Smart city designates not yet spending smartly

Half of the first 20 cities chosen for ‘smartening up’ under the Smart City Mission have not even utilised 50% of their allocated funds over the last three years. Laggards include Guwahati, Kochi, Ludhiana, Belagavi, Davanagere, Solapur, Udaipur, Delhi’s VIP area or New Delhi Municipal Council, Jaipur and Pune.

Surat, Kakinada, Indore and Ahmedabad have finished on top of the chart with respect to fund utilisation and number of projects under implementation. As per statistics provided to ET by the ministry, Surat has utilised 99.9% of funds allocated since 2016. Kakinada has used 99.3% of funds under the Smart City Mission.

The ministry of housing and urban affairs had unveiled the flagship programme in January 2016 by choosing 20 cities through a competitive process.


The ministry, however, does not feel progress of the mission is slow. Smart City mission director Kunal Kumar told ET, “The concept of smart cities is a new one. While the first batch of 20 cities was declared in January 2016, the first set of projects was formally launched by Prime Minister in June 2016. It took most cities 12-18 months to form an special purpose vehicle, mobilise financial resources, appoint human resource and consultants, prepare detailed project reports and tender projects. It would be unrealistic to expect new institutions to give quick and sustainable results even before they go through the rigour of bolstering institutions, planning capital investments and create policies, guidelines and projects to reach targeted outcomes.” Some cities have performed better than others. While Surat has come out on top for two consecutive fiscals – 2017-18 and 2018-19 – seven of the 10 laggard cities haven’t even utilised one-fourth of funds allocated. Guwahati has reported a mere 1.72% utilisation. Kochi has utilised 2.3% of funds, Ludhiana 6.4%, Belagavi 7.5%, Davanagere 11.2%, Solapur 14.2% and Udaipur 14.7%. NDMC and Delhi area housing ministry offices, Parliament and diplomatic enclaves have just about utilised 25%.

The ministry explains the difference in performance in the way different cities have handled the urban turnaround challenge. Surat’s municipal corporation, for instance, had an annual budget of Rs 5,000-6,000 crore and its systems in place.

However, Guwahati and Ludhiana are much smaller municipalities and did not have such the manpower. In case of Ludhiana, the Punjab government could not contribute its share of 50% to the Mission and the SPV stuck to implementing small projects. Kumar said, “In some cities such as Surat, Bhopal, Visakhapatanam and Pune, the municipalities were already mature and used to implementing high-impact, high-volume works. In some cases, the state could not contribute its share of 50% funds to begin with. However, slowly but steadily, cities have addressed these issues and are forging ahead to achieve the goals set by citizens.”