The Narendra Modi government is reportedly looking to reduce the size and pace of execution of its Smart City Mission as the deadline to select cities eligible for Central funds under the scheme nears.
Though the Centre is not interested to postpone the project, it may fund only 10 cities against the proposed 20 in the first year if proposals sent by states do not meet quality standards.
The Centre will announce the first list of smart cities on 26 January, 2016, and the last date for states to submit proposals to get funds from the Centre for smart cities is 15 December.
The number of cities to be selected in the first round would be "lower" if states fail to furnish complete area development plans to urban development ministry by the cut-off date, a source in the government told Business Standard.
"The government is sure of at least 10 quality proposals, though it would like to start with 20," said the source.
Maharashtra, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Odisha, Tamil Nadu, Karnataka and Andhra Pradesh are expected to submit "quality" proposals by 15 December.
While most BJP-ruled states are ready with their city development plans, Telangana and Chhattisgarh are "seriously" working to submit good proposals, said the report.
Pune, Thane, Navi Mumbai, Vizag, Jaipur, Udaipur, Surat, Bhopal and the New Delhi Municipal Council (NDMC) area of Delhi are likely to make it to the first list, said sources close to the development.
"Opportunities will lie in the cities that don't make it to the first list as everything will go back to the drawing board for them," said Pratap Padode, founder and director of Smart Cities Council India.
Out of 100 cities shortlisted for development under the Smart City programme, 20 were proposed to get funding from the central government in the current fiscal year.
Under the Smart City project, each selected city would receive Rs 500-crore funding, which will released in phases, from the Centre and states, urban bodies and private partners would bear the remaining amount.