Jawaharlal Nehru

National Urban Renewal Mission

Formulation of a City
Development Plan
2

Ministry of Urban Employment and

Ministry of Urban Development
Poverty Alleviation

Government of India
 JAWAHARLAL NEHRU
NATIONAL URBAN RENEWAL MISSION

Formulation of a City Development Plan

 Contents

The Toolkit

I. City Development Plan (CDP) 4

II. Preparing a City Developing Plan 5

III. City Assessment: Analysis of Existing Situation 7

IV. Developing a Vision for the City 16

V. Working on Strategies 18

VI. City Investment Plan (CIP) and Financing Strategy 19

VII. Summary 20

Annex 21

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 The Toolkit

This toolkit is designed to assist city governments and other participating

organisations such as the state-level and city-level water supply and sewerage
boards and development authorities in the formulation of City Development
Plans (CDPs). The toolkit outlines the scope of City Development Plans (CDPs),
as it emerges out of the Jawaharlal Nehru National Urban Renewal Mission
(NURM). It indicates the requirements of data, and suggests a methodology
for analysis, together with steps for their use to realistically assess the problems
and resources and comparative advantage of cities and to determine a medium
to long term vision for their future development. The toolkit provides an
approach to identifying the key issues that need to be addressed and the options
that are available with city governments to bridge the gap between where the
city is now and where it wishes to go.

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 I. City Development Plan

A City Development Plan (CDP) is both a perspective and a vision for the future development
of a city. It presents the current stage of the citys development where are we now? It sets out
the directions of change where do we want to go? It identifies the thrust areas what do we
need to address on a priority basis? It also suggests alternative routes, strategies, and interventions
for bringing about the change what interventions do we make in order to attain the vision? It
provides a framework and vision within which projects need to be identified and implemented.
It establishes a logical and consistent framework for evaluation of investment decisions.

A CDP is anchored on the Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
goal of creating economically productive, efficient, equitable and responsive cities. As a step to
achieving this goal, the CDP focuses on the development of economic and social infrastructure,
strategies that deal specifically with issues affecting the urban poor, strengthening of municipal
governments and their financial accounting and budgeting systems and procedures, creation of
structures for bringing in accountability and transparency, and elimination of legal and other
bottlenecks that have stifled the land and housing markets. It provides a basis for cities to
undertake urban sector reforms that help direct investment into city-based infrastructure.

It is essential for a city to systematically think of the future, and determine how it wishes
to shape that future.

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 II. Preparing a City Development Plan

Preparation of a CDP is a multi-stage exercise, involving:

(i) In-depth analysis of the existing situation, covering the demographic, economic, financial,
infrastructure, physical, environmental and institutional aspects: The purpose of this stage is
to review and analyse the current status of the city with regard to the state of its development,
systems and procedures, as equally its institutional and financial context. This stage is meant
to identify the strengths and weaknesses in the citys development and to provide an
understanding of what impedes service delivery and management within the existing set-up
and what contributes to better service provision. This stage offers an opportunity to bring
out the unique features of the city that may distinguish it from other cities.

(ii) Development of a perspective and a vision of the city: Using the results of the first stage of
analysis combined with consultations with key stakeholders and civil society, this stage is
meant to develop a vision for the future development a shared vision of where the city
wants to be in a medium-term perspective. It is a collective vision of the future direction
expressed in terms of expectations and often even goals, such as water for all.

(iii) Formulating a strategy for bridging the gap between where the city is and where it wishes to go:
It is in this stage that strategies and interventions are identified for attaining the vision and
future development perspectives. This stage is used to first identify the options and strategies
and second, to evaluate the strategies from the perspective of their contribution to the goals
and objectives of the JNNURM. The chosen strategies are translated into programmes and
projects in this stage. This is the phase where the city needs to decide which programmes
would contribute most to the vision and mediumterm perspectives. It is at this stage where
criteria are selected, with appropriate consultative processes, for prioritising the strategies,
programmes and projects.

