Urban policy: Smart Cities Mission, AMRUT and housing

Detail

1. Why India needs an urban policy

• India's towns have grown in layers:
• Ancient towns grew up as religious or political centres. Examples are Varanasi and Prayagraj (Uttar Pradesh), Pataliputra (today's Patna, Bihar) and Madurai (Tamil Nadu).
• Medieval towns grew as fort and capital towns.

• Colonial towns grew as ports, administrative centres and hill stations.

• Most modern towns grew without planning. Common problems are:

• too little water and sewerage
• slums
• traffic jams

• flooding

• Since 2005, the Union government has run missions for cities. A mission is a centrally funded programme with fixed goals and deadlines.

• JNNURM (Jawaharlal Nehru National Urban Renewal Mission) ran from 2005 to 2014.
• In 2015 it was replaced by several separate missions: Smart Cities Mission, AMRUT, PMAY-Urban and HRIDAY.

2. Smart Cities Mission (SCM)

Definition: The Smart Cities Mission is a Union mission of the Ministry of Housing and Urban Affairs (MoHUA). It aims to give cities:

• core infrastructure (basic services such as water, power, roads and sanitation)
• a clean and sustainable environment
• a decent quality of life

It does this through "smart solutions". These use technology and data to:

• make cities safer from disasters
• use fewer resources such as water and energy

• make services cheaper

• Launch: 25 June 2015, by the Prime Minister [2]. NCERT Class 12 discusses it in a box.

• "Lighthouse" approach: each city develops a small, compact area first. This area is a working model that other parts of the city, and other cities, can copy.
• PIB calls these areas "replicable models for other parts of the city".
• Citizens took part in choosing them [2].

Selection: challenge competition

• A challenge competition is a contest where cities send in plans. The best plans win central money.
• 100 cities were chosen in rounds between 2016 and 2018.
• PIB calls this competitive federalism: states and cities compete for central funds [2].

Two kinds of projects

Type	Meaning	Example
Area-Based Development (ABD)	Work in one marked-out part of the city	Market redevelopment, waterfronts
– Retrofitting	Upgrade an area that is already built up, without pulling it down	Adding ducts, footpaths and smart meters to an old area
– Redevelopment	Pull down and rebuild an old, run-down area at higher density	Rebuilding old markets
– Greenfield	Build a new area on empty land	New township on the edge of a city
Pan-city projects	Technology solutions for the whole city, mostly ICT (information and communication technology)	Smart traffic signals, CCTV, e-governance

Delivery

• Special Purpose Vehicle (SPV): a company set up under the Companies Act for each city to plan and carry out projects. The state and the city own it together. It works apart from the elected municipal council [2].
• Integrated Command and Control Centre (ICCC): a city "control room" that collects live data on traffic, water, waste and CCTV.
• All 100 smart cities had working ICCCs by November 2024 [2].
• During COVID-19 the ICCCs worked as COVID war rooms [2].

Progress (official figures)

• Projects:
• 7,380 of 8,075 projects completed (91%), worth ₹1,47,704 crore, as of December 2024 [2].

• Total portfolio of about 8,000 projects worth about ₹1,65,000 crore (December 2024) [3].

• Central budget:

• ₹48,000 crore allocated.
• ₹46,419 crore released.

• ₹44,545 crore used by cities (December 2024) [3].

• Outputs (November 2024):

• over 84,000 CCTV cameras
• 1,740 km of smart roads
• 713 km of cycle tracks
• 9,433 smart classrooms

• 17,026 km of water pipelines watched through SCADA (Supervisory Control and Data Acquisition: remote sensors that track flow and leaks). This cuts non-revenue water, meaning water that is lost or not billed [2].

• Heritage and housing:

• 55 cities conserved 484 heritage monuments.

• 23 cities built 35,000 affordable housing units [3].

• Private investment:

• Only 199 projects worth about ₹9,200 crore were run as PPP (public–private partnership) [3].

• This is a small share of the total. Private money came in below hopes.

• Deadline and closure:

• The deadline was extended to March 2025 [7].
• The mission formally closed on 31 March 2025.
• MoHUA then issued an advisory on repurposing (re-using) the city SPVs for new work [8].

Criticism

• Enclave bias:
• ABD areas cover only a small part of each city.

