Q.92
Given below are two statements
Statement (I) : Special purpose vehicle for smart cities creates operational dependency and regulations
Statement (II) : Special purpose vehicle encourages the state government to adopt the best practices.
In light of the above statements, choose the most appropriate answer from the options given below.
- Special Purpose Vehicles (SPVs) under Smart Cities Mission:
- Statement (I) is incorrect: SPVs are established as private limited companies under the Companies Act, 2013, with 50:50 equity shared between the State and the Urban Local Body (ULB). They were created specifically to ensure operational autonomy, financial flexibility, and independence from cumbersome bureaucratic red tape, rather than creating operational dependency.
- Statement (II) is correct: By partnering with private corporate entities, issuing municipal bonds, and executing innovative urban projects, SPVs encourage State and Municipal administrations to absorb corporate governance and global best practices.
- Conclusion: Statement (I) is incorrect but Statement (II) is correct, making Option 4 correct.
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