India's Smart Cities: A New Chapter for Urban Development

Launched in 2015, the Smart Cities Mission (SCM) set out to revolutionize urban development in India through innovation and integrated infrastructure. A cornerstone of the initiative was the creation of Special Purpose Vehicles (SPVs) in each of the 100 selected cities, established under the Companies Act, 2013. These SPVs were formed with equal equity participation (50:50) from State/UT governments and Urban Local Bodies (ULBs).

As the Mission approaches its conclusion on 31 March 2025, the Government of India has decided to retain both SPVs and Integrated Command and Control Centres (ICCCs) to continue advancing urban transformation. Advisory No. 27, issued by the Ministry of Housing and Urban Affairs (MoHUA), outlines a dual strategy: (1) completion of all remaining SCM projects, and (2) repurposing SPVs as long-term institutional mechanisms for urban support.

SPVs are now tasked with developing detailed operations and maintenance (O&M) plans for existing assets. The advisory identifies five key future roles for SPVs:

Technology Support – Operating ICCCs and managing urban data platforms.

Project Implementation – Delivering Central and State government schemes with a service fee of 1.5%–3%.

Consulting Support – Providing advisory services to ULBs and government departments.

Research and Assessment – Promoting evidence-based urban planning, monitoring, and incubation.

Investment Facilitation – Structuring, coordinating, and supporting urban investment projects.

To ensure financial viability and autonomy, States are encouraged to authorize SPVs to charge a ‘Centage’ fee for planning and executing projects.

News by Rahul Yelligetti.