(iv) Preparing a City Investment Plan (CIP) and a financing strategy: An investment plan and a
financing strategy are an integral part of the CDP. It is an aggregate investment plan indicating,
for instance, the cost involved in providing 24/7 water supply from the present level of 10/
7; it is not a financial estimate of a project for increasing the capacity of a water plant from
1,00,000 mld to 1,50,000 mld. Crucial to this stage is a plan that considers the alternative
sources of financing the vision and the accompanying strategy and programmes.

The process of formulating a CDP is illustrated in the chart (see diagram).

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Multistage Exercise

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III. City Assessment: Analysis of the Existing Situation

An analysis of the existing situation is the first stage in the formulation of a CDP. The purpose of the
analysis is to make a realistic assessment of where the city is, the direction in which it has been
moving, and its strengths and weaknesses. This stage is meant to make an in-depth analysis of the
demographic, economic, financial, infrastructural, physical and environmental, and institutional aspects
of the city. It should also examine the implications thereof for service delivery, management and
governance.

Demography
The demographic characteristics of a city are a major component in the formulation of a CDP,
and are analysed in terms of the pattern of population growth and its spatial spread within the
city. The analysis should reflect on questions such as: Is the population growth excessive (by
what measure), average or below average? What factors underlie the growth natural increase,
in-migration, or jurisdictional change? What, in broad terms, are the characteristics of the in-
migrants? What implications does population growth have for shelter, services and infrastructure?
What is the social composition of the citys population in terms of income and access to shelter
and services? What are the poverty levels within the city? Are the poverty levels in the city
growing or declining? Is the problem of slums a matter of major concern for the city? Is it a
growing problem or one that is showing signs of stabilisation?
The analysis can be extended to examine the age and sex composition of population so as to
obtain a better understanding of the size of school-going population and labour force.

TABLE 1 : POPULATION GROWTH

Year Population (lakh) Average annual growth rate (%)
1981
1991
2001
2005 (Estimated)
2011 (Projected)*
*Straight-line projection

TABLE 2 : COMPOSITION OF GROWTH

Composition Population increase during
Year 1981-91 % of total 1991-2001 % of total
Natural increase
In-migration
Jurisdictional change
Total increase

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 TABLE 3 : SOCIAL COMPOSITION OF POPULATION
Year Number of the poor*
1993/94
1999/00
2004/05 (Estimated)
*Below poverty line

TABLE 4 : ACCESS OF THE SLUM DWELLERS TO BASIC SERVICES

Year Number of Percentage of slum dwellers having access to
slum dwellers Water Drainage Waste service
supply system collection
1991
2001
2005 (Estimated)

Economic Base
The economic base refers to the key sectors that drive the citys economy. The sectors may relate
to mining and manufacturing, infrastructure such as power and utilities, financial and banking
services, public services, tourism, or places of religious importance. The key to the analysis lies in
identifying the lead sectors of the citys economy, and examining if the growth within the lead
sectors is likely to be maintained in a medium-term framework? It should ascertain the recent
shifts in the economic base and the factors that would explain such shifts and their long-term
impact on the citys economy. It is important to take stock of the role and contribution of the
informal sector in the citys economy.

TABLE 5 : ECONOMIC BASE, REGISTERED MANUFACTURING AND SERVICES

Economic base Years
2001 2005 (Estimated)
Manufacturing
Employment
Production (Rs. crore)
Value added (Rs. crore)
Services (IT etc.)
Employment
Production or quantum of business (Rs. crore)
Value added (Rs. crore)

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 TABLE 6 : ECONOMIC BASE, OCCUPATIONAL DISTRIBUTION, 2001
Occupation category Number of workers (lakh) % of total
Primary sector
Household industry
Manufacturing
Electricity, gas and water supply
Construction
Transport, storage and communication
Banking and insurance
Trade and business
Services
Total

