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Saturday, November 27, 2021

Union Budget 2021 India: Smart Cities Will Get Boost From Budget! How far the project has progressed

The ‘Smart Cities Mission’ is an ambitious plan of the Modi government.

Union Budget 2021-22 Expectations for Smart Cities Mission: Modi government launched ‘Smart Cities Mission’ on 25 June 2015. Its goal is to promote sustainable and inclusive cities where citizens can get high-quality services. As a model under this mission, cities are to be developed where people get quality facilities and environmentally friendly development plans. With this, the central government had initially targeted to complete 100 smart cities between FY 2015-16 and FY 2019-20. While presenting the budget for the financial year 2020-21, the Finance Minister had announced five more smart cities. However, no budget was allocated for smart cities in the budget. 6450 crores were allocated in the budget for the previous financial year 2019-20.

31 percent of the country’s population lives in cities and they contribute 63 percent of GDP (according to the 2011 census). According to an estimate, by 2030, about 40 per cent will live in cities and their contribution to GDP will increase to 75 per cent.

More than 50% increase in 2018 budget allocation

The central government allocates 500 crores for the development of a city under the Smart City Mission. Approximately this amount is allocated by the concerned state in which the smart cities are to be developed. Talking about budget allocation, there was a record allocation for the financial year 2018-19. In the financial year 2017-18, Rs 4000 crore was allocated for smart cities, while in 2018-19, 54.2 percent more was allocated Rs 6169 crore. For its next financial year 2019-20, 4.2 percent per cent more was allocated Rs 6450 crore. In such a situation, in the budget of fiscal year 2020-21, it was expected that the budget allocation would be increased but the central government did not allocate the budget itself. However, five more smart cities were announced in the budget. These five smart cities have not been announced yet.

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11% projects completed

According to an economic survey brought by the central government in January 2020, 5151 projects costing more than 2.05 lakh crore are being implemented in 100 smart cities. According to the report of the Economic Survey, till November 14, 2019, 4154 tenders worth Rs 1.49 lakh crore (72% of the total proposal) were withdrawn. Out of this, work orders have been issued to 3359 projects worth Rs 1.05 lakh crore (51% of the total proposal).

According to the Economic Survey, as of 14 November 2019, about 1290 projects worth Rs 22,659 crore have been completed and are operational. Out of about 2.05 lakh crore projects, about 22.7 lakh crore projects have been completed, ie only 11 percent of the projects were completed by November 2019.

Smart cities selected in four rounds

  • In January 2016, 20 Smart Cities were selected under Round 1 and in May 2016, 13 more Smart Cities were selected through the Fast Track Round. These include Bhubaneswar, Pune, Jaipur, Surat, Kochi, Ahmedabad, Jabalpur, Visakhapatnam, Solapur, Davangere (Karnataka), Indore, NDMC (Delhi), Coimbatore, Kakinada (Andhra Pradesh), Belagavi (Karnataka), Udaipur, Guwahati, Chennai, Ludhiana and Bhopal were included. Lucknow, Warangal (Telangana), Dharamshala, Chandigarh, Raipur, New Town Kolkata, Bhagalpur, Panaji, Port Blair, Imphal, Ranchi, Agartala and Faridabad were covered through fast track.
  • In September 2016, 63 potential smart cities participated in the second round, out of which 27 smart cities were selected. These include Amritsar, Kalyan-Dombivali, Ujjain, Tirupati, Nagpur, Mangaluru, Vellore, Thane, Gwalior, Agra, Nashik, Rourkela, Kanpur, Madurai, Tumakuru (Karnataka), Kota, Thanjavur, Namchi, Jalandhar, Shivamogga, Salem, Ajmer, Varanasi, Kohima, Hubli-Dharwad, Aurangabad and Vadodara were included.
  • In June 2017, 45 Potential Smart Cities participated in Round 3, out of which 30 Smart Cities were selected. In this phase, Thiruvananthapuram, Naya Raipur, Rajkot, Amravati, Patna, Karimnagar, Muzaffarpur, Puducherry, Gandhi Nagar, Srinagar, Sagar, Karnal, Satna, Bangalore, Shimla, Dehradun, Tripur, Pimpri Chinchwad, Bilaspur, Pasighat, Jammu, Dahod, Tirunelveli, Thoothukudi, Tiruchirappalli, Jhansi, Allahabad, Aligarh and Gangtok were included.
  • In January 2018, 15 potential smart cities participated in round 4, out of which 9 smart cities were selected. It included Silvassa, Erode, Diu, Bihar Sharif, Bareilly, Itanagar, Moradabad, Saharanpur and Kavaratti.

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This is how smart cities become

After the selection of Smart Cities, they have to constitute a Special Purpose Vehicle (SPV). It is a limited company under the Companies Act 2013 in which state and urban local bodies have 50-50 per cent stake (equity shareholding). After the SPV is formed, smart city implementation is done and detailed project reports (DPRs) are prepared and the tenders are drawn. Similar processes are initiated.

According to the report of the Economic Survey, Special Purpose Vehicles (SPVs) and City Level Advisory Forums (CLAF) were formed under the Smart Cities Mission (SCM). In addition, Project Management Consultants (PMC) were appointed.
According to the information given on the Smart Cities Mission website of the Ministry of Housing and Urban Affairs, 100 smart cities will be prepared at a cost of more than 2.05 lakh crore. According to the information, the area-based development cost in this is Rs 1.64 lakh crore and the solution cost of the entire city is Rs 38.9 thousand crores.

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