Priyanka Tiwari
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In 2015, the Smart Cities Mission set out to transform 100 cities in India into modern, functional, and urbanized cities. The initiative came with ₹2 lakh crore budget and a 10-year deadline, which set the bar high. By March 31, 2025, the outcome was lackluster. Although 91% of the projects were marked as completed, most cities did not consistently improve.
Did not meet target Milestones by 2023: 68 out of 100
Visible improvements were scattered and inconsistent
Government commissioned studies are in progress analyzing the overall impacts done to society
Smart city - Why promises were broken
While good execution plans and funding are thought out, many suburban programs lack in executing the planned strategy. One of the main problems are the pans themselves. The goal-oriented schemes to build infrastructures in underdeveloped cities have the same set of challenges and claimed frameworks. This assumes every scheme has a different target and places unique obstacles formulable into implementing solutions.
Common issues across programs:
Projects planned without considering the specific needs of that city
Above-below governance ignoring subordinate region emphases
Lack of synergy on a national, state, and city level
Takeaways from Prior Programs
JNNURM (2005) is credited as India’s first major venture into subsidizing the urban infrastructure expenditure. It offered ₹50,000 crore but had inconsistent outcomes. Some states completed over half of their sanctioned projects while others hovered around the 10-15% mark.
Problems Identified:
Swift execution and very little public participation
Project implementation by State Agencies instead of Municipal Councils
Stopping already running programs instead of making them better
Repeating Mistakes With New Titles
The Smart Cities Mission and AMRUT (launched together in 2015) suffered from the same issues. AMRUT, in addition to expanding water, sanitation, and infrastructure, did not markedly improve air quality, sewage treatment, or access to clean water across cities.
Most Difficult Problems:
Urban local authorities had very little control, financial or otherwise.
Special Purpose Vehicles and nodal organizations functioned independent of any municipal authority framework.
Numerous city level schemes were at odds with local master plans.
Renewed Attempt: Escalating the Urban Challenge Fund.
To stimulate investment related innovation from cities themselves, the government in 2025 unveiled the ₹1 lakh crore Urban Challenge Fund. The intention of this fund is to assist cities that are willing to fund, through other non- traditional sources such as municipal bonds, a portion of the cost through partnerships.
Citi Fund Goals:
Develop cities into centres of economic growth.
Promotion of innovative city level redevelopment frameworks.
Enhanced accountability through shared funding in city expenditures.
The True Challenge: Suppressed Local Government Bodies.
One constant theme on most schemes of urban development is the sidelining of the local government as far as the decision making process is concerned. While the 73rd and 74th Constitutional Amendments empowers states to devolve power, local governments in most cases do not have power and quite autonomy.
Relevant governance weaknesses:
Most local bodies do not have effective mechanisms for self-funding.
Elected officials are often sidelined in favor of city managers.
Poorly staffed and poorly trained teams suffer from low organizational planning capacity.
Deepening the Foundations of Urban Governance
In order to bring genuine change to Indian cities, local governments should be endowed with administrative and financial authority. Autonomous distribution of national funds to local governments, local elections, and improved taxation frameworks are necessary for enduring progress.
Actions to implement:
Allocate GST proceeds directly to local governments.
Enhance training programs for municipal employees.
Integrate urban planning into local priority frameworks.
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