Financial Profile
The financial profile of the city indicates the state of the citys finances and the capacity of the city
to be able to manage its finances and mobilise resources for maintaining infrastructural services at
prescribed norms and standards. The analysis should focus on assessing: (i) the financial status of
the city government (as also of other parastatal organisations responsible for service provision);
(ii) the status of current assets and liabilities including outstanding debt; and (iii) analysing the
role of inter-governmental transfers in the finances of municipal governments. It should especially
address such questions as: What sources of revenues do the municipal governments have? Is the
municipal government able to meet its current level of recurrent expenditure out of its own
resources? Is it able to optimally use its own resources? How effective are the local tax assessment
and collection procedures criteria? To what extent does the city government depend on the state
government transfers for meeting its recurrent expenditures? Is the gap between what is needed
by city governments and what they are able to raise due to inter-governmental assignment of
revenue-raising powers, or their inefficient use and application by city governments? It will be
useful to examine if the levels of expenditure on municipal services are skewed in favour of
certain areas compared with others e.g., the poor areas. What budgetary and accounting practices
are used? Do the finance accounts of city governments reflect the receivables and payables?

In most municipalities, the primary source of revenue for the local government is property taxes.
An analysis of the property tax system should focus on tax assessment and collection practices,
ratio of collection costs to revenues, and estimation of leakages, loss on account of exemptions
etc. What criteria are generally applied in fixing user charges? What is the level of efficiency and
equity in local taxation, expenditure, and user fee policies? How much do the urban poor
contribute to local revenues? How much do they benefit from local expenditures?

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 TABLE 7 : MUNICIPAL REVENUE INCOME
Year Revenue Account Receipts (Rs. lakh)
Tax Non-Tax Transfers Total
including grants
2001/02
2002/03
2003/04
2004/05

TABLE 8 : MUNICIPAL REVENUE EXPENDITURE

Year Revenue Account Expenditure (Rs. lakh)
Establish- Operation and Interest Others Total
ment (wages maintenance payment
and salaries)
2001/02
2002/03
2003/04
2004/05

TABLE 9 : MUNICIPAL CAPITAL RECEIPTS

Year Capital Receipts (Rs.lakh)
State government (Rs.lakh) Financing Market Total
institutions
Loans Grants
2001/02
2002/03
2003/04
2004/05

TABLE 10 : FINANCES OF CITY-LEVEL WATER SUPPLY AND SEWERAGE BOARD

Year Expenditure (Rs. lakh) Income (Rs.lakh)
2001/02
2002/03
2003/04
2004/05

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Infrastructure
The infrastructure profile refers to the current state of infrastructure and utility systems in the
city. It indicates the adequacy or inadequacy of infrastructural services in terms of coverage,
quantity, and quality, and attempts to identify the factors responsible for inadequate development
of infrastructure services. It measures the gap between demand and supply of different
infrastructural services, and examines the factors that explain the gap. For example, is the inadequacy
of the availability of water or power due to: (i) the lack of investment, leakages and thefts
commonly observed in water and power sectors; (ii) low tariffs that serve as a disincentive to
investment; (iii) or institutional fragmentation. It reviews the cost of delivering services and
compares them with recoveries made therefrom. What are the distributional characteristics of
service delivery within the city? What differences are there in the level of services received by
different socio-economic groups?
The most important aspect of the analysis lies in recognition of the fact that inadequate access to
infrastructure is a key constraint to development; apart from determining the characteristics and
quality of public service delivery, it is important to ascertain the factors that are constraining
infrastructure development. Are these factors financial, institutional, or others?
TABLE 11 : STATE OF THE INFRASTRUCTURE

Water availability Installed capacity (mgd)

Released/daily (mgd)
Source of water supply Within city limits
10-50 sq. km.
50-100 sq. km.
Water coverage Population covered by public water supply %
Per capita supply (lpcd)
Supply duration (hrs.)
Wastewater Disposal Wastewater generated daily (mld)
Disposal (underground sewerage) capacity (mld)
Present operating capacity (mld)
Households connected to underground sewerage %
Solid Waste Waste generation daily (tonnes/day)
Collection daily (tonnes/day)
Stormwater Drainage Annual rainfall (cm.)
Length of stormwater drains (km.)
Roads and Road Transport Municipal roads (km.)
State-level roads (km.)
Public transport
Buses (number)
Bus capacity/passengers
Private registered vehicles
Street Lighting Number
Area coverage %

