Maarg Manthan · Topic 2.2

Smart Cities Mission

Current Affairs & Government Schemes › Urban Development Schemes · Topic 2.2

The Smart Cities Mission was a Centrally Sponsored Scheme of the Ministry of Housing and Urban Affairs, launched on 25 June 2015 to promote cities that give core infrastructure, a clean and sustainable environment and a decent quality of life through smart solutions. One hundred cities were chosen through a Smart City Challenge in stages, with a central grant of about Rs 500 crore per city over five years, matched by the state or urban body. The mission formally ended on 31 March 2025, after repeated extensions, and no central budget is provided after closure.

6 min read · UPSC Prelims · Current Affairs & Government Schemes · Urban Development Schemes

At a Glance

Launch 25 June 2015
Ministry Housing and Urban Affairs
Cities 100, chosen by Smart City Challenge
Central grant About Rs 500 crore per city over five years
Status Mission closed 31 March 2025
Exam link UPSC Prelims, Current Affairs and Government Schemes: Urban Development Schemes

Where Does It Fit?

This is the second topic of the macro on urban development. It was launched with AMRUT on the same day, but it looked at area based development and technology rather than universal basic services. Compare the basic services approach in Atal Mission for Rejuvenation and Urban Transformation (AMRUT). Previous topic: Atal Mission for Rejuvenation and Urban Transformation (AMRUT). Next topic: Pradhan Mantri Awaas Yojana – Urban (PMAY-U).

What Was the Design of the Smart Cities Mission?

Element	Detail
Selection	A Smart City Challenge in which cities competed with a Smart City Proposal. The 100 cities were selected in rounds from January 2016 to June 2018
Area based development	Retrofitting of an existing area, redevelopment of a built area or greenfield development on new land. The area is a small part of the city
Pan-city solutions	A smart solution that covers the whole city, such as an intelligent transport system or online services
Funding	The Centre was to give about Rs 48,000 crore in all, around Rs 500 crore per city, with an equal amount from the state or urban local body. Other sources were private money, borrowing and convergence
Special purpose vehicle	A company under the Companies Act with the state and urban local body as promoters, led by a chief executive, to plan and run projects
Integrated Command and Control Centre	A control room for city services such as traffic, safety and waste, set up in all 100 cities, as reported
Core infrastructure	Adequate water, assured power, sanitation and waste management, efficient mobility, affordable housing, IT connectivity, e-governance, sustainable environment and safety

What Was Achieved and What Went Wrong?

Completion: As reported in Parliament in 2026, about 8,064 projects worth around Rs 1.65 lakh crore were taken up, and about 7,790 were complete by March 2026. Figures change slightly between replies
Deadline: The mission was due to end in June 2023, then extended to March 2024 and finally to 31 March 2025
Closure: The Ministry of Housing and Urban Affairs has said that no budget is provided for the mission after its financial closure, and states have to maintain assets
Top examples: Indore, Surat, Pune and Ahmedabad are cited as examples of good use of command centres, transport and solid waste systems
Data platforms: The India Urban Data Exchange and the Smart Cities Open Data Portal were launched to share data
Criticism of area approach: Spending in small islands left the rest of the city untouched and created a divide between smart and ordinary areas
Governance: SPVs worked in parallel to elected city councils, which raised concerns for the spirit of the 74th Constitutional Amendment
Funds: Delays in state matching funds and weak revenue models for projects were reported

What Else Should You Remember?

Selection rounds: Cities were selected in a first round of 20 in January 2016, with a fast track round of 13 and later rounds, up to 100 by 2018
Retrofitting: Area based development can be a retrofit of an old market area, a redevelopment of a built area, or a greenfield city such as GIFT City in Gujarat
Smart solutions: Examples include smart meters, public bike sharing, intelligent traffic signals, Wi-Fi hot spots and digital payment systems for services
Citizen engagement: Cities were chosen after public consultation, which was a key part of the challenge
74th Amendment: Urban local bodies are municipalities under Part IXA of the Constitution. The role of SPVs was debated for this reason
Funding sources: Besides the grants, cities raised money through municipal bonds, as in the Pune and Ahmedabad bonds, and through land monetisation
Link to services: Water, waste and housing projects were converged with other missions, as in Swachh Bharat Mission – Urban (SBM-U) and Pradhan Mantri Awaas Yojana – Urban (PMAY-U)
Heritage cousin: A related and smaller central programme for historic cities is covered in Heritage City Development and Augmentation Yojana (HRIDAY)
Legacy: Command centres, data platforms and the SPV approach remain as assets, but long term maintenance depends on state and city budgets
Next phase: Government has spoken of an Urban Challenge Fund and city economic regions for future urban reforms, so check current Budget announcements

Why Does It Matter for the Exam?

