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Smart Cities Mission

Introduction
The 100 Smart Cities Mission in India was launched by Prime Minister Narendra Modi on June 25, 2015. Smart Cities Mission is an urban renewal and retrofitting programme launched by the Government of India to develop smart cities and make them citizen friendly and sustainable. The Union Ministry of Urban Development is responsible for implementing the mission in collaboration with state governments; this is expected to complete between 2019 and 2023.

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.

Smart Cities Mission in India
Vision:

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.

Objective:

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.

Coverage:

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.

Strategy:

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:

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.

Budget Allocation:

Under Union Budget 2021-22, the Smart Cities Mission in India has been allocated Rs. 6,450 crore (US$ 868 million) as compared to Rs. 3,400 crore (US$ 457 million) in FY21 (revised estimates).

Status Update:

The total allocated investments for the Smart City Mission stood at ~Rs. 205,018 crore (US$ 27.60 billion) as of March 2021. Of the total investments, 5,614 projects worth ~Rs. 173,018 crore (US$ 23.29 billion) have been tendered, work orders have been issued for 4,912 projects worth ~Rs. 139,851 crore (US$ 18.83 billion) and 2,420 projects worth ~Rs. 40,152 crore (US$ 5.40 billion) have been completed as of March 2021.

Conclusion
COVID-19 has affected almost the entire world, causing widespread disruptions in economies and healthcare services. But, the mission to develop 100 smart cities in India has seen an upturn in the months following the lockdown as funds utilisation has almost doubled.

One of the greatest challenges facing smart cities is how to finance them. Smart city infrastructure requires a large capital investment. The government is concentrating on encouraging Public-Private Partnerships (PPP) for successful implementation of the smart city project in India (at present, about 21% funding of the smart cities projects is via the PPP mode). For example, in June 2020, Sterlite Power entered a PPP agreement with the Gurugram Metropolitan Development Authority (GMDA) to build and maintain the fibre network in Gurugram Sub City 2 for 21 years.

India has over 4,000 urban local bodies and towns, and the opportunities are across core dimensions – housing, sanitation and cleanliness, livelihood, IT, health and education, transport, and environment, etc. Financial and IT services sectors are on the priority list of the government to garner investments as well as leading economies around the world have shown interest in the Smart City Mission.

The mission is indeed a smart and evolving move dependent on careful planning, proper implementation and continuous monitoring.