The Indian Government has said that it is planning to link user charges in urban areas to inflation for financing the Smart Cities Mission, the media reports said.
Commenting on the development, an Urban Development Ministry Official told the media, "A proposal has been mooted for automatic partial indexing of user charges in urban areas to inflation and quality of services to increase cost recovery to at least cover operation and maintenance charges."
"For example, if a special water project is taken up for supplying 24-hour supply in the proposed Smart City then, as per the proposal, some charges would be levied to cover the operation and maintenance costs," he added.
As per reports, the Government has come up with this proposal as there will be a huge resource requirement for Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
The Government is also developing a Model Concession Agreement in urban water supply based on tariff indexation to inflation to minimize risks.