Only 22 of the 1,517 housing projects approved under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) were completed by the due date of March 2011. The Comptroller and Auditor General (CAG) in its report on Performance Audit of JNNURM, which was tabled in Parliament on Thursday, also pointed out at diversion of funds totaling nearly Rs 115 crore and ineligible beneficiaries getting benefits in implementation of JNNURM.

The report observed that a total of 1,517 and 1,998 housing and infrastructure projects respectively were approved for implementation between 2005 and 2011. However, only 22 of the 1517 approved projects were completed within the deadline.

The 103-page report observed that a crucial objective of bringing about reforms in the governance of Urban Local Bodies (ULBs) could not be achieved through the scheme.

The status of dwelling units within the housing projects was also low as only 26 per cent of approved dwelling units have been completed. In respect of urban infrastructure projects, the report observed that out of the 1,298 projects approved, only 231 projects (18 per cent) were completed.

The report pointed out that there were eight cases of diversion of funds in Urban Infrastructure projects in Andhra Pradesh, Chattisgarh, Haryana, Jharkand, West Bengal and Himachal Pradesh. The amount diverted was Rs 114.68 crore.

The diversion was for purposes other than those admissible under JNNURM and in some cases even for non-JNNURM purposes. In one instance, funds were utilised for payment of salary to the municipal staff.

The report also said that there were also deficiencies in selection of beneficiaries of houses for urban poor which led to risks of ineligible beneficiaries getting the benefit.

The report noted that the union ministries were “not equipped” to monitor a project of this magnitude. The CAG said the centre must identify the deficiencies in monitoring the sceheme both at the central and state level and address them during the next two years. The report said that the government should monitor the execution of projects so that there are no diversions to ineligible beneficiaries.

It also suggested that the ministry of urban development and the ministry of housing and urban poverty alleviation should introduce a "zero tolerance policy" at all levels in respect of irregular expenditure and diversion of funds by the way of a greater financial discipline. The report said that against an allocation of Rs 66,084.66 crore by the planning commission, the government of India had only made an allocation of Rs 37,070.15 crore of which only Rs 32,934.59 crore had been released by March 31, 2011.

The CAG said that the JNNURM guidelines had been deficient in giving adequate advisory to states regarding parking of funds and there was no uniformity in utilising interest earned on parked funds.

The JNNURM is a central government scheme, launched in December 2005, for fast track development of cities across the country. It is implemented by the ministries of Urban Development and Housing and Urban Poverty Alleviation.