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 TABLE 12: COST RECOVERY IN URBAN INFRASTRUCTURE
Infrastructure Cost incurred in service Direct recoveries (Rs. lakh)
provision (Rs. lakh)
2002/03 2003/04 2004/05 2002/03 2003/04 2004/05
Water supply
Sewerage and sanitation
Solid waste collection
Public bus services

TABLE 13: LEVEL OF AGGREGATE INVESTMENT IN URBAN INFRASTRUCTURE,

2001/02 TO 2004/05
Infrastructure Public investment Private investment
(Rs. crore) (Rs. crore)
Water supply
Sewerage and drainage
Solid waste
Roads (municipal)
Street lighting
Storm water drainage
Total

Physical and Environment Aspects

The physical aspects of a city relate to topography (the extent to which it acts as a constraint on
development), natural drainage system, and availability of lands. Given the service delivery concerns,
this element of assessment should specifically deal with the availability of land, and land use
organisation. It should indicate the total land availability, allocation of land for different uses and
purposes, whether it has been done on the basis of certain identified principles, and their consistency
with the broader economic and infrastructural base of the city. The analysis contains an assessment
of the adequacy of land availability and focuses on the role of legal and statutory provisions e.g.
Urban Land (Ceiling and Regulation) Act, 1976 in making land available to the market. It
contains a survey and delineation of areas and infrastructure that are in need of renewal, by
establishing criteria for identification of renewal areas.

Given that urban planning is an important factor in development, it is necessary to focus on such
questions as: What percentage of urban land is occupied by different uses? What land use changes
have occurred in recent years? What are the characteristics of the urban land market? What kinds
of land use controls are practised?

An analysis of environment is primarily concerned with the impact of population growth, changes
in income, expansion of economic activities, motorisation and the like on environment and

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 environment-related services such as air and water quality, waste water, and composition of solid
wastes including toxic and hazardous waste. A key point is to assess the health impacts of
environmental conditions within the city. It is equally essential to include in the analysis, the
citys susceptibility to floods, earthquakes, or other national disasters.

TABLE 14 : ENVIRONMENT SERVICES

Environmental services Quality
Air
Water
Waste water
Solid water

TABLE 15 : LAND SUPPLY (HECTARES)

Year Developed land Undeveloped and under developed
(hectares) land under use (hectares)
2001/02
2002/03
2003/04
2004/05

TABLE 16 : LAND USE BREAK-UP

Category % Area (specify year)
Residential
Commercial
Industrial
Public semi-public
Recreational
Transportation
Agricultural and water bodies
Special area*
Total area
*Specify detail of which areas have been defined as special areas viz. urban villages, slums etc

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 TABLE 17 : ESTIMATING RENEWAL OF HOUSING AND INFRASTRUCTURE STOCK, 2005
City Stock Area (hectare)
Housing
Infrastructure
N Roads and streets
N Water distribution network*
N Sewerage and drainage*
Industry
N Obsolete, technological and physical
N Incompatibility with other uses
Business districts
N Obsolete
N Incompatibility with other uses
* use appropriate unit of measurement such as km. for distribution network.

Institutions
The city is managed and governed by a number of institutions and organisations. In this respect,
a city is a complex entity. The purpose of the analysis is to present the organisational structure as
it relates to the delivery and management of infrastructure services, i.e., who does what, and
evaluate the efficiency and effectiveness of the existing institutional structures. Often, responsibilities
overlap, and also often, there may exist fragmentation of responsibilities without any platform
for coordination. The analysis needs to be organised such that it sheds light on the key problems
in the existing allocation of functional and financial responsibilities, and the extent to which it
bears on the efficient and equitable delivery of services. It involves: (i) identification of institutions
and organisations that have direct and indirect responsibilities for infrastructure provision; (ii)
identification of the areas of fragmentation or overlap; (iii) assessment of the impact that it has
on infrastructure delivery and management; and (iv) a review of the role of the private sector in
service delivery and the potential of public-private partnership in the development and management
of infrastructural services.

