New Delhi: Prime Minister Narendra Modi on Thursday launched three government flagship schemes aimed at changing the face of urban India—Smart Cities mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All mission—with an expected expenditure of around 4 trillion over the next few years.

Given the multiplier potential of construction, the schemes will also help create jobs and give a fillip to the economy.

The Housing for all scheme or Pradhan Mantri Awas Yojana that aims to provide at least 20 million homes to people belonging to the economically weaker sections and lower income categories over the next seven years is expected to cost around 3 trillion. The Smart City and AMRUT projects are expected to cost 48,000 crore and 50,000 crore, respectively, over the next five years.

The three schemes aim to meet the needs of around 40% of India’s population, Modi said, adding India’s poor can’t be left to their fate. “We are sitting together to discuss how to improve life in cities. Had we recognized the importance of urbanisation 25-30 years back, we would have been at par with developed countries and cities. But better late than never. Crying over what could have been would not help us."

Modi said every person dreams of having his or her own home but a home is not just about having a roof and four walls. “Once a person owns his home, he starts dreaming about decorating it, for which he starts working harder. A house results in self motivation."

Taking a dig at his detractors, Modi said he will be criticised if people do not get homes, but that does not bother him. He said the decision to make cities smart will be taken by people themselves and not the government. “People are wondering about what exactly a Smart City would be. Smart city is a city that provides more than what a citizen expects. Before he wants it, we provide it," Modi said.

The Prime Minister and urban development minister M. Venkaiah Naidu, who was also present on the occasion, stated that they consulted a range of stakeholders, including financial experts, for the schemes.

Modi also expressed hope that the real estate bill for protecting consumer rights would be passed in Parliament’s monsoon session. Guidelines for the three schemes were also released on the occasion.

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.

Under AMRUT, which replaces the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), funds will be allocated in view of the urban population and number of cities/towns in each state/UT. Without availability of land and all necessary clearances, no project shall be included in the mission. States will transfer funds to urban local bodies within seven days of transfer by the centre and no diversion of funds will be allowed, failing which penal interest would be charged in addition to action by the centre.

Under the Pradhan Mantri Awas Yojana, the selection will be based on the number of urban poor and slum dwellers. “Under Housing for All mission in urban areas, two crore houses will be built. First right will be given to women," said Naidu.

Municipal bodies see potential in the project. “This initiative is a great way of pushing our towns and cities forward. Now that the Prime Minister has released the guidelines, we can start preparing our towns," said Madhu Bai Kinnar, mayor of Raigarh in Chhattisgarh.

Experts also welcomed the launch of the three missions.

“The three different urban renewal schemes need to be closely integrated in order to work well. Any city aspiring for the fundamental aspects of urban infrastructure and living has to leverage all these schemes in some way or the other," said Arindam Guha, senior director, Deloitte India. He said while conceptually these schemes sound effective, budgetary outlays are not adequate and state governments need to contribute generously.

The outlay for an individual city under both schemes—AMRUT and Smart City—is 100 crore each, every year. Given the significant outlays envisaged for basic infrastructure (such as water and sewerage network expansion) alone, even after state and local government investments, private-sector investment would be critical.

“Another concern is shortage of urban planners, financial experts, procurement analysts in smaller tier-II cities. Unless that ecosystem is created, it will be difficult to include the smaller cities into the new scheme of things," Guha said.

“This new government has taken the initiative of setting up 100 smart cities. They have also rechristened the old JNNURM scheme AMRUT, focusing on smaller cities and towns. It’s a good beginning and it’s not easy to get started with such a herculean task. The guidelines will be the actual kick-off to the implementation of the scheme," said Dhiraj Wali, vice-president, Robert Bosch Engineering and Business Solutions.

Madhurima Nandy contributed to this story.

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