For the first time, the Finance Commission has created the provision for Rs.8,000 crore incentive grant for eight states for incubation of one new city each as a pilot. The housing and urban affairs ministry will come up with the framework for this, which will be taken up on a challenge mode.
“We will start work on this. For several years, no new city has been developed and hence this need was felt. We have taken a policy decision that all new cities should be developed on the principle of Smart Cities. It will be too early to say whether these will be completely greenfield cities,” Union housing and urban affairs secretary Durga Shankar Mishra said.
The 15th Finance Commission in its report has talked about the need for both rejuvenation of old cities and setting up of new cities. It said the challenge of setting up infrastructure in greenfield cities can be less daunting than the problem of setting up such facilities in old established cities. On the other hand, the development of greenfield cities runs into the problem of land acquisition and rehabilitation.
“Given these complexities, it is better to start on a pilot basis and, hence, we recommend a performance-based challenge fund of Rs.8,000 crore to states for incubation of new cities. The amount available for each proposed new city is Rs.1,000 crore and a state can have only one new city under the proposed scheme,” the commission said in its report.