CONTENTS Executive Summary i-ii 1 Introduction 01-09 1.1 Importance of Poverty Reduction & Its Reduction in Urban Areas 01 1.2 Current Approaches to Urban poverty reduction 02 1.3 Pro-Poor Initiatives under JNNURM 04 1.4 Urban Poverty Reduction Strategies & JNNURM 05 1.5 Basic Services for Urban Poor (BSUP) Fund 06 1.6 The Study 06 1.6.1 Objectives 06 1.6.2 Scope of work 07 1.6.3 Approach/Methodology 07 1.6.4 Study outcomes 08 1.7 Structure of Report 09 2 Structured Approaches to Urban Poverty Alleviation: A Review10-21 2.1 Poverty Reduction Strategy & Action Plans 10 2.2 Poverty Alleviation Plans (Kudumbashree model) 11 2.2.1 Preparation of Anti Poverty Sub Plan 11 2.3 Municipal Action Plan for Poverty Alleviation (APUSP Model) 13 2.4 Pro-Poor Budgeting (West Bengal Model) 18 2.5 Gender Budgeting 21 3 Funds and Fund Based Approach 23-32 3.1 Typology of Funds 23 3.2 Funds in an Accounting Framework 25 3.3 Fund based approach to local government finance 25 3.4 Fund Based Approaches to Poverty Alleviation 26 3.4.1 Urban Poor Development Fund of Cambodia 27 3.4.2 Pakistan Poverty Alleviation Fund 29 3.4.3 Japan Fund for Poverty Reduction 31 4 Development of BSUP Fund: An Approach to Urban Poverty Alleviation 33-39 4.1 Introduction 33 4.2 Internal Earmarking of Municipal Budget 35 4.3 Constitution of BSUP Fund 36 4.4 Management & Operation of BSUP Fund 36 4.4.1 Authorization 37 4.4.2 Accounting 37 4.4.3 Access criteria 37 4.5 BSUP Fund Utilization Planning 37 4.6 Governance of BSUP Fund 38 4.7 Other Aspects 39 5 Internal Earmarking of Municipal Funds for Urban Poor 40-47 5.1 Forms of Earmarking Municipal Funds 40 5.2 Internal Earmarking in the States: A Review 41 5.3 Internal earmarking in the ULBs: Experience of AP 42 5.4 Summing-up 46 6 Constitution of BSUP Fund at ULB Level 48-52 6.1 Approach to the Constitution of BSUP Fund 48 6.1.1 Estimation of net or surplus own revenue 48 6.1.2 Subsuming funds under National, State and Other Schemes 49 6.2 Constitution of BSUP Fund: Some Experiences 50 6.2.1 BSUP Fund in Hyderabad 51 6.2.2 UPA Fund in Vijayawada 51 7 Instituting Poverty Alleviation Plans for Utilizing BSUP Fund 53-65 7.1 Identification of Urban Poor: Approaches 53 7.1.1 Below poverty line measurement 54 7.7.2 Participatory poverty assessment 54 7.1.3 Biometric survey of urban poor households 57 7.1.3 GIS survey of Slum settlements 58 7.2 Poverty Strategy and Action Plan/Sub-plan preparation 58 7.2.1 Urban poverty reduction strategy 58 7.2.2 Urban poverty alleviation action plan 59 7.3 Pro-poor Expenditure Identification: Approaches 62 7.3.1 Area based approach 62 7.3.2 Sector specific approach 63 7.3.3 Beneficiary oriented approach 63 7.3.4 Suggestive Approach 64 8 Budgeting & Accounting Aspects of BSUP Fund 66-76 8.1 P-Budget: Integration of Poverty Alleviation Plan & Budget 66 8.2 Creation of Budget Heads 69 8.3 Accounting for BSUP Fund 69 9 Governance Issues of BSUP Fund 77-80 9.1 Social Accountability for better Fund Governance 77 9.1.1 Participatory Planning 77 9.1.2 Citizens' Surveys/ Report Cards 78 9.7.3 Social Audit/ Expenditure Tracking 78 9.2 Promoting budget analysis, advocacy and participation 79 10 Mobilizing Municipal Resources for Urban Poverty Alleviation 81-85 10.1 Revenue sources of ULBs 81 10.2 Mobilizing Own revenue from Local resources 82 10.3 Land based resource mobilization 83 10.4 Other Sources 85 11 Developing BSUP Fund in ULBs: Road Map & Guidelines 86-94 11.1 Road Map for BSUP Fund Development 86 11.2 Guidelines for Development of BSUP Fund 89 77.2.7 Objectives 89 77.2.2 Action Plan 89 77.2.3 Implementation plan 90 Annexure I Study Terms of Reference Annexure II Questionnaire Annexure III GO Ms No. 265 of Govt. of Andhra Pradesh Annexure IV GO No. 1249/MA/C-10/3S-61/07 of Govt. of West Bengal Annexure V Order No. Tax-10/2007(part-lll) 25152/HUD of Govt. of Orissa Annexure VI Guidelines for formulation, implementation and monitoring of Scheduled Caste Sub-Plan for Scheduled Castes and Tribal Sub-Plan for Scheduled Tribes Annexure VII Government Order of Andhra Pradesh on Implementation of BSUP Fund and Reporting by ULBs Annexure VIII Land as a Resource to BSUP Fund Annexure IX Report of the National Consultation cum Workshop on 3 pro-poor Studies held on August 31, 2009