India's magnum opus urban rejuvenation program, the Smart Cities Mission, sputtered to an end on the 31st of March 2025. When it was launched in 2015, it promised a jolt to the arm for urban India — cities would become more liveable, efficient, and responsive to the needs of their residents. With nearly ₹2 lakh crore set aside over a decade, the expectations were high. As the scheme formally concluded in 2025, however, it became clear that results had fallen short. 68 of the 100 cities identified under the program could not meet their targets by 2023. Even though 91% of projects were completed, experts maintain that implementation in many cities is poor. The government has commissioned studies to determine the scheme's impact on cities. The initiative did lead to pockets of visible development, but its overall impact remained uneven and fragmented.
The issue lies not in the intent or funding of such schemes but in how they are designed and delivered. Centrally sponsored urban programmes often begin with a fixed national vision and attempt to retrofit that onto the vastly different challenges faced by cities across India. This approach assumes a level of uniformity that doesn't exist. The Smart Cities Mission is only the latest in a series of schemes in the 21st century that have excluded or bypassed local governments struggling to deliver meaningful, lasting change.
Shared flaws, missed opportunities.
The Jawaharlal Nehru National Urban Renewal Mission (JNNURM), launched in 2005 with an outlay of ₹50,000 crore, was among the first significant attempts to fund urban infrastructure at scale. Yet, its outcomes were mixed. While Gujarat completed 55% of its sanctioned projects, Uttar Pradesh managed just 12%. Hasty planning, project selection that didn't reflect local needs, and using parastatal bodies instead of municipal institutions contributed to its limited success. In several cities, democratically elected governments were bypassed, and existing well-functioning schemes were forcibly merged under the JNNURM umbrella, disrupting continuity.
Similar patterns emerged in the Smart Cities Mission. Projects were often a mix of unrelated components, and many cities struggled to balance ambition with feasibility. Using Special Purpose Vehicles (SPVs) — independent entities created to execute projects — meant municipal governments had little control. In cities like Kochi, research has shown that national priorities shaped project selection more than local needs. With minimal funding from urban local bodies (ULBs), most planning remained at the state level, leading to initiatives that didn’t always align with local master plans or land-use policies.
The Atal Mission for Rejuvenation and Urban Transformation (AMRUT), launched in 2015, followed a similar trajectory. Despite spending over ₹80,000 crore, its impact on outcomes such as air quality, sewage treatment, and access to clean water remained limited. AMRUT favoured cities with more substantial administrative capacity, often leaving underdeveloped urban centres behind. Planning remained fragmented, with annual state-level proposals replacing organic, city-driven planning. Though intended to be inclusive, the approach again relied heavily on top-down mechanisms, with limited public participation and little coordination with elected city governments. The Rs 1 lakh crore Urban Challenge Fund announced in the 205 budget seems the latest in this line of centrally controlled schemes.
A recurring feature of these schemes is the marginalisation of local governments. Whether through SPVs in the Smart Cities Mission or nodal agencies in JNNURM and AMRUT, the bodies responsible for implementation were often outside the democratic framework. Urban metro systems, too, are increasingly operated through joint ventures between the centre and state, with little to no formal role for municipal institutions. Hence, city governments are left out of the decision-making process but must bear the brunt of implementing these policies.
The constraints of state control
The 73rd and 74th Amendments of India's constitution grant states the authority to devolve power to local governments. States generally choose to keep power to themselves, especially in the case of urban government. Municipal governments lack power and financial autonomy and are unstable due to irregular elections. State governments choose to implement their policies through the bureaucracy. This results in municipal commissioners, who are not directly accountable to voters, having executive powers, but elected mayors often lacking the authority to act. This results in a top-down governance structure in which development is less responsive to local needs. Some exceptions, like Kerala, exist in a broader landscape of constrained local governance.
Toward empowered cities
For Indian cities to meet the challenges of rapid urbanisation, climate adaptation, and equitable service delivery, local governments will need absolute authority, financial autonomy, regularity in elections and planning capacity. Many of India’s municipal corporations cannot raise their revenue effectively and hence have to depend on the states for funds. According to the World Bank, India’s urban property tax collection amounts to 0.2% of its GDP compared to the OECD average of 1.1%. Municipal corporations often lack the human resources and adequate training to build the necessary planning capacity.
Rather than routing urban development funds through multiple layers of bureaucracy, the central government should consider directly allocating these resources to elected municipal bodies, with solutions such as a share of GST going directly to local bodies. This shift would enable cities to set priorities through decentralised governance and shift accountability to those with power. Urban transformation will not be achieved by national schemes alone — it requires trusting the institutions closest to the people.
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