If there is one programme of the Modi government that has generated a positive vibe among policymakers, international investors, global consulting firms and the general public alike, it is the Smart City Mission.

While 30 global firms, including McKinsey, PricewaterhouseCoopers, KPMG and Cisco are associated with drafting smart city plans, more than 2.5 million people have given their views on smart cities on the government’s MyGov.in website.

The Smart City Mission has also seen a positive response from the state governments with the Centre receiving smart city proposals from 85 of the 98 nominated cities by December 15, the last day for submitting the proposals (Tamil Nadu has delayed the submission of its 12 cities due to floods).

A central committee will now evaluate these plans and select the first set of cities that are eligible for funding under the Mission.

Missing local bodies

In this celebratory din, the voice that has largely been ignored is that of a key urban actor – the city government.  Democratically elected city governments (known as Urban Local Bodies or ULBs) are vital constituents of the Indian state with formal recognition under the Constitution, but have been somewhat sidestepped in the Smart City Mission.

To be fair, compared to the “Concept Note” on Smart Cities which the Ministry of Urban Development put out in late-2014, the Mission Statement of June 2015 has given these bodies more priority. However, not all local governments are optimistic and the faultlines between the different levels of government are now getting visible.

In Maharashtra, the municipal corporations of Navi Mumbai, Pune and Nashik expressed major reservations of the Smart City Mission as they felt that it undermined their autonomy. The Congress, Maharashtra Navnirman Sena and Nationalist Congress Party, which are in power in these Corporations, opposed the Mission while the Shiv Sena mouthpiece Saamna decried the Smart City as a ploy to make Mumbai a union territory. Chief Minister Devendra Fadnavis however was able to arrive at a truce and get approval from the city governments.

In Kerala too, the elected representatives of Kochi’s Municipal Corporation have objected to how the mission ignored the local government in some key decisions.

Special Purpose Vehicles

Much of the opposition to the Smart City is emerging from the fear that Municipal Corporations would get side-lined as a Special Purpose Vehicle or SPV constituted in each city gets vested with the powers to implement the Smart City Mission.

As per the Smart City Mission Statement and Guidelines, it will be these SPVs which will “plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the Smart City development projects”.

The SPVs will be headed by a CEO with a fixed term of three years and can only be removed with prior approval by the central government.

The SPVs will be a limited company in which the private sector can hold equity as long as it is below the combined stake held by the State and the urban local body and provided that the two have equal shareholding. (For example, the State-Urban Local Body-Private Sector shareholding can be in the ratio 30:30:40.)

SPVs are also empowered to enter into Public Private Partnerships, incorporate subsidiaries and appoint project management consultants. Hence the influence of private investors and consulting firms in urban governance is likely to increase with Smart Cities and this would be a cause for concern for many.

The Smart Cities Mission Statement provides that the SPVs will have “operational independence and autonomy in decision making and mission implementation”.

In fact, the Mission “encourages” the State government and urban local bodies in “delegating the rights and obligations of the municipal council with respect to the Smart City project to the SPV.”

Further it also encourages them to delegate “the decision making powers available to the ULB under the municipal act/ government rules to the Chief Executive Officer of the SPV”.

Essentially, it is an instance where a policy issued by the central executive is seeking to niftily circumvent a law passed by the state legislature.

Beyond Smart Cities

The term “Smart Cities” evokes global images of techno-utopia making the narratives produced by both its supporters and opponents rely on the rhetoric rather than the reality of smart cities.

Analysing the actual policy on Smart Cites reveals that India’s interpretation of the term is not limited to technological innovation and is much broader. And the Smart City Mission is not about creating new cities but is concerned with converting certain areas of an existing city into a “smart city” by city improvement (retrofitting), city renewal (redevelopment) or city extension (greenfield development).

Though each city also has to carry out one pan-city initiative, the focus of the Mission is on “compact area” development which may be as small as 50 acres in case of redevelopment. This is inherently a limited fix to India’s urban problems since it will result in the same city having “smart” and “un-smart” areas.

Still, one has to admit that the Smart City Mission disrupts the humdrum procedures of the Indian state and infuses energy into the system through innovative measures in which cities compete with each other to become “smart”.

But concerns regarding the stifling of local autonomy and democracy are valid since, instead of the democratically elected local government, it will be an SPV mandated by a central policy that will govern the smart city.

Admittedly, our local governments are not the most efficient or responsive, but an SPV-driven Smart City is not a lasting solution to the ills of city governance.

A sustainable urban future would require comprehensive governance reforms that empower city governments with more administrative and financial powers and devolve functions further to lower units within the city government.

Mathew Idiculla is a lawyer and researcher working on urban issues. He is a Research Associate at Azim Premji University.