IAS Gyan

Daily News Analysis


16th March, 2023 Economy

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  • As the June 2023 deadline for completing the Smart Cities Mission approaches, the government has asked 20 of the worst-performing cities — ones that have completed the fewest projects under the mission — to buck up.

What is the Smart Cities Mission?

  • The Smart Cities Mission is an initiative of the Union Housing and Urban Affairs Ministry that was launched in 2015.
  • Cities across the country were asked to submit proposals for projects to improve municipal services and to make their jurisdictions more liveable.
  • Between January 2016 and June 2018 (when the last city, Shillong, was chosen), the Ministry selected 100 cities for the Mission over five rounds.
  • The projects were supposed to be completed within five years of the selection of the city, but in 2021 the Ministry changed the deadline for all cities to June 2023, which was earlier the deadline for Shillong alone.



  • With an increase on urban population and rapid expansion of areas, government is looking at smarter ways to manage complexities, increase efficiencies and improve quality of life.
  • This has created a need for cities that monitor and integrate infrastructure to better optimise resources and maximise services to citizens.


  • The objective of the smart city initiative is to promote sustainable and inclusive cities that provide core infrastructure to give a decent quality of life, a clean and sustainable environment through application of some smart solutions such as data-driven traffic management, intelligent lighting systems, etc.

The core infrastructure elements in a Smart City are as follows:

    • Adequate water supply
    • Assured electricity supply
    • Sanitation including solid waste management
    • Efficient urban mobility and public transport
    • Affordable housing, especially for the poor
    • Robust IT connectivity and digitalisation
    • Good governance, especially e-governance and citizen participation
    • Sustainable environment
    • Safety and security of citizens, particularly women, children and the elderly
    • Health and education

The focus is on sustainable and inclusive development and the idea is to look at compact areas, create a replicable model to serve as a beacon to other aspiring cities.


  • The mission will cover 100 cities that have been distributed among the States /Union Territories (UT) on the basis of an equitable criteria. The formula gives equal weightage (50:50) to urban population of the State/UT and the number of statutory towns (a town with a municipality, corporation, cantonment board or notified town area committee) in the State/UT.
  • Based on this formula, each State/UT will, therefore, have a certain number of potential Smart Cities, with each State/UT having at least one.


Components of area-based development in the 100 Smart Cities Mission in India comprise city improvement (retrofitting), city renewal (redevelopment) and city extension (greenfield development), along with a pan-city initiative.

  • Area-based development that will transform existing areas, including slums, into better planned residential areas by retrofitting and redevelopment, thereby improving habitability of the whole city
  • Greenfield projects that will develop new areas in the city to accommodate the expanding population in urban areas
  • Pan-city development envisaging the application of select smart solutions to the existing city-wide infrastructure

Administrative Structure

Guidelines on Smart City provide monitoring at three levels – national, state and city

  • National: An Apex Committee, headed by the Secretary of the Ministry of Urban Development and comprising representatives from related ministries and organisations, has the mandate to approve proposals, monitor progress and release funds.
  • State: A High Powered Steering Committee (HPSC) to be headed by the Chief Secretary of the State, which would steer the Smart City Mission as a whole.
  • City: A Smart City Advisory Forum in all Smart Cities, comprising the District Collector, Chief Executive Officer of Special Purpose Vehicle (an SPV is created for implementation at the city level. Its role is to release funds, and implement, monitor and evaluate the Smart City development projects), member of Parliament, member of Legislative Assembly, Mayor, local youth, technical experts and representatives of the area Resident Welfare Association to advise and enable collaboration


The Smart Cities Mission in India is a centrally sponsored scheme. It also requires state governments and urban local bodies (ULBs) to contribute an equal amount for implementing projects under the Smart City Proposal (SCP). States are expected to seek funds for projects outlined in the Smart City Proposal from multiple sources including the following:

