The state of Smart Cities in India

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About 377 million Indians comprising 31.14% of the country’s population live in urban areas and this is projected to grow to about 600 million (40%) by 2031 and 850 million (50%) by 2051, says data from Census 2011. Urbanization is a good thing as it improves the living standard but it also invites challenges, including meeting accelerated demand for basic services, infrastructure, jobs, land and affordable housing.

Although India lags behind in urbanization but whatever it has been able to achieve over the past years has led to increasing problem of housing, overcrowding in small houses, steady growth of slums and unplanned settlements and a huge effect on delivering basic civic services in urban areas. This challenge can only be addressed with a multi-pronged approach that focuses on different aspects of urban life. By launching programmes like Swachh Bharat Mission (Urban), National Heritage City Development and Augmentation Yojana (HRIDAY), Smart City Mission (SCM) and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Urban Transport, the government has shown its interests and zeal to overcome these challenges.

Most of these projects including Smart Cities are couple of years old and they are yet to deliver significant changes on the ground but experts acknowledge that a beginning has been made and it has great potential for future. At least in the Smart City arena, India has a chance to make the mark without trying to play catch-up as except few cities like Barcelona, few cities have truly gone smart.
“This is an ambitious and audacious goal of the government of setting up 100 smart cities, rejuvenation of 500 cities and housing for all. Critical urban infrastructure is required in order to make the economy efficient. The process of building this urban infrastructure would lead to an explosive growth in the economy as the execution of the vision would entail large scale consumption of cement, metals, plastics, materials and services. It would also lead to innovations and creation of spin-off technologies that would surely make India a global player in building future cities,” says Jaijit Bhattacharya, Partner – Infrastructure and Government Services, KPMG India.

Bad roads, congested streets; no clean drinking water; garbage; unreliable public transportation; non-functional street-lights; crime against women, old people and children; pollution; wrong utility bills; inefficient public grievance centre; and above all, a lack of accountability at the municipal administration are few of the problems with which people of an unplanned, fast growing city, whether in India, or across the globe, can relate. “By deciding to focus on building Smart Cities, India has taken up this challenge. Prime Minister Narendra Modi has brought the focus on urban revitalization by means of the Smart Cities Mission. All the Indian cities have a desire to look at smart solutions to address these challenges,” says NSN Murty, Director & Leader, Smart Cities, PwC India.

“We have to look at smart solutions if we have to improve our cities,” says Milind Torawane, Municipal Commissioner, Surat. Surat is the second largest city in Gujarat. It has bagged the fourth rank under the Smart Cities Mission based on its proposal.

Agreeing with Torawane, Patna Municipal Commissioner Abhishek Singh says, “The development of smart cities will ensure that there is a decent quality of life for all citizens. This will lead to higher productivity in the cities and consequently higher growth.” He gave the example of Patna Municipal Corporation that has started using some element of smart technology to make the city smarter.
The question is, can the technology alone do it or do we have technological as well human resource capability both in government and private sector to make cities smart? The sad answer is no and a lot needs to be done. The core infrastructure elements in a smart city would include adequate water supply, assured electricity supply, sanitation, including solid waste management, efficient urban mobility and public transport, affordable housing, robust information technology, connectivity and digitalization, good governance, especially e-governance and citizen participation, sustainable environment, safety and security of citizens, particularly women, children and the elderly and health and education. Additionally, some smart solutions will be applied to infrastructure and services in area-based development in order to make them better. The strategic components of the Smart City Mission are city improvement (retrofitting), city renewal (redevelopment) and city extension (Greenfield development) plus a Pan-city initiative in which Smart Solutions are applied covering larger parts of the city.

They all need high level of expertise. Building capacity for 100 smart cities is not an easy task and most ambitious projects are delayed owing to lack of quality manpower, both at the centre and state levels. Bhattacharya is of the view that this is really a challenging area given the fact that capacity can’t be built in a week or month or year. If you need engineers, those can only be built over a period of time but this is only possible with improvement of existing resources and aggressively focusing on capacity creation.

The other key challenge is financing smart cities. The government has assessed a per-capita investment cost (PCIC) of ` 43,386 for a 20-year period. Using an average figure of 1 million people in each of the 100 smart cities, the total estimate of investment requirements for the smart city comes to ` 7 lakh crore over 20 years (with an annual escalation of 10 per cent from 2009-20 to 2014-15). This translates into an annual requirement of ` 35,000 crore. One is yet to see how these projects will be financed as the majority of project needs would move through complete private investment or through PPPs, said a note from Smart Cities Council India.

Also, most Urban Local Bodies (ULBs) are not financially self-sustainable and tariff levels fixed by the ULBs for providing services often do not match the cost. Even if additional investments are recovered in a phased manner, inadequate cost recovery will lead to continued financial losses. Most ULBs have limited technical capacity to ensure timely and cost-effective implementation and subsequent operations and maintenance owing to limited recruitment over a number of years along with inability of the ULBs to attract best of talent at market competitive compensation rates.

In addition, there are challenges, on the part of clearance, governance and environment but these are administrative one’s which can be addressed with efficient leadership but capacity building and finance are something on which stakeholders will have to be innovative. Smart Cities are beyond technological intervention. It is a human project and technology can only help in it but as projected, it can’t be an end itself.

Smart City Progress
The government of India aims to build Smart Cities in phased manner. The plan is to do it in two ways – by making towns as satellite towns of larger cities and by modernizing existing small and mid-sized cities. Of the list of 100 towns and cities, 20 cities has already been chosen for the smart city project. These 20 cities will be the first to receive funds, thus kick starting the process of developing them into Smart Cities. The next two years will see the inclusion of 40 and 38 cities, respectively. Of the 100 cities and towns that will graduate into Smart Cities after five years – 24 are capital cities, another 24 are business and industrial centres, 18 are culture and tourism influenced areas, 5 are port cities and 3 are education and health care hubs.

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