In the recently presented interim Budget for the fiscal year 2024-25, Finance Minister Nirmala Sitharaman disclosed a significant decrease in budget allocations for key schemes of the central government, specifically the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission. The revised estimates for 2023-24, initially set at Rs 13,200 crore, were reduced to Rs 10,400 crore in the interim budget. Notably, the budget estimates for these schemes in the previous fiscal year stood even higher at Rs 16,000 crore.
During the announcement, Minister Sitharaman emphasized the encouragement for states and large cities to undertake Metro lines through the transit-oriented development route. As of September 2023, over 6,000 projects, collectively valued at more than Rs 1.1 lakh crore, had been completed. The overarching Smart Cities initiative involves 100 cities where projects covering various sectors such as mobility, energy, water, sanitation, solid waste management, public spaces, social infrastructure, and smart governance are underway.
Keval Valambhia, COO of CREDAI-MCHI, an apex body of real estate developers, expressed concerns over the challenges faced by the Smart Cities Mission. Valambhia emphasized that focusing solely on technology might not be enough to address the complexities of urbanization. A McKinsey report suggested a massive capital expenditure of $1.2 trillion by 2030 to make cities more livable. Despite current challenges, Valambhia is optimistic about future budgetary allocations, stating that CREDAI-MCHI expects a substantial increase.
On a different note, the Swachh Bharat Mission, another flagship scheme, witnessed a doubling of its budget from Rs 2,550 crore in the revised estimates of the 2023-24 budget to Rs 5,000 crore in the interim budget. However, it’s noteworthy that the budgetary allocation for the same mission in the budgetary estimates of 2023-24 remained unchanged at Rs 5,000 crore.
This budgetary adjustment raises concerns about the pace and effectiveness of ongoing urban development projects and highlights the need for sustained financial support to achieve the ambitious goals set under the Smart Cities Mission and related initiatives.
Also read: Union Budget 2024: Real Estate Perspectives from Industry Leaders