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JNNURM scheme turns into a burden for Vijayawada Municipal Corporation

Published Nov 25, 2014, 2:05 pm IST
Updated Mar 30, 2019, 11:43 am IST
The project has put the VMC in a financial crisis
The JNNURM housing scheme at Jakkampudi Colony in Vijayawada in which several flats are yet to be completed and some are still not occupied.
 The JNNURM housing scheme at Jakkampudi Colony in Vijayawada in which several flats are yet to be completed and some are still not occupied.

Vijayawada: The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme has become a burden for the Vijayawada Municipal Corporation and made it suffer in financial crisis. As the last date is approaching fast, the officials are in a hurry to complete projects as much as possible.

The Mission started in 2005 and is intended for renewal of the civic infrastructure in cities with 10lakh and above population. At that time, Vijayawada has a population of 8.5 lakh, but shown Mangalagiri as part of VMC to get the funds from the central government. The scheme is approved for Vijayawada with Rs 7,300 crore value of projects.


The then chief minister Y.S. Rajasekhar Reddy asked the corporation to choose JNNURM or employee salaries by 010 account from the state government. The corporation is confident of the infrastructure to be developed and said no to salaries from the state.

Under the scheme, the central government releases 50 per cent of the funds on project basis and the VMC should contribute 30 per cent as its share. The state government would adjust the remaining 20 per cent as loan. The first phase of the mission started with 19 projects for Rs 1,418 crore.

The VMC has taken up BRTS project for 7 corridors, but initiated a single corridor with 15km length, worth Rs 152 crore. A new road of 5km long has been laid in place of Satyanarayana puram railway track.


But the project failed and further phases were stopped abruptly. About 28,152 housing flats have been sanctioned in the scheme and the VMC started 181765 and completed 13152 of them.

About 5024 of the houses are incomplete while 9,976 houses are yet to be started. Only 9,700 houses were given to beneficiaries and remaining are still vacant and waiting for occupation.

To meet the share expenses, the corporation lent money from Hudco by mortgaging its properties. The debt and interests for the scheme affected the VMC a lot and it landed in financial crisis.


CPM leader Ch. Babu Rao said. “We have opposed the scheme from the day one. The then mayor did not hear our plea. They thought that many crores income could be possible with the upgraded infrastructure, but they forgot that there is no money to pay the share price.”

Location: Andhra Pradesh