Smart Cities Mission: Centre issues advisory for special purpose vehicle in 5 broad domains

In a major decision, the Union Housing and Urban Affairs Ministry has issued an advisory for states repurposing of Smart Cities' Special Purpose Vehicles (SPVs).

The Smart Cities Mission (SCM) launched in 2015 marked a significant shift in urban development strategy by promoting city-level innovation and integrated infrastructure delivery. 

Under the Mission, Special Purpose Vehicles (SPVs) were established 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.

Outcome

In the past decade, SPVs have demonstrated the ability to deliver complex, multi-sectoral projects with agility and innovation. As of March 2025, over 93% of the 8,000 plus projects under 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.

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.

The Government of India is of the view that these entities should continue to operate beyond the completion of the Smart Cities Mission on 31.03.2025. To this effect, the Ministry has issued an advisory outlining the envisioned future role of SPVs and a roadmap for the continued functioning of ICCCs.

Road Ahead

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,”read an official notification.