Smart City Mission

Smart City Mission

Smart City 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.

Features of Smart Cities-:

 There are three salient features of the smart city conceived in India. They are –

  • Competitiveness refers to a city’s ability to create employment opportunities and attract investments, experts, professionals, and people. The ease of being able to do business and the quality of life it offers determines its competitiveness.
  • Sustainability includes social sustainability, environmental sustainability, and financial sustainability.
  • Quality of Life includes safety and security, inclusiveness, entertainment, ease of seeking and obtaining public services, cost-efficient healthcare, quality education, transparency, accountability, and opportunities for participation in governance.


Smart City 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 in urban population and rapid expansion of areas, the 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 optimize resources and maximize services to citizens.


  • Is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment, and application of ‘Smart’ Solutions.
  • The Smart Cities Mission is meant to set examples that can be replicated both within and outside the Smart City, catalyzing the creation of similar Smart Cities in various regions and parts of the country

Core infrastructure elements in a Smart City would include:

  • 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 digitalization
  • Good governance, especially e-governance, and citizen participation
  • Sustainable environment
  • Safety and security of citizens, particularly women, children, and the elderly
  • Health and education

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 center 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 a collection of user fees, beneficiary charges & impact fees, land monetization, 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 Schemes, 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)

Challenges of the Smart City project:

  • Implementation has been the weakest link of urban infrastructure projects. Nearly 54 percent of such projects taken up in major cities under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) are yet to be completed. The same could be the fate with Smart Cities.
  • JNNURM partially relied on private sector investments to speed up its implementation. However, private investors refused to come forward. Out of 2,900 JNNURM projects, only 50 projects were backed by the PPP model, with a private sector capital investment of just about Rs. 1,000 crore, which barely covered 0.2 percent of the total project cost.
  • The total estimate of investment requirements for the smart city comes to Rs 7 lakh crore over 20 years which translates into Rs.35000 crore annually. Raising this capital from private players will require huge efforts on the part of the government.
  • Most ULBs have limited technical capacity to ensure timely and cost-effective implementation and subsequent operations and maintenance of smart city projects owing to limited recruitment over a number of years along with the inability of the ULBs to attract the best talent at market-competitive compensation rates
  • For timely completion of the project, all clearances should use online processes and be cleared in a timebound manner. Considering the delays in earlier projects it’s challenging to secure timely clearances.
  • Building capacity for 100 smart cities is not an easy task and most ambitious projects are delayed owing to a lack of quality manpower, both at the central and state levels. The allocation made for capacity building is meager compared to the requirement over the next five years.

Related Links:

AMRUT MissionHRIDAY Scheme
FAME IndiaProduction Linked Incentive (PLI) Schemes