The second phase of the central government's Jawaharlal Nehru National Urban Renewal Mission (JNNURM) may give some freedom to states to decide on the usage of funds and the projects may also cover small cities.

The move to empower state government comes amidst complaints by some states of discrimination by the centre in allocation of funds to non-UPA-ruled states.

The second phase of the JNNURM may be launched after the next parliamentary election results are out. The central government is in the process of finalising the criteria of selection and fund allocation under the second phase of the mission. There are reports that performance of states in the first phase of JNNURM could be one of the qualifying norms for selection.

Media reports indicate that state governments would have more freedom in choosing cities, cluster of cities and urban growth centres to avail the central assistance. Further, the state governments may reportedly submit their comprehensive plan of urbanization in the state.

The second phase of the mission would cover cities with a population five lakh and above. In the first phase of the mission, the cities with a population of 1 million or more were included.