The decision was taken by the Union Cabinet at a meeting chaired by Prime Minister Manmohan Singh.
The new projects and capacity building activities will be under Urban Infrastructure and Governance (UIG) and Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) components of JNNURM, an official release said.
New Urban infrastructure projects and capacity building activities in Urban Local Bodies (ULBs) in states and Union Territories (UTs) would be approved till March 31, 2014, it said.
The proposal would enable making provisions for creation of urban infrastructure, particularly in small and medium towns in all states and UTs.
"These projects would be subsumed in the next phase of the JNNURM for the 12th Five Year Plan," the release said.