Smart Cities Mission
Topic: Urban Local Government: Municipalities and Cities · NCERT: Beyond NCERT
Meaning
The Smart Cities Mission (SCM) was a Central urban mission launched on 25 June 2015. Under it, 100 cities were picked through a competition. Each city then upgraded one part of its area (area-based development) and used technology across the whole city (pan-city solutions). The work was run by a company called a special purpose vehicle (SPV). The mission formally ended on 31 March 2025.
It matters because it shows a big trade-off in Indian city government. Projects got done faster through companies, but those companies stood outside the elected municipal council that the 74th Amendment set up.
Explanation
How cities were chosen: the "challenge" method
- 100 cities were selected in rounds of competition.
- Each city wrote its own proposal and bid against other cities.
- Money was not shared out by a fixed formula. A city had to win its place.
- This was new. Earlier missions had a fixed list of cities. For example, JNNURM had a fixed list of 65 mission cities [1].
Two kinds of project
- Area-based development: upgrading one part of a city. It could take three forms:
- Retrofitting: improving an area that already exists.
- Redevelopment: pulling down an old area and building it again.
-
Greenfield: building a new area on empty land.
-
Pan-city solutions: technology used across the whole city.
- Example: the Integrated Command and Control Centre (ICCC). It is one control room that watches traffic, CCTV, water and waste in real time.
Who ran it: the SPV
- Each city's projects were run by an SPV. This is a company incorporated under the Companies Act, 2013.
- The state and the urban local body (ULB), meaning the elected city government, own the SPV in equal shares.
- A CEO runs it day to day.
- The SPV is not a statutory body. No special law of Parliament or a state legislature created it. It is an ordinary company.
- Why this matters:
- The SPV takes the decisions, not the elected council.
- Critics say this goes around the municipal council and the mayor.
Limits and end
- The mission was designed by the Centre. The Ministry of Housing and Urban Affairs (MoHUA) set the goals and rules, and money depended on following them.
- It formally ended on 31 March 2025. This leaves an open question: what happens to the SPVs and the assets they built?
In the Constitution and practice
- No article of the Constitution sets up the Smart Cities Mission. It is a Central government scheme. But it works inside the constitutional system for city government:
- The 74th Amendment Act, 1992 came into force on 1 June 1993. It added Part IXA ("The Municipalities") and gave ULBs constitutional status [1].
- Article 243W and the Twelfth Schedule list 18 subjects, such as urban planning, water supply and slum improvement. States may hand these to municipalities. They do not have to.
-
Because the transfer was optional, many states kept power for themselves. The Centre answered with missions: schemes that carry Central money with conditions attached.
-
Legal form of the SPV: a company under the Companies Act, 2013. It is not a body created by the Constitution or by a municipal law.
- Launched together: SCM, AMRUT and PMAY-U were all launched on 25 June 2015.
- How it worked in practice:
- Gains: it built assets such as command centres, created new data and capacity, and delivered projects quickly through a separate budget kept only for the mission.
-
Costs: it can sideline elected councils and mayors. This weakens the idea in Article 243W that municipalities are "institutions of self-government", meaning bodies that govern themselves. ULBs end up carrying out Central plans instead of making their own.
-
Same pattern as before: JNNURM also had projects run by parastatals (state-run agencies, such as water boards, that the elected council does not control). The CAG reported this in its performance audit, Report No. 15 of 2012-13 [1].
Don't confuse with
- AMRUT: AMRUT covers 500 cities, focuses on water supply, sewerage and green spaces, and works through a State Annual Action Plan. SCM covers 100 cities chosen by challenge and works through SPVs.
- JNNURM (2005–2014): JNNURM covered 65 mission cities with a fixed list. It released Central money in instalments, depending on reforms [1]. SCM picked cities by competition and used company-form SPVs.
- SPV vs. municipal corporation: a municipal corporation is an elected body under Part IXA, and voters can remove its members. An SPV is a company under the Companies Act, 2013 run by a CEO, and voters cannot remove that CEO.
- SBM-U 2.0 / AMRUT 2.0: both were launched on 1 October 2021 and run until 2025-26 [2]. SCM was launched on 25 June 2015 and ended on 31 March 2025. There was never an "SCM 2.0".
Prelims Hooks
- The Smart Cities Mission was launched on 25 June 2015, the same day as AMRUT and PMAY-U.
- 100 cities were chosen through a challenge (competition), not by a fixed formula.
- Smart City SPVs are companies under the Companies Act, 2013. The state and the ULB own them in equal shares, and a CEO runs them. They are not statutory bodies.
- There are two project types: area-based development (retrofitting, redevelopment, greenfield) and pan-city solutions (for example the ICCC).
- The mission formally ended on 31 March 2025.
- Trap: "100 cities" is SCM. "500 cities" is AMRUT. "65 mission cities" is JNNURM [1].
Mains Points
- SPVs vs. elected councils:
- SPVs bring speed, technical skill and a ring-fenced budget (money kept only for the mission).
- But they weaken democratic accountability, because citizens cannot vote out a CEO. This sits uneasily with the idea of "institutions of self-government" in Article 243W and Part IXA.
-
Reform: now that the mission has ended, fold SPV work back into ULBs and give mayors real executive power.
-
Central missions vs. real decentralisation:
- SCM was designed by the Centre, and money depended on following its rules. Cities carried out Central plans instead of making their own.
-
Lasting change needs states to hand ULBs the 3Fs (funds, functions and functionaries, meaning staff) under Article 243W and the Twelfth Schedule.
-
Assets need upkeep:
- SCM built command centres and other assets.
- Without ULB capacity and their own revenue, no one may look after these assets once mission money stops. This lesson applies to all outcome-based missions.