Smart Cities Mission: Transforming Urban India through Technology and Innovation

India’s urban population is growing at a pace that demands reinvention, not just repair. The Smart Cities Mission was designed to respond to this reality – a central government programme that treats technology, sustainability, and citizen participation as tools for transforming how cities function. Over a decade since its launch, the mission has moved from blueprint to measurable outcomes, offering lessons on both the promise and the complexity of building future-ready urban spaces.

The origin and vision of the Smart Cities Mission 🔗

The Smart Cities Mission was launched by the Prime Minister on 25 June 2015 as a Centrally Sponsored Scheme aimed at selecting 100 cities to be developed into models of urban sustainability and livability. The core objective was to promote cities offering reliable infrastructure, a clean environment, and a decent quality of life through the application of ‘smart solutions’. The emphasis was on comprehensive development across social, economic, physical, and institutional pillars – not just on installing gadgets or dashboards.

The reasoning behind the mission was demographic. By 2030, urban areas are projected to accommodate nearly 40% of the country’s population and contribute about 75% of its GDP. Cities were already stretched by migration, rising service demand, and ageing infrastructure. Rather than applying patchwork fixes, the government chose to invite cities to reimagine themselves through a competitive process.

How 100 cities were selected 🔗

Unlike most centrally funded schemes that allocate funds top-down, the Smart Cities Mission introduced a competition-driven selection process. State governments nominated candidate cities, which then competed through the Smart Cities Challenge by submitting detailed Smart City Proposals. The first batch of 20 “lighthouse cities” was announced in January 2016, followed by subsequent rounds that eventually brought the total to 100 cities by June 2018.

This model of competitive federalism was itself an innovation. Cities had to demonstrate a credible vision, financial planning, and citizen engagement to secure funding. Under the scheme, the Central Government committed financial support of around Rs. 48,000 crore over five years – an average of Rs. 100 crore per city per year – with an equal matching contribution from the State or Urban Local Body.

The twin strategies: area-based development and pan-city initiatives 🔗

The mission’s design relies on two complementary approaches: Area-Based Development (ABD) and Pan-City solutions.

Area-based development 🔗

Under ABD, each selected city identifies a specific neighbourhood or zone for focused transformation. The idea is to create a replicable model – a compact area where retrofitting, redevelopment, or greenfield development is carried out to a high standard, demonstrating what is possible at the city scale. Retrofitting improves existing built-up areas, redevelopment replaces ageing urban fabric with better-planned settlements, and greenfield development extends the city into new zones with modern planning principles.

Pan-city smart solutions 🔗

Pan-city projects deploy technology across the entire urban area. These include intelligent traffic management, smart water metering, solid waste tracking, e-governance platforms, and intelligent lighting. Chandigarh, for example, launched one of the country’s largest Public Bicycle Sharing systems, with 310 docking stations and more than 2,500 bicycles, helping ease traffic congestion and promoting sustainable commuting.

The Special Purpose Vehicle model 🔗

Perhaps the most distinctive feature of the mission is its institutional architecture. Each of the 100 cities is required to set up a Special Purpose Vehicle (SPV) to plan and execute projects. The SPV is a limited company incorporated under the Companies Act, 2013, promoted jointly by the State/UT and the Urban Local Body with a 50:50 equity shareholding, and headed by a full-time CEO with nominees of the Central Government, State Government, and ULB on its board.

The SPV is designed to have operational autonomy – it plans, appraises, approves, releases funds, implements, manages, operates, monitors, and evaluates smart city development projects. By functioning as a corporate entity, it can sign contracts, raise finance, enter into joint ventures, and execute public-private partnerships faster than a traditional municipal department might.

Why the SPV structure matters – and its critics 🔗

Supporters argue that the SPV model brings efficiency, financial discipline, and a professional management culture to urban projects. However, the structure has drawn significant critique from governance scholars. A commentary published by researchers points out that SPVs function as companies rather than as traditional third-tier local government bodies, raising questions about political participation and democratic accountability in civic decision-making. Citizen consultations conducted by SPVs, critics note, are often advisory rather than legally binding, which can dilute the constitutional role of elected municipal councils.

Funding, project scope, and convergence 🔗

The projects under the mission span a wide range of urban sectors. According to Smart City Proposals aggregated at the national level, the 100 cities identified more than 5,000 projects worth over Rs. 2 lakh crore, with roughly 45% funded through Mission grants, 21% through convergence with other schemes, 21% through public-private partnerships, and the remainder from other sources.