• So the benefits stay in small pockets, not across the whole city.

• Bypasses local democracy:

• SPVs are company boards, not elected councils.

• This weakens the 74th Constitutional Amendment (1992), which made municipalities the elected third tier of government and gave them 18 functions in the Twelfth Schedule.

• Slow spending: the mission was meant to end in 2020 but was extended many times, to 2025.

• Technology over basics: CCTV and dashboards were sometimes chosen over water, drains and housing.

3. AMRUT and AMRUT 2.0

Definition: AMRUT (Atal Mission for Rejuvenation and Urban Transformation) is a centrally sponsored scheme. That means the Union and the states share the cost. It gives basic services to cities, with water supply and sewerage at the top of the list [4].

• Launch: 25 June 2015, the same day as SCM [4]. (NCERT: June 2015)
• Coverage:
• 500 cities, roughly all towns with 1 lakh or more people.

• After mergers, the number is now 485 [4].

• Fund sharing: funds go to states and UTs according to their urban population and number of towns [4].

• Three aims [4]: 1. Give every household a tap with assured water supply and a sewerage connection. 2. Make cities more pleasant with greenery and open spaces such as parks. 3. Cut pollution through public transport and non-motorised transport (walking and cycling).

• Components [4]:

• water supply (including special supply for hill and coastal cities and for areas with arsenic or fluoride in their water)
• sewerage and septage management (septage is the sludge collected from septic tanks)
• storm-water drains to stop flooding
• urban transport (buses, BRTS, ferry vessels, footpaths, multi-level parking)
• parks (up to 2.5% of project cost)

• capacity building (training)

• AMRUT-1 money:

• State Annual Action Plans worth ₹77,640 crore approved.
• Central assistance committed: ₹35,990 crore [4].

AMRUT 2.0 (launched 1 October 2021) [4]

• Covers all Urban Local Bodies (ULBs). ULBs are municipal corporations, municipalities and nagar panchayats.
• Water supply:
• Universal tap-water coverage in all statutory towns, about 4,700 towns [5].

• A statutory town is a place declared urban by state law and run by a ULB.

• Sewerage: universal sewerage and septage coverage in the original 500 AMRUT cities [4].

• Targets: 2.68 crore tap connections and 2.64 crore sewer connections [5].
• Outlay: ₹2,99,000 crore in total, with a central share of ₹76,760 crore, over five years [4].
• Water-body rejuvenation (reviving lakes and ponds) links to groundwater recharge (see water-resources-india).
• 3,032 water bodies over 1.09 lakh acres approved [4].

• 544 water bodies over 9,511 acres rejuvenated [4].

• "Jal Hi AMRIT": rewards states that run sewage treatment plants well, so that treated water is safely reused [4].

• Technology Sub-Mission: 120 start-ups were matched to 82 AMRUT cities for pilot projects [4].

Ten-year results of AMRUT + AMRUT 2.0 (June 2025) [4]

• 2.03 crore tap connections and 1.50 crore sewer connections provided.
• 14,828 projects worth ₹2,73,649 crore sanctioned. Works worth about ₹1,12,368 crore completed.
• 99 lakh LED streetlights. They save 666 crore kWh of power and cut 46 lakh tonnes of CO₂ each year.
• Municipal bonds: 13 ULBs raised ₹4,984 crore. A municipal bond is a loan a city raises from the market by selling bonds.

Feature	Smart Cities Mission	AMRUT
Launch	25 June 2015	25 June 2015 (2.0: 1 Oct 2021)
Cities	100 (challenge)	500 (now 485). 2.0 covers all statutory towns
Focus	Model areas + ICT	Water, sewerage, drains, parks
Delivery	SPV company	ULBs through State Annual Action Plans
Scale of area	Small part of city	Whole city network

4. Housing: Pradhan Mantri Awas Yojana (PMAY)

Definition: PMAY is the Union's "Housing for All" scheme. It gives money to poor and middle-income families so they can build or buy a pucca house (a house with permanent walls and roof).

