Smart Cities vision derailed by poor execution, shifting priorities
Jumping to new initiatives without completing the previous one is a recipe for failure; the unfinished business of Smart Cities casts doubt on effectiveness of any new schemes
The much-celebrated Smart Cities Mission (SCM) is set to wind down by March 2025, with a drastic budget cut of 70 per cent, leaving just Rs 2,400 crore from the revised estimates of 2023-24.
The Union government attributes this reduction to the nearing completion of projects, yet this explanation rings hollow when considering the broader context.
While the government may have released the last tranche of the Rs 48,000 crore budgeted for the mission, the reality is far more disheartening.
Why SCM derailed
The SCM, envisioned as a revolutionary initiative to transform urban India, has faltered primarily due to inconsistent commitment, poor execution and an alarming lack of strategic follow-through.
The government's attention seems to have already shifted, as evidenced by the recent introduction of a new urban development scheme – the transit-oriented development plan for 14 large cities, along with a framework for creative city redevelopment. These initiatives follow the "Ease of Living in Cities" index, launched last year.
While the new programmes may sound promising, they raise serious questions about the government's approach.
Promise and reality
Jumping from one initiative to another without fully committing to or executing the previous one is a recipe for failure. The unfinished business of the Smart Cities Mission looms large, casting doubt on the effectiveness of any new schemes.
Launched with great fanfare in 2015, the SCM was envisioned as a revolutionary step towards urban modernisation. It aimed to enhance the quality of life in cities by integrating cutting-edge infrastructure and technology, making urban spaces more efficient, sustainable and liveable. The mission targeted 100 cities across India, each tasked with developing a Smart City Plan (SCP) that outlined their unique vision for achieving these goals.
However, despite the ambitious objectives, the SCM has struggled to deliver its promises. The mission has been marred by poor planning, inconsistent commitment and inadequate execution, leading to sluggish progress in many cities.
Failures in cities
According to reports, many cities have failed to complete even half of their planned projects, with numerous initiatives stalled at the work order stage. This slow pace of progress has highlighted a significant lack of capacity to manage large-scale budgets, particularly in smaller or north-eastern cities, where the challenges are even more pronounced.
One of the most critical issues plaguing the SCM has been financial mismanagement. The mission was designed as a centrally sponsored scheme, with the Union government providing financial support of up to Rs 48,000 crore over five years, an average of Rs 500 crore per city.
This funding was matched by contributions from state governments and urban local bodies (ULBs), with additional funds raised through innovative financing mechanisms such as public-private partnerships (PPPs), municipal bonds and land monetisation.
Shortfall in fiscal contributions
However, the reality has been far from ideal. State contributions have often failed to match those of the Union government, creating a funding shortfall that has impeded progress.
According to an India Spend report, between 2015 and 2022, the states’ cumulative contribution to the SCM was Rs 32,149.14 crore against the Union government’s Rs 36,561.16 crore – a deficit of Rs 4,481.82 crore. This financial discrepancy has stalled many projects, particularly in cities with limited financial autonomy and capacity to raise additional revenue.
In its February 2024 report, the Standing Committee on Housing and Urban Affairs expressed deep dissatisfaction with the SCM's progress. Its report noted that many smart cities did not have the capacity to plan and spend thousands of crores on projects.
Special Purpose Vehicles
As of December 2023, 47 per cent of projects in the 20 bottom-ranking cities were still at the work order stage. The committee recommended that the government reassess its strategies and improve oversight to ensure the completion of ongoing projects.
The SCM was to be implemented at the city level through Special Purpose Vehicles (SPVs), responsible for planning, approving, releasing funds, implementing, managing, monitoring, and evaluating Smart City development projects. This approach was intended to ensure that each city could tailor its projects to its local context and resources.
However, the reliance on external consultants and international technology has added to the costs and delays, complicating an already troubled mission.
Poor community engagement
Moreover, the mission has suffered from poor community engagement. The SCM’s top-down approach often overlooked the needs and interests of the very people it was supposed to benefit.
This disconnect between planners and residents resulted in projects that were out of sync with the community's needs.
The lack of transparency in project selection and fund allocation further fuelled accusations of corruption and mismanagement, tarnishing the SCM’s reputation and diminishing its impact.
The way forward
The SCM is a cautionary tale of what can happen when a solid commitment to execution does not back ambitious visions. The SCM's shortcomings underscore the need for thorough planning, strong community engagement, and fool-proof execution strategies in future urban development initiatives.
Without these, the SCM will remain another unfinished chapter in India’s urban development story.
As the government moves on to new initiatives, ensuring that the lessons learned from the SCM are not forgotten is crucial. The success of any urban development programme hinges on its ability to deliver tangible benefits to the people it is meant to serve.