  • Using State/ULB’s resources (from collection of user fees, beneficiary charges & impact fees, land monetisation, debt, loans, etc.)
  • Deploying additional resources transferred due to acceptance of recommendations of the Fourteenth Finance Commission (FFC)
  • Utilising innovative finance mechanisms, such as municipal bonds with credit rating of ULBs, Pooled Finance Development Fund Scheme and Tax Increment Financing (TIF)
  • Leveraging borrowing from financial institutions including bilateral and multilateral institutions (both domestic and external sources)
  • Availing the National Investment and Infrastructure Fund (NIIF)

Convergence with Other Government Schemes

  • There is a strong similarity between the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities Mission in achieving urban transformation. While AMRUT follows a project-based approach, the Smart Cities Mission follows an area-based strategy.
  • Similarly, significant benefits can be derived by seeking integration of other Central & State Government Programmes/Schemes with the Smart Cities Mission.
  • At the planning stage, cities must seek convergence in the Smart City Proposal (SCP) with AMRUT, Swachh Bharat Mission (SBM), National Heritage City Development and Augmentation Yojana (HRIDAY), Digital India, Skill Development, Housing for All, Construction of Museums funded by the Culture Department and other programmes pertaining to social infrastructure such as Health, Education and Culture.

Countries Supporting India’s Smart Cities Mission

Leading economies worldwide have shown interest in India’s smart city mission and are looking forward to participate in the development of smart cities. These include Spain, the US, Germany, Japan, France, Singapore and Sweden.

  • Spain has proposed to cooperate with India to develop Delhi into smart cities. The Barcelona Regional Agency of Spain has shown an interest in exchanging technology with India.
  • The United States ‘Trade and Development Agency (USTDA) has decided to develop Visakhapatnam (Andhra Pradesh), Allahabad (Utta Pradesh) and Ajmer (Rajasthan) as smart cities.
  • Germany has inked a deal with India to develop Bhubaneswar (Odisha), Kochi (Kerala) and Coimbatore (Tamil Nadu) as smart cities.
  • Japan has decided to assist India with the development of Chennai, Ahmedabad and Varanasi as smart cities.
  • France has decided to support three Indian cities—Chandigarh, Lucknow and Puducherry—and announced an investment of US$ 1.5 billion (EUR 1.3 billion).
  • Singapore has shown an interest in helping India’s Smart City Mission and offered to help develop Amravati, the new capital of Andhra Pradesh, as a smart city. The country is also looking at re-engineering and upgrading the transportation sector and retrofitting the older Indian city.
  • Sweden, Israel, the Netherlands, the UK and Hong Kong have also shown interest in investing in India for developing smart cities.
  • Italy has shown interest in the smart city concept and decided to invest US$ 1.2 trillion over the next 20 years through numerous initiatives. The Italian companies will contribute in terms of design and technology for the smart cities, with services ranging from consultancy to actual construction of the infrastructure
  • Twenty cities across three Indian states—Punjab, Haryana and Rajasthan—are likely to have a fast-track development under a new Indo-Canadian initiative to train smart city planners on capacity building and governance, reform implementation, and water supply and sewerage among others. The proposal aims at training at least 150 official urban planners and designers and building localised platforms and tools for efficient and predictable planning and execution of smart cities.

What is the status of the projects?

  • As of March 3, 2023, the 100 cities have issued work orders for 7,799 projects worth Rs 1.80 lakh crore, the government told Parliament on March 13. Out of these, 5,399 projects worth Rs.1.02 lakh crore have been completed, and the rest are ongoing.
  • Only around 20 cities are likely to meet the June deadline; the rest will need more time. Cities selected in January and June 2018 have achieved 44% of their targets, while those selected in 2016 in the second round are not much farther ahead with 46% completion.
  • Shillong has completed just one of its 18 proposed projects.


Q. The purpose of the Smart Cities Mission is to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes. What is the present status of the Mission? Explain.