India: Infrastructure - January 2015- July 2015

Government of India Launches Smart Cities Mission

  • Only capable cities to be chosen through two stage competition
  • Past track record under JNNURM, service levels, financial strength to decide selection at State level
  • Economic impact of smart city plan, inclusivity, e-governance, citizen participation to decide financing of smart cities in Stage-2

Given the challenges involved in developing 100 smart cities, only the capable cities will be chosen under the Smart Cities Mission through a two-stage competition. This was indicated in the Operation Guidelines for Smart Cities Mission released by Prime Minister Shri Narendra Modi on June 25, 2015. The selection criteria to be used in both the stages of competition are elaborated in the Guidelines.


In the Stage-1 of City Challenge Competition, each State and Union Territory will score all their cities based on a set of criteria and nominate the top scorers as per the indicated number of potential smart cities for participation in the Stage-2 of competition. The evaluation criteria for Stage-1 of competition within the State/UT are as below:

  • Existing Service Levels (25 points): This includes Increase in service levels over Census 2011, an operational Online Grievance Redressal System, Publication of at least first monthly e-newsletter and online publication of municipal budget expenditure details for the last two financial years on website.
  • Institutional Systems and Capacities (15 points): This covers imposition of penalties for delays in service delivery and improvement in internal resource generation over the last three years;
  • Self-financing (30 points): This would be reflected in payment of salaries by urban local bodies up to last month, Auditing of accounts up to financial year (FY) 2012-13, Contribution of internal revenues to the Budget for 2014-15 and Percentage of establishment and maintenance cost of water supply met through user charges during 2014-15.
  • Past track record (30 points): Percentage of JNNURM projects completed which were sanctioned till 2012, Percentage of City level reforms achieved under JNNURM and extent of capital expenditure met from internal resources.

The 100 potential smart cities nominated by all the States and UTs based on Stage-1 criteria will prepare Smart City Plans which will be rigorously evaluated in the Stage-2 of the competition for prioritizing cities for financing. In the first round of this stage, 20 top scorers will be chosen for financing during this financial year. The remaining would be asked to make up the deficiencies identified by the Apex Committee in the Ministry of Urban Development for participation in the next two rounds of competition. 40 cities each will be selected for financing during the next rounds of competition.


Stage-2 criteria for evaluation of Smart City Plans is as below:


  • Credibility of implementation : This encompasses improvement in operational efficiency over the last three years as reflected in average time taken to give building plan approvals, increase in property tax assessment and collection, collection of user charges for water, improvement in power supply, easing of traffic congestion, online accessing of statutory documents through adoption of IT etc.
  • City Vision and Strategy: As reflected in the degree of correlation with the needs and aspirations of the residents, use of ICT to improve public service delivery, impact on core economic activity and inclusiveness.


  • Impact of proposal: To what extent the proposal is inclusive in terms of benefits to the poor and disadvantaged, Extent of employment generation, Articulation of quantifiable outcomes based on citizen consultations, Impact on environment, etc.
  • Cost effectiveness of Smart City Plan: Application of smart solutions for doing more with less of resources, Alternatives considered to enhance cost effectiveness of the proposal, firming up of resources required from various sources, Provision for Operation & Maintenance Costs, IT interventions to improve public service delivery.
  • Innovation and Scalability: Extent of adoption of best practices in consultation with citizens, Applicability of project to the entire city, Adoption of smart solutions and Pan-city developments.
  • Processes followed: Extent of citizen consultations, vulnerable sections like the differently abled, children, elderly, etc., ward committees and area sabhas and important citizen groups, Extent of use of social media and mobile governance during citizen consultations and Accommodation of contrary voices in the strategy and planning.


As a part of a major initiative for urban development in the country the Prime Minister Mr. Narendra Modi has launched three massive projects for which a budget of INR 300,00,000 trillion to INR 400,00,000 trillion has been allocated, to be spent in the next 5 years. Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation ("AMRUT") and Housing for All, now named as Pradhan Mantri AwasYojana ("PMAY"), are the three programs that have been initiated. The main objective of the three ambitious schemes is to develop Indian cities and towns as new engine of growth. At the launch of these urban development initiatives, the Prime Minister cited the existing housing shortage of 20 million units and ensured that by 2022, it was his responsibility to provide a house for everyone.


  • AMRUT is a renewed scheme to substitute the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
  • AMRUT is proposed to be a 10-year programme with total investment of about INR 200,00,000 trillion.
  • AMRUT seeks to ensure basic infrastructure and sanitation across 500 selected cities having population above 0.1 million in the country and provide basic services (e.g. water supply, sewerage, urban transport) to households.


