Pushing The Urban Cause

Pushing The Urban Cause

In the Union Budget announced by Finance Minister Pranab Mukherjee last July, one of his most important announcements that concerned the Indian automotive industry was that of an increased allocation under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The 87 percent increase took the total allocation for JNNURM to Rs 12,887 crore. Allocation for the National Highways Development Programme (NHDP) was also increased by 23 percent.

The Minister had announced that infrastructure development will be given a big boost in the coming years, and all bottlenecks for speedy implementation of infrastructure projects will be removed – a much needed impetus for the country’s infrastructural needs and also in a way to lift the commercial vehicle industry, reeling under serious pressure for over a year.

The JNNURM in particular promises to considerably improve transportation in urban areas, among several other things. However, the much-touted mission has been slow in implementing projects, with one recent report claiming that only 10 percent of the commissioned projects have been completed till date. It was also observed by the study that the project was plagued by cost overruns and enormous delays. It has been observed that since December 2005, when JNNURM started, the Centre has been giving funds to States for implementing projects under the mission. Their sluggish approach has now attracted the Centre’s ire, with the Government warning the States that it will find it difficult to get financial aid from it in future, if projects under JNNURM are not implemented in its true spirit and on schedule.

In fact, in February this year, the Government of India as part of the second economic stimulus package sanctioned 15,260 buses for 61 cities under the mission and all States were accordingly advised to place orders by 31 March, 2009. The Centre had also released a 50 percent instalment for all the projects sanctioned in February, yet it is understood that orders have been placed for only 10,491 buses. While that is one side of the story, the other aspect is about bus manufacturers’ preparedness to cater to the huge demand. The bulk of the order is understood to be that for standard high-floor, front-engine buses, with a 900 mm floor height. This is a significant change from the mission’s earlier sanction for low-floor and semi-low-floor, rear engine buses.

For bus makers, as pointed out by MD & CEO, VE Commercial Vehicles, Siddhartha Lal in a recent interview to us, it is a loss of precious time, every time the Government changes specifications or adds new features to the buses. Moreover, introduction of standard buses would obturate the introduction of new buses, as the standard buses would not retire for the next 10-12 years.

Indeed, by shifting goal posts, the Government’s good intentions of providing appropriate and adequate transportation options to Indian cities might not get the desired results. Supplies for standard high-floor, front-engine buses could be met, but others need engineering and validation for every additional feature – resulting in a loss of precious time.

The mission is in the mid-life of its seven-year tenure and to meet the objective it has set out to achieve, all stakeholders would need to leapfrog – Ministry of Urban Development, the nodal agency for JNNURM, needs to ensure a stable set of guidelines while State governments would need to fast track its procurement plans.
On its part, the CV industry too needs to ramp up development and production of buses. With the economy gradually crawling back to normalcy, the CV industry can expect better