Launch: 25 June 2015, MoHUA, 100 cities
Model: SPV and the three types of area based development
Funding: Rs 500 crore per city and state matching
Features: ICCC, pan-city solutions, Smart City Challenge
Status: closed on 31 March 2025

As an analytical point, a smart city is not only technology. The mission showed that tools like command centres help when they serve basic services. Ward committees and elected councils should own such assets, not only special companies, to keep them sustainable.

Why Is This Topic Important?

Model SPV and area based
Status Closed in 2025
Critique Governance and equity

What Came Next?

The next topic covers the urban housing mission launched on the same date. Next topic: Pradhan Mantri Awaas Yojana – Urban (PMAY-U).

Key People and Terms

SPV Special purpose vehicle
Retrofitting Improving an existing area
Greenfield Development on new land
Pan-city Solution for the whole city
ICCC Command and control centre
Redevelopment Rebuilding an existing area

Exam Corner

Points to Remember

Launched on 25 June 2015; 100 cities.
About Rs 500 crore per city.
Three approaches: retrofitting, redevelopment, greenfield.
Delivered through an SPV.
Closed on 31 March 2025.

Do Not Confuse With

Smart Cities and AMRUT Area based smart solutions versus city wide basic services
Retrofitting and redevelopment Improve what exists versus rebuild a built area
SPV and municipality A company for projects versus the elected local body

Memory Hook

Hundred cities, five hundred crore each, SPV to build, command centre to watch.

Mains Angle

Questions ask whether the mission met its goals and about its governance model. These points give a balanced frame.

Gains Command centres, data, some model projects
Issues Island development, SPV model, funds
Way ahead Empower city councils, fund upkeep, focus on services

A Question You May Face

An original practice question, not a past paper question.

“Critically examine the Smart Cities Mission and assess the lessons it offers for future urban planning in India.”

How to Answer

Intro Mission of 2015 and its design.
Gains Projects and tools.
Issues Island approach and SPVs.
Way Empower councils and maintain assets.

GS Relevance

Prelims: features, number of cities, SPV model, closure. GS Paper 2: urban governance and policy. GS Paper 3: urban infrastructure and technology.

Frequently Asked Questions

What is the Smart Cities Mission?

The Smart Cities Mission was a Centrally Sponsored Scheme of the Ministry of Housing and Urban Affairs, launched on 25 June 2015 to build 100 cities with core infrastructure, a clean environment and smart solutions. Cities were selected through the Smart City Challenge and ran projects through special purpose vehicles.

How many smart cities are there in India?

There are 100 cities selected under the Smart Cities Mission through a Smart City Challenge held in rounds between January 2016 and June 2018. Each city had an area based development plan and pan-city solutions, delivered through a special purpose vehicle and monitored by an Integrated Command and Control Centre.

How was the Smart Cities Mission funded?

The Centre planned about Rs 48,000 crore in grants, roughly Rs 500 crore per city over five years, matched by an equal amount from the state or urban local body. The rest was to come from convergence with other schemes, private investment, borrowing and land and municipal bond based revenue.

What are the three types of area based development?

The three types are retrofitting, redevelopment and greenfield development. Retrofitting improves an existing built area, redevelopment replaces an existing built area with a new layout, and greenfield development builds a new area on vacant land, as seen in examples like GIFT City.

What is the latest status of the Smart Cities Mission?

The mission formally closed on 31 March 2025 and the Ministry has said that no further budget is provided. As reported in 2026, about 7,790 of around 8,064 projects were completed by March 2026. Cities must maintain the assets from their own budgets, so check recent replies for updates.

PYQ Practice — Statement Analysis

1 The Smart Cities Mission covered 100 cities.

True

Selected through a challenge.

2 Retrofitting means building a city on vacant land.

False

That is greenfield development. Retrofitting improves an existing area.

3 Smart city projects are run through special purpose vehicles.