IAS Gyan

Daily News Analysis


25th May, 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.

Smart Cities Mission


  • Smart Cities Mission is an initiative by the Indian Government to improve people's living quality in cities and towns by using best practices, information and digital technology, and more public-private partnerships.


  • The Smart Cities Mission is an initiative of the Union Housing and Urban Affairs Ministry.


  • It was launched on June 25, 2015.


  • 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 the 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.

Financing of Smart City Mission

  • In total, the government has funded a sum of Rs 7,20,000 crore.
  • On average Rs 100 crore per city over the five years.
  • The scheme will be operated as a Centrally Sponsored Scheme (CSS) on a 50:50 model, meaning Rs 50 crore will be contributed by the centre and Rs 50 crore by the state government or Union Territories.
  • 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)


  • The Union Ministry of Urban Development is responsible for implementing the mission.
  • Also, a Special Purpose Vehicle (SPV) in each state is created, headed by the CEO; they look after the implementation of the mission.


  • 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.

Need for The Mission

  • Cities accommodate ~31% of India's current population and contribute 63% to the GDP (Census 2011).
  • By 2030, urban areas are expected to accommodate 40% of India's population and contribute 75% to the GDP.
  • Population growth in cities leads to infrastructure management and service delivery challenges.
  • The Smart Cities Mission in India is an initiative that aims to efficiently and effectively tackle these challenges.

Features of Smart City Mission in India

  • It promotes mixed land use as per the area. With the mission, the states will have more flexibility to use the land for various purposes and make bye-laws as per the change. However, the fulfilment of environmental safeguards will be taken care of.
  • It aims to expand housing opportunities for everyone. Housing is one of the essential requirements for the growth of the Smart Cities Mission. Smart cities require more housing projects to cater to large and lower-income demographics.
  • Smart Cities Mission visions to reduce congestion, ensure security, reduce air pollution and promote interaction and local economy. New way pedestrians are built for walkers and cyclists to reduce accidents.
  • Development of playgrounds, parks, open gyms and other recreational spaces is another objective. This is done to enhance the quality of life for Indian citizens.
  • More transport options are promoted, like transit-oriented development (TOD) and public transport.
  • To bring transparency and accountability in governance, more online services are launched. For example, a citizen can use an online website instead of going to the municipal offices.
  • Identity is provided to the city based on the education sector, health sector, local cuisine, sports, culture, art, furniture
  • Smart Solutions are applied to infrastructure and services for area development.

Smart Solution of Smart Cities Mission

Under the mission smart solutions are being used for the basic infrastructure like:

  • Public information and grievance redressal.
  • Electronic service delivery.
  • Citizens-city’s eye and ear.
  • Video crime monitoring.
  • Citizen engagement.
  • Waste to compost.
  • Waste to energy and fuel.
  • Every drop to be treated.
  • Treatment of C&D waste.
  • Smart meters and management for water and electricity.
  • Leakage identification.
  • Water quality monitoring.
  • Renewable source of energy.
  • Energy efficiency and green buildings.
  • Smart parking.
  • Intelligent Traffic management system.
  • Integrated multi-modal transport.
  • Tele-medicine.
  • Trade facilitation centre.
  • Skill Development Centres.

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.
  • 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

Recommendations for Smart Cities Mission

There are a few recommendations that can help achieve more significant benefits from the mission:

  • It should be a long-term program, not only a five-year program as most of the cities cannot perform the best within this time frame.
  • To meet the city requirement, more projects should be identified. There are many smart cities whose drainage issue is not yet solved.
  • Studies should be done on why a single project has not been completed in cities like Amaravati, Bhagalpur, Muzaffarpur, and Shillong.
  • For the mobilization of funds, more revenue should be generated through taxation. The fund transfer process should also be made accessible.
  • All these cities should be secured by cyber security- ensuring data security and encryption.


Q. Smart Cities Mission is arguably the largest and most complex urbanization initiative that could be a game-changer in the urban transformation of our country. Do you agree?