SCM Mess: Smart Cities Mission Trips on Graft, Delays, False Promises

SCM or the Smart Cities Mission was launched on June 25, 2015, by Prime Minister Narendra Modi. The project was a flagship urban renewal program of the Bharatiya Janata Party (BJP)-led government, aimed at transforming 100 Indian cities into sustainable, citizen-friendly hubs. The mission sought to integrate advanced technology, data-driven governance, and public-private partnerships to enhance core infrastructure, improve quality of life, and drive economic growth. 

Promising “smart solutions” for urban challenges, the SCM envisioned mixed land use, expanded housing, reduced congestion, improved sanitation, and sustainable environments. With a budget of ₹2 lakh crore, including ₹48,000 crore from the central government over five years, the mission was positioned as a cornerstone of Modi’s “Gujarat Model” of development, which emphasised rapid urbanisation and investor-friendly policies. 

The BJP’s 2014 manifesto had highlighted the need to move beyond “poverty and bottlenecks” in cities, framing the Smart Cities Mission as a transformative step toward making India a global urban leader. By 2030, with 40% of India’s population projected to live in cities and contribute 75% to GDP, the mission was touted as critical to managing rapid urbanisation and positioning India as a modern economic powerhouse.

Lofty Promises and a Trail of Failures

The Smart Cities Mission promised a technological and infrastructural overhaul of 100 Indian cities by 2023, with commitments to smart classrooms, e-governance, waste and water management, urban mobility, and skill development, all driven by Information and Communication Technology (ICT). The BJP envisioned Special Purpose Vehicles (SPVs) as efficient mechanisms to execute projects worth ₹1.64 lakh crore, with private sector collaboration ensuring scalability. Yet, as of April 2025, the mission stands as a stark disappointment. 

According to the official website as on 11 April 2025, only 7,549 of 8,067 tendered projects have been completed, leaving 518 projects worth ₹13,142 crore unfinished, despite a PIB press release in July 2024 claiming all projects would conclude by March 31, 2025. Project delays apart, allegations of corruption have surfaced in many smart cities across the country. 

Government’s Claims and Emerging Discrepancies

On July 3, 2024, the Press Information Bureau (PIB) released a statement painting an optimistic picture of the Smart Cities Mission, asserting that 7,188 projects (90% of the total) worth ₹1,44,237 crore had been completed, with the remaining 830 projects worth ₹19,926 crore in “advanced stages.” 

The PIB emphasised the mission’s innovative approach—city competitions, SPVs, and technology-driven governance—and announced an extension to March 31, 2025, to complete the remaining 10% of projects, citing “on-ground conditions” like legal disputes and resource constraints. This extension, the third since the mission’s inception, was framed as a pragmatic response to requests from state governments, with no additional funding beyond the ₹48,000 crore central allocation, of which ₹46,585 crore (97%) had been released and 93% utilised. 

However, as on date multiple projects are yet to be completed and even the completed projects are not those that were initially envisaged or promised. The Smart Cities Mission was initially slated for completion between 2019 and 2023, with cities selected in phases from 2016 to 2018 expected to deliver within five years. However, delays prompted extensions—first to June 2023, then June 2024, and now March 2025.  

The Mirage of Foreign Investment in the Smart Cities Mission

In June 2015, Modi launched the Smart Cities Mission, touting it as a magnet for Foreign Direct Investment (FDI) to develop 100 technologically advanced cities. Speaking at the launch, Modi claimed interest from 14 countries, including France, Singapore, Japan, and the USA, with Finance Minister Arun Jaitley’s 2015 Union Budget offering tax breaks and streamlined approvals to attract investors. Many media reports during this period also reported on ambitious pledges from France, Italy and other countries.

However, these pledges were largely overstated or non-binding. A 2016 RTI query confirmed negligible FDI inflows for the mission, with media reports confirming no significant foreign funds had materialised by mid-2016. Singapore provided technical assistance for Amaravati, Andhra Pradesh’s capital city, through a master plan, but contributed no direct investment. Similarly, the World Bank and Asian Development Bank offered consultancy services but no substantial financial commitments. The SCM currently relies almost entirely on central and state funds.

