By Snighdha Devi
India’s Smart Cities Mission (SCM), launched in 2015, marked a major policy shift towards technology-enabled, citizen-centric urban development. Under this programme, 100 cities were selected to implement projects focused on digital governance, mobility, infrastructure modernization, environmental sustainability, and quality-of-life improvements. Over the past decade, the Smart Cities Mission has produced visible results—including integrated command and control centres, mobility solutions, public Wi-Fi, and improved urban spaces. Yet, despite these gains, the mission faces a constellation of challenges that affect project delivery, long-term sustainability, and equitable outcomes. This article examines these challenges in the current context, drawing on government reports, academic literature, and policy analyses.
1. Financing and Fiscal Sustainability
One of the most persistent barriers to implementing smart city initiatives in India is financial sustainability. Smart cities require major capital investment in physical infrastructure, sensors, digital platforms, and integrated command systems. Beyond initial investments, the long-term operational and maintenance (O&M) costs of ICT systems are substantial.
While the central government allocates financial support to each selected city, municipal bodies are often unable to mobilise adequate matching funds. Smaller municipalities in particular lack strong revenue bases or consistent fiscal discipline. Their ability to raise municipal bonds, attract private partners, or secure long-term debt is limited by low creditworthiness.
The Public–Private Partnership (PPP) model—encouraged under the mission—has achieved mixed results. Private investors often hesitate because of regulatory uncertainty, slow approvals, and unclear risk-sharing structures. As highlighted in parliamentary evaluations, many cities face difficulty ensuring timely fund disbursement, meeting their financial commitments, and sustaining projects after the initial grant period.
These constraints raise an important question: even when infrastructure is completed, will cities have the resources to maintain and upgrade systems after the Smart Cities Mission period ends? In many cases, the answer remains unclear.
2. Institutional Fragmentation and Governance Challenges
Smart city development requires coordination across several actors: municipal corporations, state departments, central agencies, technology vendors, utilities, and private partners. In practice, this leads to overlapping responsibilities, fragmented decision-making, and governance bottlenecks.
To improve project management, the Smart Cities Mission created Special Purpose Vehicles (SPVs) in each participating city. While SPVs have accelerated procurement processes and administrative flexibility, they have also raised concerns about democratic accountability because they often operate parallel to municipal structures.
Frequent transfers of key officials, shortages of skilled staff, and political changes disrupt project continuity. Cities with weaker administrative capacity struggle particularly with planning, technical vetting, and long-term integration of projects. Government reports repeatedly identify governance and institutional capacity as core barriers inhibiting the scaling of successful pilots into citywide systems.
3. Technology Choices, Interoperability, and Maintenance Issues
Smart-city development relies heavily on technological infrastructure—sensors, cameras, fibre networks, digital platforms, and analytics systems. Decisions on technology procurement have long-term implications for system functionality and cost.
A key challenge is interoperability. Many projects are implemented in silos by different vendors, using proprietary platforms that do not easily integrate with each other. As a result, command centres often aggregate data from multiple unconnected subsystems, limiting their analytical potential.
Another challenge is maintenance. ICT systems require regular calibration, hardware replacement, and software updates. In several cities, large numbers of installed devices—such as CCTV cameras—become non-functional after a few years due to inadequate O&M funding or poor-quality installation. A report in 2025 noted that in some cities, almost half of CCTV units under smart city projects were non-functional, highlighting maintenance gaps.
Technology obsolescence is an additional risk. Rapid changes in digital technologies can render systems outdated within a few years, requiring expensive upgrades that cities may not be able to afford. Without robust lifecycle planning, many smart city components risk becoming short-lived showcases rather than sustainable assets.
4. Data Governance, Privacy, and Cybersecurity
Smart-city infrastructures generate enormous quantities of data: mobility patterns, utility consumption, surveillance footage, citizen behaviour, and environmental data. Managing this data responsibly is a major contemporary challenge.
India’s evolving data protection laws have not yet established fully mature frameworks for urban data governance, particularly concerning:
data privacy,
public consent,
data-sharing protocols,
algorithmic transparency, and
cybersecurity safeguards.
Integrated Command and Control Centres (ICCCs) store and process sensitive real-time data. Without clear oversight, they risk enabling mass surveillance, mission creep in policing, and unauthorized data use. Academic critiques warn that unless ethical frameworks are strengthened, smart-city technologies may compromise civil liberties rather than enhance democratic governance.
Cybersecurity vulnerabilities are also growing. Attacks on urban infrastructure—such as traffic management systems, power grids, or public databases—pose systemic risks. The need for reliable cybersecurity protocols, audits, and disaster recovery plans is urgent across all smart-city deployments.
5. Social Equity and the Digital Divide
The Smart Cities Mission aspires to create inclusive, citizen-focused urban systems. However, digital literacy, affordability of devices, and access to reliable internet vary significantly across urban populations. This creates a digital divide that can limit equitable participation.
For many low-income households, migrants, women, and senior citizens, accessing digital platforms for public services or grievance redressal is challenging. If critical services become fully digital without parallel offline channels, marginalised groups risk being excluded.
