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Indian cities are largely managed by the Local Governments, empowered by the Indian Constitutional (74th Amendment) act, 1992. In 2015, the Union Government of India introduced Smart Cities Mission (SCM), in which 100 cities were selected to be developed as Smart City (Ministry of Housing and Urban Affairs, 2015a). The Union Government introduced a Special Purpose Vehicle (SPV) as the implementing agency of SCM (Ministry of Housing and Urban Affairs, 2015b). Each one of these 100 cities needed to establish a SPV, which coordinate this mission. The decision to establish SPVs opens up many pertinent questions regarding its legitimacy of being an urban institution. SPVs have not been used in overall city administration yet, so in this area performance of SPVs, are yet to be known. The paper investigates the establishment of SPVs, its authenticity and its contribution to city development. It checks the legal support of its constitution. The paper argues about the achievements of the SPVs over the traditional governance process with the help of governance analysis methods (Urban Governance Index). To streamline the paper, authors have selected (to investigate) two Indian cities Pune and Varanasi wherever needed. The paper also discusses the historical context of SPVs, functioning module of SPVs for project planning and implementation. Further, the findings of the paper suggest that because SPVs are being used for a small pilot area of the cities, enlarging the SPV mechanism to the level of Local Government may translate into the similar type of governance system.

The Rationale of SPV in Indian Smart City Development