Why Foreign Investors Shied Away

The failure to attract foreign investment in the SCM stemmed from systemic and structural barriers that undermined investor confidence. Land acquisition issues were a primary deterrent, with projects stalled by legal disputes and community resistance, as seen in Amaravati, where 30% of the planned land remained unacquired by 2019 due to farmer protests. 

Lengthy approval processes further eroded trust, with India’s bureaucratic maze—despite reforms like the Foreign Investment Facilitation Portal—delaying clearances for years, as noted in a 2018 World Bank report. Unclear returns on investment compounded the problem, as the SCM’s Special Purpose Vehicles (SPVs) lacked transparent revenue models, deterring private players wary of India’s municipal governance risks. 

A Vision Diluted by Practical Realities

When Prime Minister Modi launched the Smart Cities Mission, he initially painted a bold picture of 100 futuristic "special smart cities" equipped with cutting-edge infrastructure, including optical fiber networks, smart grids, and greenfield developments like Dholera in Gujarat and Amaravati in Andhra Pradesh. The initial vision, as outlined in the mission's concept note, leaned heavily on creating tech-driven urban hubs to rival global cities, with promises of seamless connectivity, sustainable ecosystems, and economic vibrancy to attract investors. 

However, by late 2015, the Ministry of Housing and Urban Affairs (MoHUA) shifted gears by stating that the goal was now to retrofit and redevelop existing urban areas. This policy pivot prioritised upgrading existing urban areas—like Indore’s Chappan Dukaan food street or Bhubaneswar’s smart mobility systems—and redeveloping aging infrastructure, such as East Kidwai Nagar in New Delhi and Bhendi Bazaar in Mumbai. 

The project's shift to retrofitting and redevelopment, formalised in MoHUA’s three-pronged approach by 2016, prioritised incremental upgrades over the transformative vision sold to the public. Retrofitting projects, such as smart streetlighting in Surat or waste management systems in Pune, and redevelopment efforts like Bhopal’s smart roads, dominated the mission’s portfolio. Experts say the retrofitting and redevlopments constituted a large majority of the 8,067 projects. 

Greenfield developments, meant to be the mission’s crown jewels, were sidelined, with only a handful—like Dholera’s partial activation by 2025—showing progress, while Amaravati stalled amid political and funding disputes. This retreat from the original promise of new, world-class cities was driven by the mission’s inability to secure the anticipated private and foreign investment. This was nothing but the SCM trying to repackage routine urban upgrades as a Smart City Project. 

A Deeper Malaise—Corruption and Missing Funds

While delays and the pivot from futuristic smart cities to retrofitting have marred the mission of the project, its deeper crisis lies in the murky handling of its ₹1.64 lakh crore budget. Widespread allegations of corruption have cast a shadow over the mission, with multiple cities reporting financial irregularities, inflated contracts, and funds siphoned off through opaque Special Purpose Vehicles. Audits, including those by the Comptroller and Auditor General (CAG), have flagged discrepancies in expenditure, with significant sums unaccounted for or diverted to unrelated activities. 

Corruption Scandal Rocks Srinagar Smart City Project

The Srinagar Smart City Project, launched in April 2017 under the Smart Cities Mission (SCM) with a budget of ₹3,535 crore, promised to transform the city into a modern urban hub through smart roads, Integrated Command and Control Centres (ICCCs), and enhanced public services. Managed by Srinagar Smart City Limited (SSCL), a Special Purpose Vehicle, the project allocated about ₹500 crore for 70 initiatives, including urban mobility and heritage preservation. 