Scheme	Start	Key facts
PMAY-Urban	June 2015	125.31 lakh houses sanctioned, 98.1 lakh completed or handed over (May 2026) [6]
PMAY-Urban 2.0	Effective September 2024 [6]	1 crore more urban families over five years, to 2028-29 [6]. (NCERT: 2024)
PMAY-Gramin	2016	Replaced Indira Awas Yojana (rural housing since 1985–86)

• Housing paradox:
• India has a large urban housing shortage.
• Yet many houses stand empty, often because:
  • they are far from jobs
  • they lack water or transport
  • they are held as investments

5. Other urban schemes

• JNNURM (2005–14):
• Large grants for urban infrastructure and housing for the urban poor.

• Grants were tied to reforms such as repealing urban land-ceiling laws.

• HRIDAY (2015): National Heritage City Development and Augmentation Yojana. It revived the heritage areas of selected cities such as Varanasi, Amritsar and Ajmer.

• PRASHAD: a scheme that improves facilities at pilgrimage and heritage sites.
• Swachh Bharat Mission-Urban:
• SBM-U began on 2 October 2014 and targeted open-defecation-free cities and solid-waste management.
• SBM-U 2.0 began on 1 October 2021, launched together with AMRUT 2.0 [9].

6. Questions to weigh (evaluation frame)

• Missions vs the 74th Amendment:
• Central missions choose projects and fund them through SPVs or state plans.
• The 74th Amendment wanted elected ULBs to plan their own cities.

• Missions can therefore weaken local self-government (see urban-local-government).

• Census towns left out:

• A census town is a place with at least 5,000 people, at least 400 people per sq km, and at least 75% of male main workers outside farming. It is still run as a village panchayat.

• Census 2011 counted 3,894 census towns. Many urban schemes reach only statutory towns, so these urban places miss out.

• Metros vs small and medium towns:

• Most money flows to the big cities.

• Giving priority to small and medium towns could slow migration to metros and spread growth more evenly across regions (see planning-sustainable-development).

• Housing shortage vs vacant stock: building more houses does not help if they stand empty far from jobs.

• Urban finance, municipal bonds and the economics of housing are covered in the economy subject.

Prelims Hooks

• Smart Cities Mission, AMRUT and PMAY-Urban were all launched in June 2015. SCM and AMRUT were both launched on 25 June 2015 [2][4].
• AMRUT 2.0 and SBM-Urban 2.0 were both launched on 1 October 2021 [4][9].
• SCM city selection used a challenge competition. Each city's projects were carried out by a Special Purpose Vehicle, not the municipal council.
• Three ABD types:
• retrofitting: upgrade what exists
• redevelopment: rebuild

• greenfield: build on empty land

• All 100 smart cities have an ICCC. ICCCs worked as COVID war rooms [2].

• AMRUT 2.0 targets: tap water in all statutory towns (~4,700) and sewerage in the 500 AMRUT cities [4][5].
• PMAY-Gramin (2016) replaced Indira Awas Yojana. Trap: PMAY-Urban started earlier, in 2015.
• HRIDAY is for heritage cities. PRASHAD is for pilgrimage sites. JNNURM ran from 2005 to 2014.
• SCM's central budget was ₹48,000 crore, of which ₹46,419 crore was released (December 2024) [3].
• Trap: the 74th Amendment (1992) deals with urban local bodies. The 73rd deals with Panchayats.

Mains Points

• Area vs whole city (GS-I):
• SCM finished 91% of its 8,075 projects (December 2024) [2], but it worked in small ABD enclaves through SPVs.
• AMRUT worked on whole-city water and sewer networks (2.03 crore tap connections by June 2025) [4].

• Lesson: basic services across the whole city do more for balanced urbanisation than showpiece pockets.

• Governance (GS-II link):

• SPVs and centrally designed missions sit uneasily with the 74th Amendment's elected ULBs.

• Possible fixes:

  • give planning and money to elected councils
  • re-use SPVs as technical arms of the ULB [8]
  • widen the ULB's own revenue, for example municipal bonds (₹4,984 crore by 13 ULBs) [4]

• Spatial equity:

• Census towns (3,894 in Census 2011) and small towns stay outside most schemes, while metros attract investment.

• Funding for small and medium towns can absorb migration and ease pressure on metro slums.

• Water and housing (GS-III):

• AMRUT 2.0 links urban water security to reviving water bodies (544 revived over 9,511 acres) [4].
• PMAY-U has completed 98.1 lakh houses (May 2026) [6]. Houses still need to sit near jobs and services, or they stay empty.