cent of the total project cost while the remaining amount is to be borne by the State governments/ para-statal bodies. The Central Government alone had earmarked Rs 60,000 crores spread over a seven-year period to 31 States/Union Territories.

The JNNURM requires certain reforms to be undertaken by the States/cities in the area of rent control legislation, with the objective of having a system that balances the rights and obligations of landlords and tenants to encourage the construction and development of more housing stock, as well as promoting an efficient and robust rental/ tenancy market, so as to improve the availability of housing across all income categories. Details have been provided in the Model Rent Control Legislation, 1992 circulated by the Government of India (GoI) to all States/Union Territories.

How Rent Control Laws Ruin Cities

THE archaic Rent Control Laws (RCLs) in India, in existence for about 50 to 70 years, have effectively brought ruination of the cities. Owners getting a pittance as rent—sometime as low as Rs 10 per month—are unable to maintain the property; longdrawn court battles—extending up to a few generations—between owners and tenants too, take their toll on all concerned. Owners suffer from physical, mental, emotional and psychological trauma for being unable to evict tenants; heated arguments and physical assaults are all too common. The political class buckles under pressure of the lobbies which wish to perpetuate the status quo. Badly maintained buildings become dangerous for inhabitation; frequent collapse of such buildings all over the country results in thousands of people getting literally buried alive or injured. Under the JNNURM, an attempt was made to address these crucial issues by providing incentive to the States to undertake RCL reform.

The Sarkari Version …

SIX years have elapsed since the JNNURM was launched. The Union Ministry of Urban Development’s (MoUD’s) claim on the number of States that have undertaken the mandatory RCL reform is available on the Ministry’s website. As per the government’s version, 12 States, namely, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Manipur, Mizoram, Nagaland, Orissa, Rajasthan Sikkim, Uttar Pradesh, West Bengal have undertaken mandatory RCL reform under the JNNURM and by inference the other 19 have not.

…..and The Naked Truth

INTELLECTUAL sophistry and obfuscation have been indulged in by the bureaucracy to paint a rosy picture about the RCL reform at the pan-India level in 31 States and UTs covered under the JNNURM. The fact is that not a single State or UT has undertaken mandatory RCL reform since the JNNURM was launched in December 2005! The 31 States/ UTs can be divided into three categories, namely, A, B & C.
Category A includes Arunachal Pradesh, Manipur, Mizoram, Nagaland and Orissa where no RCL existed even prior to the launch of the JNNURM. According to the MoAs signed under the JNNURM, RCL has never been enacted in Arunachal Pradesh; the same goes for Manipur (the market mechanism takes care of the system); no RCL exists in Mizoram and Nagaland. Orissa had a House Rent Control Act, 1967 but as per section 1(4) it ceased to have effect from May 4, 1981.
Category B includes West Bengal, Rajasthan and Karnataka where RCL reform has taken place before the JNNURM came into existence. However, reform even in these three States falls short of the Model Rent Control Legislation, 1992 prepared and forwarded by the Union Govern-ment to the State governments the same year.
Category C includes the rest of the 23 States and UTs. Of these, 20 have given a commitment under the MoA to undertake RCL reform but have failed to adhere to the timeline given. The rest of the three, namely, Delhi, Chandigarh and Maharashtra, have not even given such a commitment. It is noteworthy that the Union Government—which has the legislative compe-tence to undertake RCL reform in Delhi and Chandigarh—has shown no inclination to undertake the same till date. Political expediency overrides legitimate policy!

Outlined below are five case-histories to bring to light the forces at work both at the Centre as well as the States to perpetuate lies.

Case of UP, Delhi, Gujarat, MP, and Chhattisgarh

Curious Case of Uttar Pradesh

The State of Uttar Pradesh (UP) had given a commitment in the MoA to reform its RCL in the fourth year of the JNNURM, that is, 2009-10. As late as November 18, 2009 the UP Government had informed the MoUD at a meeting that RCL reform would be undertaken by December 2009. However, at the 85th meeting of the Central Sanctioning and Monitoring Committee (CSMC) under the Sub-Mission Urban Infrastructure and Governance (SMUIG), JNNURM held on March 29, 2010, the Secretary (Urban Development), UP stated that the “prevailing Regulation of Letting, Rent and Eviction Act, 1972 has provisions required under JNNURM and thus the reforms required to be achieved in the Rent Control Laws have been implemented prior to the launch of Mission. However, due to urgency, this matter was not properly looked into during signing of MoA. Since the provisions required in the Rent Control are completed, no further progress is required.”