Five hundred cities will be taken up under AMRUT. The list of cities will be notified at the appropriate time. However, the categories of cities that will be covered in the AMRUT are: i. All Cities and Towns with a population of over 0.1 million with notified Municipalities, including Cantonment Boards (Civilian areas), ii. All Capital Cities/Towns of States/ UTs, not covered in above, iii. All Cities/ Towns classified as Heritage Cities by MoUD under the HRIDAY Scheme, iv. Thirteen Cities and Towns on the stem of the main rivers with a population above 75,000 and less than 0.1 million, and v. Ten Cities from hill states, islands and tourist destinations (not more than one from each State).

Fund Allocation

The total outlay for AMRUT is INR 500 billion for five years from FY 2015-16 to FY 2019-20 and AMRUT will be operated as a Centrally Sponsored Scheme. AMRUT may be continued thereafter in the light of an evaluation done by the Ministry of Urban Development (MoUD) and incorporating learning in the AMRUT. The AMRUT funds will consist of the following four parts:

  • Project fund - 80% of the annual budgetary allocation.
  • Incentive for Reforms - 10% of the annual budgetary allocation.
  • State funds for Administrative & Office Expenses (A&OE) - 8% of the annual budgetary allocation, iv. MoUD funds for Administrative & Office Expenses (A&OE) - 2% of the annual budgetary allocation

However, for FY 2015-16 the project fund would be 90% of the annual budgetary allocation as incentive for Reforms will be given only from FY 2016-17 onwards

Working of AMRUT

Earlier, the MoUD used to give project-by-project sanctions. In AMRUT this has been replaced by approval of the State Annual Action Plan once a year by the MoUD and the States have to give project sanctions and approval at their end. In this way, AMRUT makes States equal partners in planning and implementation of projects, thus actualizing the spirit of cooperative federalism. A sound institutional structure is the foundation to make AMRUT successful. Therefore, Capacity Building and a set of Reforms have been included in AMRUT. Reforms will lead to improvement in service delivery, mobilization of resources and making municipal functioning more transparent and functionaries more accountable, while capacity building will empower municipal functionaries and lead to timely completion of projects.

National Smart Grid Mission

Government has approved the National Smart Grid Mission (NSGM) -an institutional mechanism for planning, monitoring and implementation of policies and programs related to Smart Grid activities. The total outlay for NSGM activities for 12th Plan is INR 9.8 billion with a budgetary support of INR 3.38 billion. NSGM has three tier structure:

NSGM has three tier structure:

  • At the apex level, NSGM has a Governing Council headed by the Minister of Power. Members of the Governing Council are Secretary level officers of concerned Ministries and departments. Role of Governing Council is to approve all policies and programme for smart grid implementation.
  • At the second level, the NSGM has an Empowered Committee headed by Secretary (Power). Members of the Empowered Committee are Joint Secretary level officers of concerned Ministries and departments. Role of Empowered Committee is to provide policy input to Governing Council and approve, monitor, review specific smart grid projects, guidelines / procedures etc.
  • In a supportive role, NSGM has a Technical Committee headed by Chairperson (Central Electricity Authority). Members of the Technical Committee are Director level officers of concerned Ministries & departments, representatives from industries and academia. Role of Technical Committee is to support the Empowered Committee on technical aspect, standards development, technology selection guidelines, etc.
  • For day-to-day operations, NSGM has a NSGM Project Management Unit (NPMU) headed by the Director, NPMU. The Director, NPMU is a Member of the Governing Council and Empowered Committee, and Member Secretary of Technical Committee. NPMU is the implementing agency for operationalizing the Smart Grid activities in the country under the guidance of Governing Council and Empowered Committee.
  • Grant up-to 30% of the project cost is available from NSGM budget. For selected components such as training & capacity building, consumer engagement, etc., 100% grant is available.

Corresponding to NSGM, State Level Mission chaired by the Power Secretary of the State has also been proposed. Support for training & capacity building to State Level Project Monitoring Units (SLPMUs) for smart grid activities is provided by NSGM

Clean Ganga Mission

An Integrated Ganga Conservation Mission – 'Namami Gange' has been launched which approaches Ganga rejuvenation based on lessons learnt and by consolidating the existing ongoing efforts and planning for integrated and comprehensive action plan for 'Short-term' (3 years), 'Medium-term' (5 years) and 'Long-term' (10 years and more). The projects and activities under this plan include pollution abatement measures for different sources of pollution and other policy initiatives. A report on "Ganga River Basin Management Plan – 2015" has been prepared and submitted by the consortium of 7 Indian Institutes of Technology ("IITs"), which has identified 7 thrust areas and 21 action points for the rejuvenation of Ganga and its tributaries.

Work has already been taken up in identified towns located along the main stem of river Ganga and the State Project Management Groups ("SPMGs") of the respective states have been requested to take up Sewage Treatment Plants ("STPs") on a priority basis so that the sewage from these towns does not fall in to river Ganga. The deadline for installing real time effluent discharge meters for polluting industries located on the banks of the Ganga has been extended to June 30, 2015 with stricter conditions since several industries did not meet the earlier deadline of March 31, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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