However, by January 2025, the project was mired in a corruption scandal, with the Jammu and Kashmir Anti-Corruption Bureau (ACB) registering FIRs against SSCL’s Chief Financial Officer Sajid Yousuf Bhat and Executive Engineer Zahoor Ahmad Dar under the Prevention of Corruption Act, 1988, for possessing assets disproportionate to their known incomes. On January 10, 2025, that ACB raids across seven locations in Srinagar and Pulwama uncovered suspicious financial transactions, including Bhat’s ownership of a commercial property in Rambagh valued far beyond its sale deed and Dar’s lavish multi-storied house and benami properties. The ACB’s probe, triggered by public complaints about delayed and substandard work, revealed that ₹466 crore had been spent by 2024, yet key infrastructure projects lagged, raising serious questions about fund misuse and the integrity of SSCL’s operations. With the Enforcement Directorate launching a money laundering probe in April 2025 against Bhat and Dar, the Srinagar Smart City Project exemplifies how corruption, coupled with SCM’s structural weaknesses, has undermined the stated vision of the Smart Cities Mission. 

The Srinagar Smart City Project’s corruption scandal deepened in January 2025 when Abdul Waheed Shah, a Senior Superintendent of Police at the Jammu & Kashmir Anti-Corruption Bureau (ACB), was transferred to the Home Department just six days after exposing financial irregularities. It was Shah’s investigation that led to FIRs against Bhat and Dar. At a January 10 press conference, Shah alleged widespread fund misuse, but his abrupt repatriation, alongside two colleagues, drew sharp criticism. 

“Heritage Trees Lopped for the Srinagar Smart City Project Must be Transplanted”

The Srinagar Smart City Project, already embroiled in corruption scandals, has faced fierce criticism for environmental negligence, particularly the destruction of chinar trees—protected heritage symbols under Jammu & Kashmir law—during infrastructure projects like road expansions and urban beautification. Dozens of centuries-old heritage chinar trees were felled to make way for smart city initiatives, prompting accusations of environmental recklessness from activists and residents. 

Allegations centered on Srinagar Smart City Limited (SSCL)’s failure to secure mandatory environmental clearances or explore transplantation options, despite spending ₹466 crore by 2024 on projects touted as sustainable. Environmentalist Raja Muzaffar Bhat, speaking to The Probe, condemned the authorities, stating, “Big trees can be replanted now as there is a provision for it. Even if the trees are 300 to 400 years old, they can be transplanted. There is a tree transplantation policy in many states. The Delhi government has a policy for tree transplantation and they have transplanted 100-150 year old trees as well. So I don’t think that the government should have any problem with transplanting or replanting chinar trees which were axed in Srinagar city under smart city project.” 

The chinar tree controversy in Srinagar is not an isolated incident but a symptom of the Smart Cities Mission’s failure to uphold its promise of sustainable urban development across India. The project's initial vision of eco-friendly, tech-driven cities has been undermined by a pattern of environmental oversights, with projects prioritising cosmetic upgrades over ecological preservation.

Bhopal’s Smart City Tarnished by Corruption and Cronyism

The Bhopal Smart City Project, managed by Bhopal Smart City Development Corporation Limited (BSCDCL), sought to transform the city with a ₹2,000 crore Area-Based Development (ABD) in T.T. Nagar, smart roads, affordable housing, and Integrated Command and Control Centres. However, the initiative has been mired in corruption allegations, including fund mismanagement, forced slum evictions, and a ₹300-crore tender irregularity probe by the Madhya Pradesh Economic Offences Wing (EOW).

 

In T.T. Nagar, over 1,200 families were displaced without adequate rehabilitation, with funds allegedly diverted to elite-driven developments through inflated land acquisition costs, as documented in a 2017 Housing and Land Rights Network study. The EOW’s 2021 investigation into commercial plot auctions for the ABD revealed a rigged tendering process designed to favor select builders, with plots worth ₹208 crore sold at just 8–9% above base prices, causing a ₹35 crore loss to the state, per EOW findings.

“34 of 100 Smart Cities Saw Forced Evictions” 

“We had conducted a study in 2018. In our study we documented displacement and we found that there were forced evictions in 34 of the 100 smart cities being developed across the country. We also found that Smart City Projects have directly resulted in about 17,700 people losing their homes. For instance, in Tamilnadu alone we found that the government demolished 1700 homes for Smart City Project,” Anagha Jaipal, Program Officer at Housing and Land Rights Network told The Probe.