The analysis is designed to focus on such questions as: What is the de jure and de facto distribution
of authority between the three tiers of government and how does it relate to Constitutional and
legal requirements? What impact does it have on urban administration and delivery of public
services? Is there an overlap in the responsibilities and activities of public service agencies? Are
their objectives and activities complementary or conflicting? What mechanisms exist for
interagency coordination?

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 TABLE 18 : INSTITUTIONAL RESPONSIBILITY
Urban infrastructure Planning and design Construction Operation and maintenance
Water supply
Sewerage
Drainage
Storm water drainage
Solid waste disposal
Municipal roads
(including flyovers)
Street lighting

TABLE 19 : ROLE OF THE PRIVATE SECTOR IN URBAN INFRASTRUCTURE PROVISION

Urban infrastructure Role of the private sector (specify)
Water supply
Sewerage
Drainage
Storm water drainage
Solid waste disposal
Municipal roads (including flyovers)
Street lighting

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 IV. Developing a Vision for the City
Developing a vision for the city is central to the preparation of a CDP. A vision is a statement of
where the city wishes to go, within a given timeframe, and is often expressed in terms of clear
expectations. It defines the potential of the city and reflects its unique attributes in terms of
comparative and competitive advantages, values and preferences of the citys residents, relationship
of the city to the state, national and global economies, and of course, the history and physical
characteristics of the city. A vision aligns stakeholders energies to work cohesively for the
development of the city. Cities need to systematically consider the future, and design strategies
to accordingly shape the future. All objectives, strategies, programmes and projects must be
aligned with the vision of the city.

Developing a common vision requires a significant effort of consensus building in order to balance
the competing demands arising from different economic infrastructure sectors, as also from different
interest groups within the city. In order to achieve an understanding on a common vision, it is
useful to choose milestones and targets such as provision of a minimum level of services to all;
public disclosure and transparency in the formulation of budget proposals; introduction of a
single window in matters of service delivery and management and the like. In developing the
vision, cities must choose a set of criteria that are directly relevant to the JNNURM components.
It is important that when cities define outcomes and milestones on the vision, they ensure that
these are measurable and have a time frame.

TABLE 20 : VISION AND GOALS

Vision and goals Year
2010 2015 2020
Sectoral agenda
Water supply
Sewerage
Sanitation
Solid waste management
Drainage/storm water drains
Urban transport
Heritage
Reform agenda
Decentralisation
Land and housing markets
Transparency and accountability
Community participation
Financing management system
Municipal finances
Budgeting for the urban poor

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 THE JNNURM OUTCOMES

 Universal access to a minimum level of services

 Establishment of city-wide framework for planning and governance

 Modern and transparent budgeting, accounting, and financial management system at

municipal levels

 Financial sustainability for municipalities and other service delivery institutions

 Introduction of e-governance in the core functions of municipal governments

 Transparency and accountability in urban service delivery and management

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 V. Working on Strategies
The gap between where the city is and where it wishes to go can be bridged by pursuing different
strategies and programmes. It is important that alternative strategies for meeting the gap are
identified and subjected to careful evaluation. In the context of the JNNURM, the selection of
a strategy or a set of strategies should be guided by their contribution to its goals, objectives, and
the reform agenda.

The selection of a strategy is an extremely important constituent of a CDP, and needs to be done
with wide-ranging consultations among key stakeholders. A strategy that links the urban poor
with service provision may be preferred compared to the one that aims at expansion of service
without any reference to its potential beneficiaries or target groups. An urban renewal strategy
which incorporates the interests of the poor in the transition phase may rank high in comparison
with another, which does not distinguish between different affected groups. It is thus evident
that evaluation of alternative strategies aims at maximising the impact be it the water supply
project or a constituent of the reform agenda like the repealment of the Urban Land (Ceiling and
Regulation) Act, 1976.

