The Centre is looking at multiple revenue mobilisation measures to meet the huge resources required to make the smart cities scheme a success. This is in addition to the Union Cabinet approving an outlay of Rs 48,000 crore for the smart city scheme over the next five years.
A senior official in the Ministry of Urban Development told, “The resources of urban local bodies from collection of user charges, beneficiary charges, impact fees, land monetisation, loans, etc. can be tapped. Innovative financing mechanisms such as municipal bonds to further the credit rating of urban local bodies, pooled financing mechanism, and tax increment financing (TIF), are also being considered.”
Under TIF, if a particular area or zone of a municipal body is developed through a loan, once the project benefiting that area is completed, the residents of that area can be made to bear the cost of the project by increasing property tax for a certain period.