In Bhopal alone, the Special Purpose Vehicle (SPV) managing the project bypassed Bhopal’s municipal corporation, centralising tendering processes that allegedly favoured contractors with political ties, some linked to electoral bond donations to the ruling BJP, raising suspicions of cronyism in Madhya Pradesh.

Goa’s Smart City Mired in Wasteful Spending and Cronyism Claims

The Panaji Smart City Project, managed by Imagine Panaji Smart City Development Limited (IPSCDL), aimed to transform Panaji into a sustainable urban hub with a ₹1,053 crore budget, including a ₹450 crore sewerage system, smart roads, and heritage redevelopment. Despite ₹760 crore utilised by November 2024, only 36 of 49 projects were completed by March 2025, with delays in major initiatives like the ₹41.1 crore St Inez nullah rejuvenation and ₹6.3 crore smart parking at Miramar. 

RTI findings from 2019 exposed extravagant spending, such as ₹1.2 crore on replacing footbridge tiles and ₹35 lakh on painting zebra crossings, pointing towards inflated costs and potential fund diversion. The SPV’s centralised tendering, bypassing Panaji’s municipal corporation, has raised suspicions of rigged contracts, with opposition leaders alleging that ₹717 crore was embezzled to benefit politically connected contractors. Electoral bond data has also revealed that major SCM contractors, including those donating ₹966 crore and ₹55 crore to the BJP, secured favourable awards. 

“Panjim City Virtually Converted into a War Zone”

“I filed a petition before the High Court in Goa challenging the haphazard manner in which the Smart City work was being carried out. Panjim city was virtually converted into a war zone. After our petition, the judges of the division bench which was hearing the matter went to the site and conducted a site inspection. High Court had also given the government a timeline but despite this they have failed to adhere to the timeline and a lot of work is pending,” states advocate Abhijit Gosavi. 

Gosavi representing Panaji citizens filed the petition before the court criticising the state government for misleading claims about Smart City roadworks completion. Speaking to The Probe Gosavi claims that Smart City issues plaguing Goa is not just about delays, it’s also about corruption. “We had also questioned the substandard work which was being carried out in the name of the Smart City Project. In fact in our petition we had requested that an independent committee has to be appointed on the supervision of the High Court and the entire audit must be done on all the work that has been carried out in the name of Smart City Projects. No one knows where the money has gone. Who has been paid? There is no transparency. We also pointed at some sites which they claim are completed and when we actually went there we found that it was not completed and whatever little was done was of substandard quality,” states Gosavi.

“No More Funding for Smart Cities Mission,” States Director

The Probe reached out to Sanjay Gupta, Director of the Smart Cities Mission, Ministry of Housing and Urban Affairs. We asked him if all the projects have been completed related to the Smart Cities Mission as mentioned in the PIB press release, to which he replied: “I am not authorised to speak on this. I can only say that the mission has been concluded as indicated in our press release.” 

When we asked him if the mission has been concluded then why does the official website of the Smart Cities Mission state that as on April 11, 2025, 518 more projects worth 13,142 crore are ongoing. To which he replies: “Mission has been concluded means that there will no longer be any financial support to the Smart Cities Mission from the government. But in case some projects have not been completed then these projects will be allowed to complete.”

Gupta’s assertion that the Smart Cities Mission has “concluded” with no further central funding directly contradicts the Press Information Bureau’s July 3, 2024, release, which stated, “All ongoing projects are now expected to be completed before 31 March 2025.” This inconsistency points to a lack of accountability, as the SCM’s official website confirms hundreds of projects worth thousands of crores are still awaiting completion. 

The SCM’s failure to secure promised foreign investment, reliance on opaque Special Purpose Vehicles, and inability to deliver futuristic smart cities have squandered public resources, eroded trust, and left India’s urban landscape far from the transformative vision promised by the Modi government.

News