Urban Development and Housing Minister Venkaiah Naidu has directed senior officials of the two ministries to initiate action immediately for operationalizing new initiatives after the presentation of the budget.
Acknowledging the importance of urban development and urban renewal to meet growing aspirations of the people for better urban living, the government has increased Plan Outlay for urban related projects by 251.44 per cent in the budget.
The Plan outlay, which was Rs 6,561.34 cr in the Revised Estimate for 2013-14, has been hiked to Rs 16,497 cr for the current financial year.
Noting that "a neo-middle class is emerging which has aspiration of better living standards", the government has provided Rs 7,060 cr for realizing Prime Minister Narendra Modi's vision of developing one hundred Smart Cities.
According to a senior Urban Development Ministry official, the cities will be developed as satellite towns of large cities and by modernizing the existing mid-sized cities.
He said Smart Cities will accommodate the burgeoning number of people without which the existing cities would soon become unviable.
In order to encourage development of Smart Cities, requirement of the built up area for Foreign Direct Investment (FDI) has been reduced from 50,000 square metres to 20,000 sq metres and capital requirement from USD 10 million to USD 5 million.
To further encourage this activity, such projects committing at least 30 per cent of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalization requirements, with the condition of a three year lock-in.