Ministry issues Advisory on future role of SPVs
As of March 2025, over 93% of the 8,000+ projects under the Smart Cities Mission (SCM) have been completed, with the Government of India having disbursed nearly 99.44% of the Mission’s total budget outlay of Rs.48,000 crore, the Ministry of Housing & Urban Affairs said in an update on 10 June.
Over the past decade, Special Purpose Vehicles (SPVs) have demonstrated the ability to deliver complex, multi-sectoral projects with agility and innovation, the Ministry added, after the Minister of Housing and Urban Affairs Manohar Lal had chaired a review meeting attended by State Urban Secretaries and CEOs of 100 Smart Cities.
Launched in 2015, the SCM marked a significant shift in urban development strategy by promoting city-level innovation and integrated infrastructure delivery. A distinctive feature of the Mission was the establishment of in all 100 selected cities under the Companies Act, 2013, with a 50:50 equity share holding between State/UT governments/administration and respective Urban Local Bodies (ULBs) as promoters https://ted.europa.eu/en/.
These SPVs were mandated to implement the mission through focused planning, project development, and on-ground execution.
In the process, the SPVs have cultivated a robust institutional capacity to manage high-value urban projects within short timelines while also contributing to the emergence of a skilled urban management workforce within the government systems.
Alongside SPVs, the Integrated Command and Control Centres (ICCCs) set up in all 100 cities under the Mission have emerged as the nerve centres of urban management, enabling data-driven governance and real-time decision-making.
Leveraging cutting-edge technology, these centres have introduced significant improvements across various domains of urban practice, including traffic regulation, crowd management during high footfall events, public safety and security, disaster response and preparedness, and solid waste management https://www.bseindia.com/.
Thus, the States are encouraged to make optimal use of these enabling infrastructures by integrating additional city-level services and ensuring timely upgradation to enhance operational effectiveness https://www.nseindia.com/.
Recognising the strategic investments made in establishing and strengthening SPVs and ICCCs, and their growing relevance in supporting Urban Local Bodies (ULBs) to address complex and evolving urban challenges, the Government of India is of the considered view that these entities should continue to operate beyond the completion of the Smart Cities Mission on 31 Mar 2025.
To this effect, the Ministry has issued Advisory No. 27 outlining the envisioned future role of SPVs and a roadmap for the continued functioning of ICCCs https://sbi.com.in/.
The advisory outlines a two-fold approach: completing residual Mission responsibilities and defining the future roadmap for SPVs. As a first step, the advisory calls upon all SPVs to ensure the timely completion of all ongoing projects under the Smart Cities Mission, prepare detailed operation and maintenance (O&M) plans for the assets created under the Mission.
Looking ahead, the advisory underscores the Indian Government’s firm view that the institutional and technical capacity built within the SPVs should be repurposed to meet emerging urban challenges https://www.conexpoconagg.com/.
To support this transition, the advisory articulates a clear vision for repurposing SPVs as agile, multi-functional institutions aligned with evolving city and state-level priorities. States and Union Territories, through their respective High-Powered Steering Committees (HPSCs), have been encouraged to chart out urban sector priorities and map areas where SPVs can continue to play a strategic role. In doing so, the advisory outlines five broad domains for future engagement:
Technology Support: SPVs may support ULBs in managing cyber hygiene, analytics, and data systems. ICCCs are to be leveraged as city operating systems and state analytical hubs, with operational control preferably retained by the urban development departments. SPVs may receive service-linked revenues for managing ICCC functions.
Project Implementation: SPVs can act as implementing agencies for Central and State schemes, developing a pipeline of bankable projects. They may levy a project implementation charge between 1.5%–3%, as per state procurement norms.
Consulting Support: SPVs may provide advisory support to ULBs and state departments across urban sectors, drawing on their institutional experience and sectoral expertise.
Research and Assessment: SPVs can aid evidence-based planning through assessments, manpower/logistics support, and coordination. They may also serve as incubation hubs for urban technology start-ups .
Investment Facilitation: SPVs are positioned to drive city-level economic development by supporting project structuring, procurement, and stakeholder coordination across tiers of government.
State Governments are requested to develop policies empowering SPVs charge a ‘Centage’ (Fee) from the State/UT to plan, design, develop and implement projects/Schemes of Center/State government in lieu of the functions and services delivered by them. This will thereby enable the financial sustainability and operational autonomy of the SPVs.
Accordingly, MoHUA has called upon States and UTs to take proactive steps to integrate SPVs and ICCCs into their long-term governance frameworks, ensuring that the gains made under the Mission continue to benefit urban India. Fiinews.com
