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State demands enhanced funding pattern for Smart City project in India

State officials in Himachal have called on Central Government to revise its funding pattern for the development of a Smart City project in one of its cities.

The city of Dharamsala, which is located in the state of Himachal Pradesh has a population of around 54,000 - and has been selected to be developed into a Smart City by the Union Urban Development Ministry.

However, state officials and Central Government are now at loggerheads over the funding breakdown of the innovative initiative - with state officials calling for the funding pattern to be enhanced from 50:50 to a ratio of 90:10 - as had been originally conveyed by the Union Finance Ministry.

A report circulated today has confirmed that Chief Minister Virbhadra Singh has formally written to the Prime Minster in which he has requested that the fund sharing ratio for the Smart City project should be 90:10.

His reasoning behind this plea is that Himachal has already given the proportionate share required.
The report stated, "It is reliably learnt that Chief Minister Virbhadra Singh has written to the Prime Minister that the fund sharing ratio for the Smart City project should be 90:10."

"Himachal has already given its share of Rs 18.60 crore against the first installment of Rs 186 crore received from the Union Urban Development Ministry."

Dharamshala is the lone city from Himachal which has made it to the list of cities chosen to be developed as Smart Cities by the Union Urban Development Ministry. It was on October 28, 2016 that Himachal Government had received a letter from Union Finance Ministry where it was conveyed that the funding to be received under both Smart City and Amrut projects would be on a 90:10 fund sharing.

However, now Union Urban Development Ministry has categorically said that the fund sharing pattern between the Centre and State would be 50:50. As such Himachal will have to bear 50 per cent of the Rs 1,000 crore out of the total Rs 2,106 crore project. The remaining Rs 750 crore will be raised under public-private partnership (PPP) mode and Rs 256 crore would come under convergence from various Central schemes.

The report continued by saying, "Following this confusion based on the communication from the two Central ministries of Finance and Urban Development, the issue has been taken up afresh with the Chief Minister writing to the Centre," said a senior official on condition of anonymity.

"Prior to the Chief Minister writing on the issue, the State Finance and Urban development departments had tried to convince the Union Urban Development Ministry about 90:10 fund sharing."

The selection of Dharamsala as a Smart City was embroiled in controversy as Shimla Municipal Corporation had moved High Court accusing the Himachal Government of fudging facts to get the project for Dharamsala. The town happens to be the Assembly constituency of Town and Country Planning (TCP) Minister Sudhir Sharma.

The state government has constituted a Special Purpose Vehicle (SPV) for the implementation of the Smart City projects. The task of having LED street lighting has been undertaken and tenders for having underground dustbins too have been given. Several other projects for creating civic facilities like ample parking, 24X7 water and electricity supply, toilets and walking trails along the roads within the town form part of the smart city project.