Smart Cities Mission (SCM), Objectives, Current Status

Context: Smart Cities Mission (SCM), a flagship programme of the NDA-1 government, has taken a back seat in this year’s list of poll promises and achievements.

Smart Cities Mission (SCM)

• Smart cities emerged post-2009 financial crash as urban areas akin to new Silicon Valleys, marked by extensive integration of airports, highways, and advanced ICT, forming intellectual cities.
• Initiated in June 2015 under the influence of global trends and the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the Smart Cities Mission (SCM) aimed to transform 100 cities over five years without a universally fixed definition, acknowledging that the concept could vary significantly based on local context and development levels.

What is the Smart Cities Mission (SCM)?

• The SCM focused on two aspects: area-based development (redevelopment, retrofitting, greenfield projects) and pan-city solutions based on ICT.
• Key areas included e-governance, waste management, water management, energy management, urban mobility, and skill development.

• The mission had a budget of ₹2 lakh crore of which 45 per cent is to be funded through Mission grants, 21 per cent through convergence, 21 per cent through PPP and the rest from other sources.
• Initially planned for completion in 2020, the mission was extended twice till June 2024.
• To implement the mission, a special purpose vehicle (SPV) led by bureaucrats or MNC representatives was established, sidelining traditional city governance structures.

Status of the SCM

• As of April 2024, 8,033 projects were sanctioned, but the total outlay fell to ₹1,67,875 crore, 16% less than projected.
• 5,533 projects worth ₹65,063 crore have been completed, while 921 projects worth ₹21,000 crore are ongoing.
• 400 projects in 10 cities are unlikely to meet the extended deadline of June 2024.
• PPP investments have been minimal, accounting for only 5% of the funding.

Where did the SCM Falter?

• Flawed Selection Process: The competitive selection of 100 cities ignored the diverse urban realities in India.
• Exclusionary Approach: The scheme focused on developing only a small percentage (less than 1%) of a city’s area, leading to exclusionary development.
• Insufficient Funding: The total budget of ₹1,67,875 crore was inadequate compared to the estimated $1.2 trillion needed to make Indian cities liveable by 2030.
• Governance Issues: The SPV model was not aligned with the 74th Constitutional Amendment and was criticised for being top-down and disconnected from local needs.
• Displacement and Flooding: The SCM led to the displacement of people from poorer areas and increased urban flooding due to infrastructure projects disrupting water channels.

Challenges in the Implementation of Mission

• Management: The Special Purpose Vehicles (SPVs) are not functioning well.
  • Inadequate understanding of data, and how to analyze it to provide effective solutions has also created difficulties.
  • Lack of coordination among multiple government departments.
• Financing Concern: Smart Cities Proposal Costs are very high compared to the average annual revenues of these municipal corporations.
  • Many smart cities have a poor investment credit rating.
  • Funds released by the state are lagging behind funds released by the Centre, and this may be due to excessive financial burden to release the committed funds for multiple cities, with poor financial status.
• Funding Discrimination: Financing in the public-private partnership mode was concentrated in commercial infrastructure, real estate, social infrastructure, energy and transport. Sectors like logistics, manufacturing and communications have received a meagre share of PPP funds.
• Poor Outcome: Despite initiatives for climate resilience and environmental sustenance, many Indian cities continue to be plagued with air pollution, extreme temperatures, poor water and waste management systems and sanitation.
• Lack of citizen participation in decision-making about projects to be implemented.
• Exclusionary Bias: Meagre share of expenditure on projects for the welfare of poorer and marginal groups, especially in area-based development projects.
• Security of Data: Smart cities rely on sensors and network-connected devices and systems that generate large volumes of data, which are vulnerable to hacking by cyber criminals who can steal confidential data, shut down access to essential resources, and gain illegal access to security cameras.
• Transport: Urbanizing public transport for urban mobility is a challenge for the government due to the inadequate transport system currently persisting in the cities.
  • Various factors like lack of investment, high population density, zoning, and poor urban planning have been making the transit system in Indian cities inadequate.

Special Purpose Vehicle (SPV)

• Implementation of the Mission at the City level will be done by a Special Purpose Vehicle (SPV) created for the purpose.
• The SPV will plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the Smart City development projects.

Way Forward

• The Mission should be a long-term programme, not only a five-year programme as most of the cities cannot perform the best within this time frame.
• To meet the city’s requirements, more projects should be identified. There are many smart cities whose drainage issues are not yet solved.
• Training programmes should be organised to build the managerial and financial capacities of the staff employed by the SPVs and urban local bodies.
• For the mobilization of funds, more revenue should be generated through taxation. The fund transfer process should also be made accessible.
• Greater efforts should be made to maintain infrastructure assets created under the Mission.
• The role of the Integrated Command and Control Centres in cities should be expanded.
• All these cities should be secured by cyber security- ensuring data security and encryption.

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