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Union Cabinet Approves 100 Smart Cities Project

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Union Cabinet on Wednesday (29 April)  gave its nod to NDA government's flagship 100 smart cities project and the new urban renewal mission with a total outlay of about Rs one lakh crore.
A meeting chaired by Prime Minister Narendra Modi approved Smart Cities Mission for development of 100 smart cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) of 500 cities with outlays of Rs 48,000 crore and Rs 50,000 crore respectively, according to a statement issued by the Urban Development Ministry.
According to Jaijit Bhattacharya, Partner – Infrastructure and Government Services, KPMG in India, "the cabinet approval for 100 Smart cities and rejuvenation of 500 cities  is very timely. It will not only lay out the path for more liveable cities in India and improve the economic competitiveness of India but also provide the desperately needed growth engine for the Indian economy and the global economy".
Smart City is Prime Minister Narendra Modi's pet project aimed at recasting the urban landscape of the country by making cities more livable and inclusive besides driving the economic growth. Each selected city under the ambitious scheme would get central assistance of Rs 100 crore per year for five years.
AMRUT is the new avatar of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and has been named after former Prime Minister Atal Bihari Vajpayee.
The Cabinet also approved central funding under AMRUT to the projects sanctioned under JNNURM and not completed. JNNURM projects sanctioned during 2005-2012 and which have achieved physical progress of 50 per cent availing 50 per cent of central assistance released and those sanctioned during 2012-2014 will be supported till March 2017.
Accordingly, 102 and 296 projects respectively will get central support for balance funding to complete these projects.
Smart City aspirants will be selected through a City Challenge Competition intended to link financing with the ability of the cities to perform to achieve the mission objectives.
Each state will shortlist a certain number of smart city aspirants as per the norms to be indicated and they will prepare smart city proposals for further evaluation for extending central support.
Urban Development Minister M. Venkaiah Naidu recently said the project would be rolled out from May. To build smart cities, the government had allocated Rs 6000 crore  ($962 million) in its annual federal budget for the financial year starting April 1.
At a cost of about $1 trillion, according to estimates from consultants KPMG, the plan is also crucial to Modi's ambition of attracting investment while providing jobs for the million or more Indians who join the workforce every month.The central spending approved for next five years under the two new missions which are interlinked assumes significance in the backdrop of the approved Plan outlay of Rs 42,900 crore for JNNURM that was implemented over nine years between 2005 and 2014. Out of this, actual central assistance released was Rs 36,398 crore only.
Also in a significant departure from JNNURM, central government will not appraise individual projects. Central assistance will be to the extent of 50 per cent of project cost for cities and towns with a population of up to 10 lakh and one-third of the project cost for those with a population of above 10 lakhs.
Further to today's Cabinet approval, a minimum investment of over Rs 2 lakh crore would flow into urban areas over the next five years since States and urban local bodies would mobilise matching resources ranging from 50 per cent to 66 per cent.
In addition, substantial private investments would be mobilised by states and urban local bodies through PPP model as required to meet the project cost.
Implementation of AMRUT Mission will be linked to promotion of urban reforms such as e-governance, constitution of professional municipal cadre, devolving funds and functions to urban local bodies, review of building bye-laws.
It would also be connected to improvement in assessment and collection of municipal taxes, credit rating of urban local bodies, energy and water audit and citizen-centric urban planning.
Ten per cent of budget allocation will be given to states and UTs as incentive based on achievement of reforms during the previous year. A reform matrix with timelines would be circulated to states in the guidelines.
AMRUT Mission will be implemented in 500 cities and towns each with a population of one lakh and above, some cities situated on stems of main rivers, a few capital cities and important cities located in hilly areas, islands and tourist areas.
Under this Mission, states get the flexibility of designing schemes based on the needs of identified cities and in their execution and monitoring.
States will only submit State Annual Action Plans to the Centre for broad concurrence based on which funds will be released.
Central assistance will be released in three instalments in the ratio of 20:40:40 based on achievement of milestones indicated in State Annual Action Plans.
Meanwhile, Smart Cities Council India, which has been formed to promote development of smart cities, will launch a guide to help urban planners understand the framework of smart city and take steps to improve city's infrastructure.
US-based Smart Cities Council, an industry coalition to advance smart city development and innovation, had reached agreement with Foundation of Infrastructure Research Studies Training President Pratap Padode to launch the India chapter.
The Indian chapter would recruit smart cities experts in the country to develop a 'Readiness Guide for India', the Council said in a statement.

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