Introduction
India’s Smart Cities Mission, launched in June 2015, aimed to transform 100 cities into sustainable, citizen-friendly urban centers with smart infrastructure and governance solutions. However, by its official closure in March 2025, audit reports and parliamentary reviews revealed persistent challenges—project delays, fiscal gaps, unrealistic planning, weak SPV governance, and insufficient citizen oversight. This blog analyses these audit findings and outlines reform pathways.
CAG Audit Findings & Mission Oversight
➤ CAG Identified Poor Planning and Project Delays
In Patna, the CAG flagged inclusion of 29 unfeasible projects out of 44 selected—later dropped after funds worth ₹1,816.82 crore were misapplied. Only 15 revised projects totaling ₹381 crore remained active. Many initiatives lacked clarity of scope and operational feasibility, resulting in long delays and wasted resources.([turn0search0])
Audit of local bodies (2021) noted Smart City Companies (SPVs) often implemented unrelated work lacking any “smart” component. Tender processes were flawed, estimates unrealistic, and contract coordination weak—leading to incomplete objectives even after five years.([turn0search3])
➤ Internal Controls and Divergence from Approved Plans
CAG observed that SPVs frequently deviated from approved City Plans and undertook tasks already assigned to Urban Local Bodies (ULBs). They also reimbursed costs for work under other schemes—despite central grants tied specifically to Smart Cities projects.([turn0search3])
Parliamentary Committee Review: Slow Progress & Strategic Gaps
➤ Execution Pace and Completion Rates
The Standing Committee on Housing & Urban Affairs reported that as of December 2023, 47% of projects in 20 cities remained at the work-order stage, even as the mid‑2024 deadline neared. Only Madurai had achieved 100% completion by then.([turn0search2]) Overall, approximately 6,419 of 7,970 projects (worth ₹1.25 lakh crore) were complete, while the rest awaited execution.([turn0search5])
➤ Need for Strengthening Capabilities
The Committee criticized smaller cities—especially in the North-east—for lacking ULB capacity to plan and execute high-value projects. It recommended central support to build institutional capacity in laggard cities.([turn0search5]turn0search6])
It also called for third-party audits for project accountability before scaling further phases—an issue yet to be fully responded to by the Ministry.([turn0search7])
➤ Data Privacy & Cybersecurity Concerns
Given reliance on digital infrastructure like ICCCs and traffic systems, the Committee stressed encryption, cybersecurity audits, and privacy safeguards for citizen data. It urged integration with bodies like STQC and Quality Council of India.([turn0search2]turn0search5])
Mission Outcomes & Case Illustrations
➤ Overall Completion & Financial Utilization
By January 2025, approximately 7,479 out of 8,058 tendered projects were completed, utilizing ₹1.50 lakh crore of the ₹1.64 lakh crore planned outlay. However, the mission was officially extended to March 31, 2025, with around 7% of projects still pending.([turn0search22])
Most PPP investments fell short of targets: while the mission aimed for 21% PPP funding, only 6% materialized, and about half the smart cities did not engage any private partners. Only six cities secured planned loan financing worth ₹5,298 crore.([turn0search6]turn0search5])
➤ Divergent State Performance
In Punjab, 87% of 205 sanctioned projects were completed—below the national average of 93%. Only Jharkhand (100%) and Tamil Nadu (98%) exceeded national benchmarks, while Telangana lagged at 64%.([turn0search11])
In Punjab, Haryana & Rajasthan, new partnerships with Canada are intended to accelerate governance and infrastructure delivery, focusing especially on training urban planners and designers.([turn0search11])
➤ Local Discontent and Infrastructure Failures
In Ajmer, several flagship smart city constructions were demolished due to safety concerns, highlighting mismanagement and poor contractor oversight.([turn0news19])
In Ludhiana West, residents protested over substandard design and planning for roads and beautification projects, accusing officials of ignoring public input and diverting funds.([turn0news23])
In Nagpur, nearly 1,500 of 3,686 Smart City‑installed CCTV cameras became non-functional after SPV dissolution—weakening public safety infrastructure.([turn0news20])
Strengths & Innovation Highlights
✅ Leading Performers
Surat consistently ranks in the ‘Super Swachh League’—processing almost 100% of solid waste via decentralized facilities and recycling legacy waste (~10 lakh tonnes).([turn0news15])
Bhopal achieved national rank #2 among large cities, scoring high on door-to-door collection, waste processing, water-body cleanliness, and source segregation.([turn0news18])
These cities demonstrate that dedicated planning, public-private partnerships, and infrastructure resilience are achievable under SCM.
✅ Monitoring Framework & Research
Groups like Drishti IAS and PRS have developed citizen‑focused monitoring models for SCM evaluating transparency, inclusivity, and performance—highlighting significant variation in public participation across city projects.([turn0search1]turn0search4])
Challenges & Governance Gaps
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Misaligned planning: Many projects were poorly selected or lacked feasibility studies, affecting execution and benefits delivery.
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Weak SPV accountability: Special Purpose Vehicles often lacked citizen oversight, bypassed urban plans, and misused funds.
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Transparency deficits: Third‑party audits remain largely unimplemented; citizens often excluded from consultations.
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Digital risks: Inadequate cyber protection and failure of local surveillance infrastructure undermine smart-city utility.
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Regional disparity: Smaller and north‑eastern cities continue to struggle due to ULB deficits and administrative turnover.
Recommendations for Future Urban Missions
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Mandate Independent Audit & Assurance
SPVs should undergo regular third-party audits and publish findings on project quality, timelines, estimates, and beneficiary feedback. -
Boost ULB Capacity Building
Central support should augment planning ability, digital literacy, and financial governance in smaller cities via structured training and advisory programs. -
Ensure Public Participation
Civic consultation processes must be institutionalized during plan formulation and implementation, with benchmarks and citizen feedback integration. -
Refine SPV Governance & Tenure
CEOs of Smart City SPVs should have fixed staffing tenures. Strengthen SPV boards with independent citizen members for accountability. -
Enforce Cybersecurity & Data Governance
Each city's digital assets (ICCC, CCTV, traffic management) must be audited regularly under STQC standards with transparent protocols for citizen data protection. -
Rebalance Funding Approach
Promote PPP engagement and structured loan financing; refine project selection and feasibility evaluation to minimize diversion of funds and unrealistic budgeting. -
Encourage Cross-City Learning
Implement ‘sister city’ support (top-performing paired with bottom-tier cities) to foster real-time exchange of best practices.
Conclusion
The Smart Cities Mission showcased India’s ambition for digitized urban transformation. Yet independent audits and parliamentary reviews reveal that implementation often fell short of vision—due to misaligned project selection, governance lapses, sluggish execution, and excluded citizens.
Cities like Surat and Bhopal illustrate success is possible when planning, execution, and civic engagement align. To advance equitable and resilient urban governance, future schemes must embed transparency audits, citizen participation, institutional capacity-building, and cyber resilience from the outset. Only then can India’s smart city ambitions deliver lasting, inclusive impact—beyond glossy infrastructure—to urban citizens across the country.