Smart Cities: Rs 2 lakh Cr Budget; 0.09% Of Central Funds Spent

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Mumbai: “100 smart cities are being developed at an expenditure of over Rs 2 lakh crore,” prime minister Narendra Modi claimed in an infographic tweet, on May 26, 2018, as the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) completed four years at the Centre.

 

“Around 100 urban centres have been chosen as smart cities to ensure improved quality of living, sustainable urban planning and development,” the BJP’s infographic tweet said.

 

“Various development projects in these cities will cost Rs 2,01,979 crore and positively impact almost 10 crore [100 million] Indians.”

 

 

 

This is one of the claims made in a presentation titled ‘48 Months of Transforming India’ that carried the slogan ‘Saaf Niyat, Sahi Vikas’ (Clean Image, Right Development).

 

This is the first part of a FactChecker series that will verify the claims made by PM Modi on the BJP-led government’s performance in 48 months since it came to power on May 26, 2014.

 

PM Modi’s claim of having committed over Rs 2 lakh crore for developing 100 smart cities is four times as much or Rs 1.52 lakh crore more than the total outlay of Rs 48,000 crore the Centre promised to states in assistance when the Smart Cities Mission was launched in June 2015, shows a FactChecker analysis of government data.

 

Of Rs 48,000 crore, till March 2018, only 21% of central funds had been disbursed and 1.8% of this had been utilised, according to a Parliamentary Standing Committee report on urban development.

 

This amounts to 0.09% of central funds used from the government’s projected budget of Rs 2 lakh crore.

 

The Smart Cities Mission, launched on June 25, 2015, is supposed to transform 100 cities into “smart cities” through the application of information and communications technology to manage basic services, such as water supply, sanitation, housing, waste management and mobility.

 

The mission is operated as a centrally sponsored scheme in which the central government has dedicated an assistance of, as we said, Rs 48,000 crore over five years from 2015 to 2020. State governments of chosen cities are to provide a matching contribution by raising money on their own, thus giving cities an average of Rs 100 crore per city per year, according to this mission statement.

 

The union cabinet had approved the mission’s planned total outlay of Rs 48,000 crore in August 2015.

 

Till March 2018, the Centre had allocated Rs 10,084.2 crore, or 21% of the total promised outlay to states for the flagship scheme.

 

Of this, the ministry of housing and urban affairs had released Rs 9,943.2 crore, and the states had actually utilised only Rs 182.6 crore or 1.8% of the released funds, according to the standing committee report.

 

Source: Smart Cities Mission Statement; Parliamentary Standing Committee Report, March 2018;
Figures up to March 2018, figures in Rs crore

 

For the current financial year 2018-19, the Centre has budgeted Rs 6,169 crore as assistance to states–a 56% hike from its budget estimate of Rs 3,949.5 crore for the previous financial year (2017-18)–the report said.

 

“It may be seen that as against the mission support of central government to the tune of Rs. 48,000 crore for five years, the total budget estimate is only over Rs 15,000 crore and revised estimate in the first three years is still lower at Rs. 10,094 crore… and expenditure [actual release of assistance to states] is even lower that,” the standing committee observed.

 

No data have been provided for how states raised and spent their own money under the mission.

 

In terms of physical progress, the urban affairs ministry has chosen 99 smart cities. Of these, while one remains to be chosen, 30 were selected less than a year ago in June 2017 and nine were identified less than five months ago in January 2018.

 

“Even after three years into the mission, majority of identified projects are still at the stage of preparation of detailed project report”, the standing committee observed in its report, expressing “concern”.

 

“It may be pointed out that the total smart city projects for identified 99 cities amounts to Rs 2,04,000 crore,” the ministry said in its response to the committee.

 

Among the 99 cities, 86 cities have already got special purpose vehicle to execute the mission and 64 had project management committees in place and working, the ministry added.

 

“Projects amounting to Rs 5,265 crore have been fully or partially completed. This is likely to grow to Rs 6,438 crore by the end of June 2018. Further, projects worth Rs.15,992 crore are already grounded and at various stages of progress. Additional projects worth Rs.19,070 crore are under tendering,” it said.

 

Update: In response to the story, the ministry of housing and urban affairs has put out a series of tweets, to which we have replied on the platform:

 

 

This is the first part in our series checking the National Democratic Alliance government’s claims on completion of four years in office. You can read the second part here:

 

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(Saldanha is an assistant editor with IndiaSpend and FactChecker.)

 

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.

 

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