Smart Cities Mission Vs AMRUT: A Comparative Analysis

Urban development in India is poised to enter a new phase of growth with the recent launch of three mega urban development missions- Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All (Urban) by Prime Minister Narendra Modi.

The Smart Cities Mission will aim at enhancing the quality of urban life and providing a clean and sustainable environment to about 100 cities, employing smart solutions for the efficient use of the available assets, resources and infrastructure. AMRUT which replaces the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) targets upgrading urban infrastructure across 500 tier 2 & 3 cities.

These ambitious schemes present some unique opportunities and challenges of urbanization and the following is a brief comparison between the Smart Cities Mission and AMRUT on the basis of some crucial parameters.

FUNDING

The Cabinet has approved about Rs 1 lakh crore investment on urban development under Smart Cities Mission and AMRUT with outlays of Rs 48,000 crore and 50,000 crore respectively.

Smart Cities Mission: Each smart city, selected through a city challenge competition, would get a Central assistance of Rs. 100 crore per year for five years. A total of Rs 48,000 crore would be spent on creating 100 smart cities across India.

AMRUT: A total of RS 50,000 crore has been allocated for this scheme which will be utilized to provide a total of 2 crore houses will be built for the urban poor. Under the scheme, central government will provide an assistance of Rs 1-2.3 lakh for every house.

Under AMRUT, the central government will provide 30 per cent of the overall cost, if the city has a population of more than 10 lakh and 50 per cent if under 10 lakh.

SELECTION PROCESS

Smart Cities Mission: The 100 smart cities will be selected on the basis of a city challenge competition. In the first stage, each state and Union Territory will give a score to their cities on the basis of four parameters, including existing service levels, institutional systems and capacities, self-financing and past track records. States will nominate top cities based on the scores. The 100 cities will then prepare smart city plans, which will be evaluated again.

The top 20 cities will be finally selected for funding in the first phase.

AMRUT: For AMRUT as well, states have been asked to recommend cities which can be included under this scheme. Under AMRUT, funds will be allocated in view of the urban population and number of cities/towns in each state/UT.

MISSION-WISE GUIDELINES

Smart Cities Mission

• Central assistance to be used only for infrastructure projects which have larger public benefit.
• Minimum area norm for retrofitting is 500 acres; for redevelopment-50 acres; for green field projects-250 acres. This will be 50 per cent for North-Eastern and Himalayan states.
• Benchmarks to be achieved include: 10 per cent of energy needs to be met from renewable sources, 80 per cent of building construction to be green and 35 per cent of housing in green field projects to be for economically weaker sections.
• Special Purpose Vehicles to be set up for implementation of smart city plans with 50:50 equity of States and urban local bodies.
• An Inter-departmental Task Force to be set up to coordinate all aspects of smart city development

AMRUT

• No projects without availability of land and all necessary clearances shall be included in the Mission by States/UTs.
• States shall transfer funds to urban local bodies within 7 days of transfer by central government and no diversion of funds to be made failing which penal interest would be charged besides taking other adverse action by the centre.
• Action Plans should provide for O&M costs for assets created for at least five years based on user charges.
• Provision for incentivizing reforms by earmarking 10 per cent of annual allocation to be given to good performers at the end of each year.
• For water supply, sewerage, storm water drains and urban transport, centre’s share to be in the range of one-third of project cost to 50 per cent. States to mobilize the balance with its own share being not less than 20 per cent
• A set of 11 reforms to be implemented in four years including promoting e-governance, improving collection of various taxes, fee and user charges, augmenting double entry accounting, constitution and professionalization of municipal cadre, preparation of GIS based Master Plans etc.

EXPECTED TURNAROUND TIME

Smart Cities Mission: The Centre has set July end as deadline to the states to send a list of possible cities to be developed as Smart Cities. The Urban Development Ministry Secretary has written to all Chief Secretaries to start the process of selecting the cities to be developed as smart city. The final selection of beneficiaries’ city will be completed by end of this year and work for development of modern city will be started first quarter in next year.

AMRUT: It aims at equipping 500 cities with infrastructural services such as water, sewerage, storm water drains, transport and development of green spaces and parks. The implementation of AMRUT is linked to a set of reforms which are drawn, in part, from the JNNURM and in part from those given in the 12th Five Year Plan. AMRUT seeks to lay foundation to enable cities and towns to eventually grow into smart cities.

CHALLENGES

Smart Cities Mission

• A large amount of work is currently under way worldwide on smart cities. Experts believe that there is no single vision of a smart city, it has many aspects and that it is ‘work in progress’.
• There are apprehensions as to how cities like Kanpur, Allahabad, Agra, Varanasi, etc, that are densely populated and have crumbling infrastructure will be turned into smart cities.
• Budgetary outlays are not adequate and state governments need to contribute generously.
• Public-Private Partnership (PPP) will be the key to implement smart city. Getting multiple agencies to co-ordinate and move towards a common city vision will be prerequisite to a smart city.

AMRUT

• The three different urban renewal schemes need to be closely integrated and synergized in order to work well. Any city aspiring for the basic aspects of urban infrastructure and living has to leverage all these schemes in some respect.
• Another concern is shortage of urban planners, financial experts, procurement analysts in smaller tier-II cities.
• AMRUT would have to ensure that the projects are not concentrated in a few states and major cities. The government needs to ensure that the scheme aids small towns across the country.

REAL ESTATE IMPACT

Smart Cities Mission

• The scheme can accelerate the process of urban transformation to a large extent. The competitive model for choosing smart cities may result in innovative solutions for urban challenges.
• With investments of more than Rs 300,000 crore planned in the next five years under AMRUT, Housing for All and the Smart Cities Mission, it will provide a strong impetus for growth to more than 250 allied industries.
• A synergy between efficient regulatory authorities, residents’ needs, and providers of urban services will thus improve the quality of governance and life in Indian cities

AMRUT

• It will give the States and the Union Territories the liberty and flexibility in formulation, approval and execution of projects.
• Under AMRUT, projects without availability of land and clearances will not be included in the Mission. Funds will have to be transferred to urban local bodies within seven days.
• A major break from the past is that AMRUT ends the system of central approval for individual projects. Now, the state governments would only have to submit a State Annual Action Plan based on which they would be allocated funds. The Centre would not appraise individual projects.
• AMRUT must be able to strike a balance between assisting towns and cities that were not aided by JNNURM and expanding services and infrastructure in cities already assisted.