A related challenge is that many smart-city projects prioritize central business districts or selected neighbourhoods, often leaving informal settlements untouched. As a result, benefits accrue unevenly across socioeconomic groups, creating “islands” of smart infrastructure rather than holistic urban improvement. Research suggests that top-down, technocratic approaches often overlook the needs of vulnerable communities unless participatory planning mechanisms are strengthened.
6. Legacy Infrastructure and Urban Planning Constraints
Most Indian cities were not designed with modern urban planning principles. Many have congested cores, informal settlements, irregular street patterns, and old utility networks. Retrofitting digital systems onto such environments is inherently difficult.
Key constraints include:
complex land acquisition issues;
outdated drainage, water, and sewage networks;
limited space for new mobility infrastructure;
encroachments and unplanned land use;
high population density in older areas.
As a result, implementing large-scale smart mobility systems or underground utility corridors is significantly more challenging than in planned cities. The Smart Cities Mission originally emphasised area-based development (ABD) for this reason—focusing on specific pockets rather than the entire city. However, this has led to criticism that projects are concentrated in privileged areas.
Climate vulnerabilities add another dimension. Frequent flooding, rising temperatures, and heat islands mean that smart-city infrastructure must be climate-resilient, but many cities lack integrated climate-sensitive planning.
7. Procurement, Technical Skills, and Capacity Gaps
Smart-city procurement involves sophisticated technological systems, requiring expertise in system integration, cybersecurity, and data analytics. Yet many municipalities lack technical specialists capable of evaluating vendor proposals, negotiating contracts, and overseeing quality control.
Procurement rules often prioritise the lowest-cost bidder, which can compromise quality. Technology procurement also needs agility, but public procurement systems are typically slow and bureaucratic.
Staff shortages, limited training, and lack of permanent technical cadres add to the challenge. Without sustained capacity-building and institutional reforms, cities struggle to manage both the implementation and long-term maintenance of smart-city systems.
8. Measuring Impact: The Problem of Evaluation
Smart-city success is often measured by project completion rather than by long-term impact. Many cities highlight physical achievements—number of cameras installed, kilometres of fibre laid, number of dashboards created—without providing evidence of improved quality of life.
There is a growing need for:
outcome-based metrics,
independent audits,
citizen satisfaction surveys, and
long-term environmental and economic impact evaluations.
Academic assessments argue that without rigorous evaluation frameworks, it is difficult to differentiate between truly transformative projects and symbolic infrastructure.
9. Political Economy, Participation, and Local Dynamics
Urban development in India is shaped by political, social, and economic forces. Smart-city interventions often intersect with entrenched systems of patronage, informal markets, and land-value dynamics. Projects that disrupt existing arrangements may face resistance.
Citizen engagement is essential for legitimacy and long-term sustainability. While the Smart Cities Mission requires public consultations, their quality varies widely. In many cases, consultations remain superficial or limited to online platforms, excluding digitally marginalised populations.
Sustained and meaningful community involvement can help cities prioritise appropriate projects, monitor implementation, and ensure equitable access to services. Without this, smart-city initiatives risk being perceived as top-down and disconnected from local needs.
10. Pathways Forward
Despite these challenges, India’s Smart Cities Mission has created a foundation for more digitally empowered, environmentally resilient cities. Going forward, the following strategies may strengthen outcomes:
Ensure sustainable financing mechanisms through blended finance, municipal bonds, and ring-fenced O&M budgets.
Adopt open, interoperable technology standards to prevent vendor lock-in.
Strengthen legal frameworks for data governance including privacy, consent, cybersecurity, and auditability.
Invest in municipal capacity-building, technical cadres, and partnerships with academic institutions.
Embed social inclusion into design, ensuring multilingual, accessible digital services and parallel offline options.
Develop robust evaluation frameworks that emphasise outcomes rather than inputs.
Institutionalise participatory planning to ensure communities shape priorities and oversight.
11. Conclusion
India’s smart-city journey is ambitious and transformative, but it is also complex. Cities across the country have demonstrated innovation and the ability to implement cutting-edge solutions. Yet the mission continues to be constrained by financial limitations, governance deficits, technological fragmentation, social inequities, planning challenges, and emerging ethical concerns.
To move from pilot projects to sustainable, citywide transformation, India must view smart-city development not only as a technological challenge but also as a social, institutional, and governance challenge. If these structural issues are addressed, the next decade can witness deeper integration of technology with inclusive, climate-resilient, and citizen-centric urban development.
References
Press Information Bureau. (2024). Year End Review 2024: Ministry of Housing and Urban Affairs. Government of India.
Standing Committee on Housing and Urban Affairs. (2023). Smart Cities Mission — An Evaluation. PRS India.
National Institute of Urban Affairs (NIUA). (2021). Smart City Mission: Issues and Challenges.
ResearchGate. (2020). Challenges for Smart Cities in India.
Times of India. (2025). Crumbling security: 1,500 CCTVs of 3,686 non-functional.
Prakash, D., et al. (2025). Why do smart city projects fail to create impact? ScienceDirect.
Various studies on climate-resilient urban planning and Indian smart-city implementation.
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