The primary objective of the Mission is to develop cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment, and apply ‘smart’ solutions.
However, the Mission document does not provide one definition of a Smart City. Instead, it allows cities to come up with their own solutions of what they identify as a Smart City.
The guidelines suggest that the core infrastructure elements in a Smart City will include:
Adequate water supply
Assured electricity supply
Sanitation, including solid waste management
Efficient urban mobility and public transport
Affordable housing
Robust IT connectivity
Good governance
‘Smart’ solutions may include (i) energy efficient buildings, (ii) electronic service delivery, (iii) intelligent traffic management, (iv) smart metering, (v) citizen engagement, etc.
How were the Smart Cities selected?
The Mission was introduced in the form of a competition, called the Smart City challenge.
The first stage was in July 2015 when states nominated their cities for the competition.
In August 2015, the Ministry of Urban Development selected 100 of those cities to participate in the competition.
These cities were required to develop their smart city plans (SCPs) and compete against each other.
The SCPs were evaluated on the basis of the solutions, the processes followed, the feasibility and cost effectiveness of the plans, and citizen engagement.
Over the last 2 years, the Ministry has announced winner cities in batches.So far, 99 cities have been selected under the Mission.
What information do these SCPs contain?
The cities had to prepare their SCPs with two primary strategic components: (i) area-based development, and (ii) pan-city development.
The area-based development would cover a particular area of the city, and could have either a redevelopment model, or be a completely new development.Pan-city development would envisage application of certain smart solutions across the city to the existing infrastructure.
Each city had to formulate its own concept, vision, mission and plan for a Smart City that was appropriate to its local context and resources.The Ministry of Urban Development provided technical assistance, through consultancy firms, to cities for helping them prepare these strategic documents.
How will the Mission be implemented?
The Mission will be implemented at the city level by a Special Purpose Vehicle (SPV).The SPV will plan, approve, release funds, implement, manage, monitor, and evaluate the Smart City development projects.
The SPV will be a limited company incorporated under the Companies Act, 2013 at the city-level.It will be chaired by the Collector/ Municipal Commissioner of the Urban Development Authority.The respective state and the Urban Local Body (ULB or municipality) will be the promoters in this company having 50:50 equity shareholding.
How are the Plans getting financed?
The Mission will be operated as a Centrally Sponsored Scheme.The Central Government will provide financial support of up to Rs 48,000 crore over five years, that is, an average of Rs 500 crore per city.
The states and ULBs will have to contribute an equal amount.The central government allocated Rs 4,000 crore towards the Mission in the 2017-18 budget.
Since funding from the government will meet only a part of the funding required, the rest will have to be raised from other sources including: (i) States/ ULBs own resources from collection of user fees, land monetization, etc., (ii) innovative finance mechanisms such as municipal bonds, (iii) leverage borrowings from financial institutions (such as banks), and (iv) the private sector through Public Private Partnerships (PPPs).
The total cost of projects proposed under the various SCPs of the 90 winner cities is Rs 1.9 lakh crore.
About 42% of this amount will come from central and state funding, 23% through private investments and PPPs, and 19% through convergence with other schemes (such as HRIDAY, AMRUT, Swachh Bharat-Urban).The remaining will be generated by the cities through the levy of local taxes, and user fees.
AMRUT
Atal Mission for Rejuvenation and Urban Transformation (AMRUT) was launched on 25.06.2015 to improve basic urban infrastructure in 500 cities/towns which would be known as Mission cities/ towns.
The Mission is being operated for five years from financial year 2015–16 to 2019–20 and aims to cover all cities and towns with a population of over one lakh with notified Municipalities, including Cantonment Boards (civilian areas) and certain other cities like capital towns, some cities on stem of main rivers and tourist and hill destinations.
The components which are to be covered under the Mission are: water supply, sewerage, septage, storm water drains, urban transport, in particular, with the focus on facilities for non-motorised transport and development of green space and parks with special provision for children-friendly components in 500 cities & towns.
HRIDAY
The Government launched the National Heritage City Development and Augmentation Yojana (HRIDAY) scheme on 21st January, 2015, with a focus on holistic development of heritage cities.
The scheme aims to preserve and revitalise soul of the heritage city to reflect the city’s unique character by encouraging aesthetically appealing, accessible, informative and secured environment. With a duration of4 years (completing in November 2018) and a total outlay of Rs. 500 crore, the scheme is being implemented in 12 identified cities namely, Ajmer, Amaravati, Amritsar, Badami, Dwarka, Gaya, Kanchipuram, Mathura, Puri, Varanasi, Velankanni and Warangal.
The scheme is being implemented in a mission mode.
Municipal Bonds
In July, 2015, the Securities and Exchange Board of India (SEBI) notified a new regulatory framework - Issue and Listing of Debt Securities by Municipalities Regulations - for issuing municipal bonds in India.
The new regulations allowed for municipal bodies or a corporate municipal entity to issue municipal bonds through private placement or public issue.
Municipal bonds can be one among the options for the massive investment requirement in the urban infrastructure.
