India's urban ambitions

The Government of India has an ambitious smart cities mission to improve the quality of life, attract people and investment and set in motion a virtuous cycle of growth and development in India’s cities and urban areas. As per the 2011 census, India’s urban population was only 31% of the total but accounted for 63% of the Gross Domestic Product (GDP) of the country. By 2030, the urban population will be 40% of the total and will account for 75% of the nation’s GDP. With this view, the Government has decided to streamline development of physical, institutional, social and economic infrastructure in the cities and urban areas under the umbrella ‘smart cities’ mission.

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What is a Smart City?

In the simplest of terms, ‘smart’ in this context means ‘getting more for less’. Smart Cities tap a range of approaches - digital and information technologies, urban planning best practices, public-private partnerships, and policy change - to focus on the most pressing needs and on the greatest opportunities to improve living conditions. The development of ‘smart’ cities, therefore, needs to focus on streamlining physical, institutional, social and economic infrastructure to make development impacts felt across all four aspects. With this in view, the Smart Cities Mission seeks to improve core infrastructure of the cities, provide a decent quality of life, maintain a clean and sustainable environment and incorporate advanced technological solutions wherever possible.

100 cities across the country have been selected for the Smart Cities Mission in four batches. Smart City Proposals from each of these cities’ Municipal Boards, were evaluated on the criteria of:

The first batch includes a list of 20 ‘Lighthouse Smart Cities, which are strategically important for their respective regions – economically, politically or geographically, and will spearhead the smart cities initiative.

Atal Mission for Rejuvenation and Urban Transformation

Complementing the Smart Cities Mission is another Government of India initiative, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which is intended to provide water supply, sewerage and urban transportation to every household in 500 urban zones. These zones should meet the following criteria:

A population of 100,000 or above.

Capital cities/towns of states/Union Territories (UTs) not covered under 100 Smart Cities Mission.

All cities/towns classified as heritage by Ministry of Urban Development (MoUD).

The stem of main rivers (population 75-100,000).

Cities from Hill states, islands and tourist destinations (not more than 1 from each state).

The focus of AMRUT will be primarily on improving service delivery, resource mobilization, capacity building and bringing about greater transparency in the municipal functioning of the selected urban zones. Many of the projects undertaken will have synergies and/or similarities with the Smart Cities Mission projects.

Development of Core Infrastructure

The development of core infrastructure will focus on the following aspects:

a. Adequate Water Supply

b. Adequate Electricity Supply

c. Sanitation (Solid Waste Management)

d. Efficient Urban Mobility & Public Transport

e. Affordable Housing

f. Robust IT Connectivity & Digitization

g. Good Governance (e-Governance & Citizen Participation)

h. Sustainable Environment

i. Safety and Security of Citizens (especially women, children and elderly)

j. Health & Education

These developments will focus on Area-based projects (like converting slums to planned areas, more intensive infrastructure services, central zone developments, co-creation of new layouts), Greenfield developments (on the outskirts of the city) and Pan-City Technology-driven Smart Solutions (for e-Governance, Waste Management, water management, energy management,  urban mobility and others). In other words, the strategy of the Smart City Mission can be summarized with the following aspects:

a. City Improvement (retrofitting)

b. City Renewal (redevelopment)

c. City Extension (greenfield development)

d. Pan City Smart Solutions

The end-goal is to improve livability (by improving quality of living, infrastructure, and services, creating new employment opportunities and enhancing incomes) and generating inclusiveness in the urban area.

Sample projects covered under the Smart City mission include:

i. Mixed land usage for compatible activities, which require flexibility in land usage laws and building by-laws.

ii. Inclusive housing development, focusing on the economically disadvantaged sections.

iii. Developing walkable localities to decrease congestion, air pollution, and resource depletion and improve the local economy, promote interactions and ensure security.

iv. Preserving and developing open spaces like parks, playgrounds, and recreational spaces to contribute to improved quality of life, reduce urban heat island effects and promote ecological balance.

v. Promoting a variety of transport options like transit-oriented development, public transport, and last-mile para-transport.

vi. Citizen-friendly and cost-effective governance (online services) to promote accountability and transparency.

vii. City Identity development based on its main economic activity and cultural aspects like local cuisine, arts & crafts, sports facilities etc.

viii. Smart solutions incorporating technology in infrastructure and services, developing resilience to natural disasters and cost-efficient usage of resources.

Financing plan for Smart Cities Mission

The MoUD has provided guidelines for the creation of Special Purpose Vehicles (SPVs) for the purposes of planning, execution, a release of funds and operation and monitoring of projects. The State/Union Territory government and Urban Local Body will have a sacrosanct 50:50 partnerships in the SPV. Additionally, a private sector or financial institution can hold a stake in the SPV on the condition that the sum total of the State/UT and Urban Board’s stakes in the SPV Limited Company is always greater than the stake value of the private sector/bank.

Key responsibilities of the SPVs are:

i. Approving and sanctioning projects

ii. Complying with requirements of MoUD

iii. Mobilizing Resources

iv. Appointing third party Review & Monitoring Agency

v. Overseeing Capacity Building initiatives

vi. Facilitating inter-linkages of academic institutions and organizations

vii. Ensuring timely project completion

viii. Reviewing Mission activities

ix. Ensuring Quality Control

x. Facilitating Joint Ventures/PPPs with private sector

xi. Supervising contracts, partnership deeds, and service delivery agreements

xii. Collecting user charges and taxes/surcharges as applicable for the projects.

Get Me Experts has identified 27 industry sectors from the numerous projects selected and companies shortlisted for the Smart Cities Mission. These sectors can be classified as primary, secondary or tertiary, depending on the level of relevance and supporting skills and services needed. 

The Government, for now, plans to invest 15 billion USD for Smart Cities (and 7.5 billion for AMRUT), of which 7.2 billion will be invested over the next 5 years. Additional funds are envisaged through Public-Private Partnerships (PPPs) with private multinational firms or banks. Also, the private sector will play the role of contractor/consultant for the projects. Power, ICT and integrated townships will see the maximum impact of the transformation, which also calls for a focused financial mechanism in these areas.