Till date not one among the CSMC members—comprising senior bureaucrats from various Central Ministries—has shown the courage of conviction to speak the truth about the RCL reform in UP. One has to be naïve to suggest that the 1972 rental law in UP has provisions required under the JNNURM launched in 2005!!!

Quid Pro Quo

Ironically the above-mentioned crucial meeting was held under the chairmanship of the then Secretary, MoUD who accepted the volte-face of the UP Government on the issue without batting an eyelid. It was expected of the Chairman to cross-check the alleged reforms undertaken by the UP Government by comparison with the Model Rent Control Act, 1992 circulated by the Central Government. Apparently the Chairman was in a hurry as he had just three months left for his retirement and wanted to ensure that the JNNURM funding to UP could be released so that the obstacle of the mandatory RCL reform not having been implemented would be removed and UP would stand beneficiary to thousands of crores of the JNNURM funds.

Subsequently, the JNNURM website started showing that RCL reform has been achieved in UP. It is no coincidence that the Secretary, MoUD, after his retirement from service on June 30, 2010, was appointed in December 2010 by the Mayawati Government as its new adviser with the rank of a Cabinet Minister for expediting mega-projects then under consideration for the development of the State. On June 18, 2010 Justice V.C. Misra, Chairman, UP State Law Commission, submitted the Sixth Report, 2010 proposing a fresh legislation by the legislature of the State on “The Uttar Pradesh Regulation of Rent and Eviction Act, 2010” to the Chief Minster/Law Minister of UP. A model draft Bill on the proposed legislation formed part of this report.

Interestingly on March 4, 2011 the High Level Committee (HLC), headed by V.K. Shunglu and constituted by the Government of India to look into issues relating to the organising and conduct of the Commonwealth Games, indicted Dr M. Ramachandran, the then Secretary, MoUD for playing a key role in determining the contours of the bailout package including high valuation etc. which brought undue gains to Emaar MGF. In May 2011 Dr M. Ramachandran resigned as Infrastructure Adviser to the UP Government. The Central Bureau of Investigation is enquiring into the issue.

The Case of Delhi

On September 11, 2007, an MoA was signed between the MoUD etc. and the Government of the NCT of Delhi (GNCTD) and others in which four pages pertaining to the mandatory reform of RCL were kept unfilled. Later, to legitimise funds illegitimately released over the years to the GNCTD, the Cabinet Committee on Infrastructure (CCI), at its meeting held on December 10, 2009, surreptitiously granted exemption to the GNCTD from implementation of RCL reform! [For details of the Delhi case please see ‘An Open Letter to Prime Minister’, Mainstream, April 2, 2011 and ‘Subverting Right to Information—the Sarkari Way’, Mainstream, June 25, 2011]

The Case of Gujarat

The JNNURM website shows that Gujarat has already undertaken the reform of its rent control law. Extensive research done on the internet showed no such reform has been undertaken by the Government of Gujarat. In fact what happened was just the opposite. In March 2011 the Gujarat State Assembly passed the Bombay Rents, Hotel and Lodging, House Rates Control (Gujarat amendment) Bill, 2011 which immediately received assent of the President of India. This Bill extends the date of the existing archaic RCL in Gujarat, namely, the Bombay Rents, Hotel and Lodging, House Rates Control Act, 1947 for another ten years, that is, till 2021. A classic case of outright deception!

The Case of Madhya Pradesh and Chhattisgarh

The Madhya Pradesh Legislative Assembly passed the Madhya Pradesh Parisar Kirayedari Vidheyak, 2010 in March 2010 and the Chhattis-garh Legislative Assembly passed the Chhattisgarh Rent Control Bill, 2011 in March 2011. Both these Bills, as per available information, are still in the waiting list to receive the assent of the President of India. The JNNURM Directorate is trying to fool the people by claiming that the RCL reform is complete in these two States. The law has to be implemented before making such a claim. In any case passing a law means nothing as the Delhi Rent Act, 1995 has not been enforced even sixteen years after receiving the assent of the President of India. In true Orwellian double-speak, the government’s implementation means non-implementation.
Finally, the JNNURM has come under the scanner of the Comptroller and Auditor General of India (CAG). The CAG is reportedly (TOI, 20.02.2012) giving final touches to its Report which indicates that no reforms were initiated though the Centre continued to spend all its Budget allocation, defeating the goal for which the funds were meant.

[The article is based upon and extracted from the recently released Citizens’ Report titled ‘Jawaharlal Nehru National Urban Renewal Mission, Rent Control Law Reform and Lies: Where is the PM?’ published by the Public Interest Litigation Watch Group.—S.A.]

The author, an Advocate, is the Joint Secretary of the Public Interest Litigation Watch Group. Her contact e-mail is: pilwatchgroup@gmail.com

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