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.

About the Mission

• The Smart Cities Mission was launched in 2015. 
• The main objective of the Mission is to promote cities that provide core infrastructure, clean and sustainable environment and give a decent quality of life to their citizens through the application of ‘smart solutions’. 

• The Mission aims to drive economic growth and improve quality of life through comprehensive work on social, economic, physical and institutional pillars of the city. 
• The focus is on sustainable and inclusive development by creation of replicable models which act as lighthouses 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. 
• Each State/UT will have a certain number of potential Smart Cities, with each State/UT having at least one.

Funding

• The Mission is operated as a Centrally Sponsored Scheme. The Central Government gives financial support on an average Rs.100 crore per city per year.  An equal amount on a matching basis is to be provided by the State/Urban Local Bodies (ULBs).  
• Additional resources are to be raised through convergence, from ULBs’ own funds, grants under Finance Commission, innovative finance mechanisms such as Municipal Bonds, other government programs and borrowings. 
• Emphasis has been given on the participation of the private sector through Public Private Partnerships (PPP). 

What are Smart Cities?

• There is no standard definition or template of a smart city. 
• In the context of our country, the six fundamental principles on which the concept of Smart Cities is based are:

Implementation by Special Purpose Vehicle (SPV)

• The 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. 
• Each Smart City will have a SPV which will be headed by a full time CEO and have nominees of Central Government, State Government and ULB on its Board. 
• The SPV will be a limited company incorporated under the Companies Act, 2013 at the city-level, in which the State/UT and the ULB will be the promoters having 50:50 equity shareholding.