In working on strategy formulation and selection, it is useful to ask: Will this strategy help in
achieving the vision or will it help bring the city closer to the vision? Will this strategy help in
achieving the JNNURM outcomes? The selection of a strategy involves making a choice; no
two strategies are of equal importance in their impact. Selection needs to be guided by the
probability of producing results and should be evaluated in terms of outcomes instead of inputs.
Selection is often determined by institutional capacities and financial means for implementation
although strategies could be selected in a way that they enhance institutional and financial capacities
to achieve the vision.

TABLE 21 : CRITERIA FOR STRATEGY SELECTION

Criteria Alternative strategies and programme

A strategy plan is one that can help a city leapfrog into the future in order to achieve the
vision or the perspective.

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 VII. City Investment Plan and
Financing Strategies

A City Investment Plan (CIP) provides an estimate of the level of investment that will be needed
to implement the CDP. It is an estimate and approximation, and provides an order of investment,
arrived at by using financial norms or standards for service provision and upgradation or directly
estimating the cost of implementing a reform agenda. An investment plan may be formulated
by seeking answers to questions such as: What level of investment would be needed to provide
150 litres of water to the citys population? What would be the order of investment if area under
citywide roads were to be raised from the present level to about 20 per cent of the citys total area?
What would the city need to invest if the open drainage system were to be converted into an
underground sewerage facility?

A linked, but an extremely important, aspect is to consider options and strategies for financing
the vision as contained in the CDP. Will it be financed by the local government by mobilising
resources or in partnership with other tiers of government and financing institutions? Will the
city resort to capital market? What will the city need to do in order to access the capital market?
Will it encourage the private sector to finance this vision? What steps will be required to be taken
to facilitate private sector investment? To the extent a city is able to systematically examine the
financing options will add value to the CDP.

TABLE 22 : FORMAT FOR FINANCING OPTIONS

Financing options Estimate of additional resources (Rs.crore)
Municipal governments own resources
State government grants and loans
Financing institution
Capital market
Off-shore financing
Central government grants
Private sector

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 Summary

It is useful to summarise the key features of the CDP focusing on the following:

N What does the analysis of citys profile show? Where are the opportunities and where are the
key constraints?

N Given the opportunities and constraints, where does the city wish to move in a medium-
term perspective? While the vision is forward-looking, it is also a realistic vision, achievable
with a given time frame.

N What strategic options are available to achieve the vision? What are the costs and benefits of
alternative strategic options? Which of the strategies will help the city achieve the vision at
least cost or maximum impact?

N What would be the aggregate investment needed to implement the vision? What are the
options for mobilising resources for implementing the CDP?

N What reforms other than those embodied in the JNNURM are necessary for effectively
implementing the CDP?

The Toolkit lays down the steps in the preparation of a (CDP). It must be recognised that
the preparation of a CDP is not a straight-jacketed exercise that must follow the steps
outlined in this Toolkit. It is flexible, requiring an approach that suits the citys
environment and institutional set-up. Further, this Toolkit is, at best, illustrative and a
reference document and so are the format of Tables

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 Annex
Activities Admissible under JNNURM
i. Urban Renewal i.e., redevelopment of inner (old) city areas (this would include items like
widening of narrow streets, shifting of industrial/commercial establishments from non-
conforming (inner-city) areas to conforming (outer-city) areas to reduce congestion,
replacement of old and worn-out water pipes by new/higher capacity ones, renewal of sewerage/
drainage/solid waste disposal systems, etc). Land acquisition cost will not be financed under
this component of the programme.

ii. Water Supply including setting up de-salination plants, where necessary;

iii. Sewerage and solid waste management

iv. Construction and improvement of drains/storm water drains

v. Urban transport

vi. Laying/improvement /widening of arterial/sub-arterial roads and bridges to remove transport

bottlenecks.

vii. Laying of ring roads and by-passes around metro and mega cities, provided certain cost recovery
measures like toll charges are built in.

viii.Construction and development of bus and truck terminals

ix. Environmental improvement and city beautification schemes.

x. Construction of working women hostels, marriage halls, old age and destitute Childrens
homes, night shelters with community toilets.

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