A key design principle was convergence. The mission encouraged cities to align Smart City Proposals with other central schemes such as AMRUT, Swachh Bharat Mission, HRIDAY, Digital India, Housing for All, and Skill Development programmes. This helped avoid duplication and maximised impact, especially in areas like water supply, sanitation, and housing.

Integrated Command and Control Centres: the nerve centre 🔗

Among the mission’s most visible achievements is the establishment of Integrated Command and Control Centres (ICCCs). ICCCs have been operationalised in all 100 smart cities and act as the brain and nerve centre of enabling cities, with decision support systems designed to enhance quality of life. They consolidate feeds from CCTV networks, traffic sensors, solid waste tracking systems, water distribution pipelines, and emergency services into a single dashboard.

COVID-19 and the ICCC pivot 🔗

The pandemic provided an unexpected test. During the COVID-19 pandemic, ICCCs served as emergency response centres in cities including Ahmedabad, Pune, Bhopal, and Varanasi, enabling health monitoring and resource coordination – a role that administrators widely acknowledge as among the mission’s clearest contributions.

Cities repurposed their ICCCs into COVID war rooms almost overnight. They tracked containment zones, monitored hospital bed availability, coordinated ambulance fleets, managed vaccination logistics, and delivered telemedicine services. This rapid pivot demonstrated that technology infrastructure built for routine civic functions could become critical during emergencies.

Key smart solutions rolled out 🔗

The projects delivered under the mission cover a wide spectrum. Some of the notable categories include: smart roads with sensor-based traffic signals and pedestrian-friendly design; smart water management with leak detection, smart meters, and quality monitoring; solid waste management using GPS-tracked collection vehicles and waste-to-energy plants; public space rejuvenation such as waterfront promenades, plazas, and heritage zones; IT connectivity through city Wi-Fi and fibre networks; and climate-resilient infrastructure including stormwater management and renewable energy installations.

Cities also experimented with data platforms. The DataSmart Cities Strategy and the India Urban Data Exchange (IUDX) were designed to help cities pool, share, and use data for better decision-making – moving urban governance closer to an evidence-based model.

The mission’s outcomes and closing report card 🔗

The mission concluded its operational phase in 2025 after multiple timeline extensions. According to the Press Information Bureau, more than 8,000 multi-sectoral projects were undertaken by the 100 cities, amounting to approximately Rs. 1.6 lakh crore, with over 90% of projects completed by the time of review. Of the Rs. 48,000 crore central outlay, a large share was released and utilised.

However, outcomes have been uneven. A decade-long assessment notes that while the mission accelerated digital governance systems and delivered infrastructure gains, it has been limited by concerns about equity, planning, and transparency, with selective project distribution and uneven effects on communities affected by redevelopment.

Equity and inclusion concerns 🔗

Because ABD concentrates investment in a small part of each city, a significant share of urban residents lived outside the directly benefited zones. Studies have flagged that informal settlements and low-income neighbourhoods were sometimes bypassed, and in a few cases, redevelopment involved displacement. A Comptroller and Auditor General (CAG) audit also raised concerns about financial management in some cities, including unfeasible project inclusion and delays in execution.

Lessons for the next wave of urban reform 🔗

The Smart Cities Mission leaves behind a mixed but instructive legacy. It has shown that competitive federalism can energise city-level planning, that SPVs can speed up project delivery, and that ICCCs can become genuinely useful civic infrastructure – especially in crises. At the same time, it has highlighted the importance of embedding smart solutions within constitutionally mandated local self-government, ensuring that elected councils retain meaningful oversight.

Future urban reform will likely need to balance three things: the scale of coverage so that benefits do not remain confined to small zones; the depth of citizen participation so that planning reflects on-ground priorities; and the integration of climate resilience as a non-negotiable design principle rather than an add-on. The next phase of urban governance may build on the digital backbone created by the mission while correcting its distributional and democratic gaps.

What do you think? Should the next generation of urban reform prioritise deepening democratic participation in city governance, or continue leveraging the efficiency of corporatised SPV structures? And how can smart city infrastructure be designed so that its benefits reach informal settlements and low-income neighbourhoods as fully as they reach planned redevelopment zones?

References

1. https://smartcities.gov.in/about-the-mission
2. https://www.ibef.org/government-schemes/smart-cities-mission
3. http://164.100.161.224/content/innerpage/spvs.php
4. https://www.ideasforindia.in/topics/urbanisation/special-purpose-vehicles-for-smart-cities-a-question-on-governance.html
5. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=1907135
6. https://www.nature.com/articles/d44151-025-00229-5
7. https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=151908&ModuleId=3&reg=3&lang=2