New Delhi, Aug 27 : The central government on Thursday announced 98 cities and towns for development as smart cities based on evaluation of financial and institutional capacities and past track record of urban local bodies.

According to Urban Development Minister M. Venkaiah Naidu, a smart city "is one having provision of basic infrastructure to give a decent quality of life to its citizens, a clean and sustainable environment and application of smart solutions, keeping the citizens at the centre".

Prime Minister Narendra Modi, who launched the Smart Cities Mission in June, had defined a smart city as "one which is one or two steps ahead of the aspirations of people".

The government had announced an ambitious plan to develop 100 smart cities following a promise made by the ruling Bharatiya Janata Party in its election manifesto.

The mission intends to promote adoption of smart solutions for efficient use of available assets, resources and infrastructure to enhance the quality of urban life and provide a clean environment.

Under the smart cities initiative, the focus will be on core infrastructure services like adequate and clean water supply, sanitation and solid waste management, efficient urban mobility and public transportation, affordable housing for the poor, power supply, robust information technology, connectivity, governance, especially e-governance and citizen participation, safety and security of citizens, health and education and sustainable urban environment.

As part of the Smart Cities Mission, each selected city would get central assistance of Rs.100 crore per year for five years.

The smart city mission involves "an area based approach" and is meant to set examples that can be replicated within and outside the smart city.

The 98 cities and towns announced on Thursday were nominated by their respective states and union territories at the end of the first stage of the 'City Challenge' competition in which all the urban local bodies in states and union territories were evaluated. Two nominations are pending.

The cities were selected based on "city challenge competition" with grading done on the basis of criteria that included their revenues, expenditure, availability of infrastructure relating to transport, drinking water and solid waste management.

The selected cities will have to prepare city-level "smart city plans" and these will be evaluated in the second stage of competition based on a broad set of criteria to pick up the top scoring 20 cities for financing during this financial year.

Other cities will be asked to improve upon the identified deficiencies before participating in the next two rounds of competition.

Cities to be selected in the second stage of competition would be provided with central assistance of Rs.200 crore in the first year followed by Rs.100 crore each year during the next three years.

Smart city action plans will be implemented by special purpose vehicles to be created for each city.

The union cabinet had approved an outlay of Rs 48,000 crore for the Smart Cities Mission.