Belagavi risks losing the CITIIS 2.0 urban development project after organisational delays and a funding dispute between the State Government and the Belagavi City Corporation (BCC). The City Investments to Innovate, Integrate and Sustain programme, launched by the Union Ministry of Housing and Urban Affairs in November 2023, selected 18 cities nationwide with Belagavi the sole Karnataka city. The project, won in March 2024 with the VIISWAS proposal, was estimated at Rs 1,653 mn including a central grant of Rs 750 mn. A quadrilateral agreement in March 2025 committed the Centre and the State Government to contribute 40 per cent each while BCC would provide the remaining 20 per cent in instalments, and the Centre released Rs 75 mn as first instalment. Implementation stalled as the required Environmental and Social Impact Assessment (ESIA) and Environmental Clearance were not secured, with repeated re-tendering and cancellation of bids delaying the process. Litigation by the lowest bidder has reached the Supreme Court and could further disrupt timelines if a stay is granted. Delays in appointing a consultancy for the ESIA have been compounded by environmental clearance that can take nine months, and the late start threatens to push the project beyond permissible timelines. The State Government has reportedly declined to release its 40 per cent share and suggested using State Finance Commission grants, a proposal opposed by the BJP-led majority in BCC and questioned by local legislators. Belagavi Smart City Limited (BSCL) has been criticised for inadequate preparation, repeated rejections by senior urban development officials and failure to secure land. BSCL is considering scaling down the project to about Rs 750 mn relying on the Centre grant and BCC contribution, while the City Corporation prepares for a special general body session to decide on releasing its instalment. Civic leaders warn that funds alone will not suffice and that timely coordination and resolution of legal and financial hurdles are essential to modernise waste management. Failure to resolve these issues could result in loss of major Rs 750 mn opportunity to strengthen sustainable urban infrastructure.