The Big Picture – Smart Cities Project: How has it Shaped up?

  • February 9, 2016
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The Big Picture- RSTV
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The Big Picture – Smart Cities project: How has it shaped up?

Smart city project is one of the first initiatives of NDA government when it came to power in May 2014.was announcement of 100 smart city programs. After 2 years of rather pain staking process 20 cities across 12 states were chosen to launch the program.

Why do we need smart city?

As India’s population continues to grow, more citizens will move to cities. Experts predict that about 25-30 people will migrate every minute to major Indian cities from rural areas in search of better livelihood and better lifestyles. It is estimated that by the year 2050, the number of people living in Indian cities will touch 843 million. To accommodate this massive urbanization, India needs to and smarter ways to manage complexities, reduce expenses, increase efficiency and improve the quality of life.

Some of the components of smart cities are smart governance, smart energy, smart environment, transportation, smart IT and communication technology, Smart buildings.

There are certain issues that need to be looked at when it comes to smart city project.


Issue of SPV

The government envision setting up SPV (special purpose vehicle) for execution of smart city projects. However the nature of working of SPV is questioned seriously. Initially SPV’s were used for specific projects, but now SPV for whole sale development (smart governance, smart energy, smart environment,  transportation, smart IT and communication technology, Smart buildings) is something new and not tested before. So there is an apprehension about the end results. This issue needs to have some clarity.

The model of SPV that will be adopted is a unique thing that has not happened anywhere in the world. There is an apprehension that it could leave room for a possible conflict between a democratic setup (Municipality) and SPV (as it is a corporate body) With this framework it is not possible for an SPV to take over the entire municipal function. So there should be a working system such that the elected component feels happy and involved to the extent required and SPV should be made accountable.


Funding is another thorny issue that is not well defined. The total cost of funding for the announced smart cities works out to be 50 thousand crores. In this 10 thousand crore each will be provided by centre and states during the span of 5 years. Remaining 30 thousand crores the cities needs to generate from other than these 2 sources, like convergence of other program with smart city, PPP, Loans, and resources from outside. This is a point of concern how the resources are generated given the climate of investment that is present in the country

Mains question

Q.1) Explain some of the contentious issues that are associated with smart city project. And offer some potential solutions for the same.

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