What is Smart Cities Mission?

The Smart Cities Mission is a major urban renewal program launched by the Government to develop and upgrade living conditions and infrastructure in selected 100 cities across the country.

Objective of the programme is to modernize cities by providing core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions. The programme was officially launched on 24th of June 2016 and in the first phase, 20 cities will get funding for converting them into smart cities. In the next two years, the remaining cities will also participate in the project. Ministry of Urban Development is the anchoring agency for the implementation of the project.

According to the smart cities mission, “A ‘smart city’ is an urban region that is highly advanced in terms of overall infrastructure, sustainable real estate, communications and market viability. It is a city where information technology is the principal infrastructure and the basis for providing essential services to residents.”

The main focus of the project is the area based development of cities by transforming existing areas through retrofitting and redevelopment. Selected areas including slums will be modified and living conditions will be improved by setting better amenities and services. Another component of the smart cities project is the development of new areas. Greenfield or new areas will be developed around cities in order to accommodate the expanding population in the smart cities.

Similarly, adoption of Smart Solutions with the use technology, information and data are expected to improve infrastructure and services under the project.

Financing of smart cities mission

Financing of the mission will be collaboratively done by the Centre, state and local bodies. Fund from the private sector will be invited and Public Private Partnerships will support the project financially.

The most vital contribution will be provided by the centre as it will provide Rs. 48,000 crores over five years i.e. on an average Rs. 100 crore per city per year. Matching the center’s contribution, an equal amount will be made by the State/ULBs. Altogether nearly one lakh crore rupees from government sources will be available for Smart Cities Project.

In addition to the Centre/state/ULB funding, funds from other sources including user charges, PPP, fourteenth finance commission awards, municipal bonds, multilateral and bilateral borrowings, NIIF funding, and use of funds from various government schemes will also be used.

For the implementation of the project each city should form a dedicated Special Purpose Vehicle (SPV). The SPV will plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate various projects. Each smart city will have an SPV and it will be headed by a full time CEO and have nominees of Centre and State governments and ULBs on its Board.