NEW DELHI: Prime Minister Narendra Modi will on Thursday launch three ambitious schemes aimed at developing cities and towns as "new engines for growth", projects which will entail an investment of over Rs 3 lakh crore in the next five years.

Urban development minister M Venkaiah Naidu said the launch of three projects- 100 smart cities, Atal Mission for Rejuvenation and Urban Transformation ( AMRUT ) and housing for all- will herald a new urban era.

"The journey for team India begins tomorrow," he said, noting that states and local bodies will play a key role in the execution of these schemes which will also see a lot of private participation.

"Effective management of growing urbanisation is a major challenge in making of resurgent India. Resource management is a major challenge and our government sees an opportunity in this," he told reporters.

500 cities having 1 lakh and more population will be chosen for AMRUT project, he said, adding that neither the Centre not states will have any discretion in choosing 100 cities through a competition for smart cities scheme.

Modi will unveil the criteria and guidelines for the smart cities and other schemes and it will be followed by a two-day workshop in which over 1000 mayors, municipal heads, ministers concerned from states and their chief secretaries will take part.

Representatives of embassies, which have shown interest for their countries' participation in these projects, will also take part in the workshop, he said.

"These 500 cities will become engines of growth and they in turn should develop into smart cities," Naidu said.

Guidelines to be shared tomorrow have been framed on the basis of consultation the Centre had in the last one year with states, urban local bodies and private stakeholders.

Smart cities project will be based on PPP model, he said.