Will the fund­ing for smart cities be enough?

The Cabi­net’s ap­proval for 100 smart cities is a wel­come step, but the funds al­lo­cated are not likely to be ad­e­quate for the met­ros

HT Estates - - HTESTATES - HT Es­tates Cor­re­spon­dent

While most ex­perts have wel­comed the Union Cabi­net’s ap­proval for 100 smart cities project as a “mile­stone de­ci­sion in the devel­op­ment roadmap of In­dia,” oth­ers say that the amount al­lo­cated is suf­fi­cient for small cities but not enough for the met­ros.

Chaired by Prime Min­is­ter Naren­dra Modi, the Cabi­net this week cleared the Smart Cities Mission — un­der which 100 smart cities would be built — and the Atal Mission for Re­ju­ve­na­tion and Ur­ban Trans­for­ma­tion ( AMRUT) for 500 cities with out­lays of ₹ 48,000 crore and ₹ 50,000 crore, re­spec­tively. Un­der the Smart Cities Mission, each se­lected city would get cen­tral as­sis­tance of ₹ 100 crore per year for five years.

Cities to be de­vel­oped will be se­lected through a ‘com­pe­ti­tion’ in­tended to as­cer­tain their abil­ity to achieve mission ob­jec­tives. Each state will short­list a num­ber of smart city as­pi­rants, which will pre­pare pro­pos­als for the Cen­tre.

The aim of the mission is to more ef­fi­ciently utilise avail­able as­sets, re­sources and in­fra­struc­ture to en­hance qual­ity of ur­ban life and pro­vide a clean and sus­tain­able en­vi­ron­ment. 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, power sup­ply, ro­bust IT con­nec­tiv­ity, gov­er­nance, es­pe­cially e-gov­er­nance.

“The Cabi­net ap­proval for 100 smart cities project is a mile­stone de­ci­sion in the devel­op­ment roadmap of In­dia. The con­cept of smart cities cre­ates op­por­tu­nity for po­ten­tial ur­ban sec­tors t o t rans­for m t hem­selves into highly equipped, self sus­tained and mod­ernised set­tle­ments through gov­ern­ment aid. The ini­tia­tive will help re­duce pres­sure on the ex­ist­ing metro cities, al­low­ing dis­in­te­gra­tion of pop­u­la­tion evenly,” says Shrikant Paran­jape, chair­man, Paran­jape Schemes (Con­struc­tion) Ltd.

The scope of im­prove­ment un­der the Smart City Mission is am­bi­tiously wide­spread to in­clude wa­ter sup­ply, san­i­ta­tion, waste man­age­ment, trans­porta­tion, hous­ing for poor, power sup­ply, among oth­ers. For a mid-sized city th­ese as­pects can be com­fort­ably worked upon and de­vel­op­ments can be no­ticed within the av­er­age bud­getary al­lo­ca­tion of ₹ 500 crore per city. So cities like Varanasi, Vizag, Ajmer etc. can stand to draw huge benefits out of this mission, says Gu­lam Zia, ex­ec­u­tive direc­tor, Knight Frank In­dia.

How­ever, for a city like Mumbai where trans­porta­tion projects like the trans har­bour Link or the Metro Phase 3 can it­self cost up­wards of ₹ 10,000 crore each, the pro­posed amount may not even suf­fice for a frac­tion of the in­ter­est cost of th­ese projects. In such cases a bal­anced al­lo­ca­tion of re­sources will be the big­gest chal­lenge. More­over, the fear that real es­tate may take prece­dence over the broader eco­nomic growth agenda looms large in such situa- tions, as ob­served in the case of SEZs ear­lier, wherein the car­riage was seen pulling the horse, he adds.

Smart cities will strengthen the in­fra­struc­ture in In­dian cities and drive the econ­omy. The satel­lite towns will act as mag­nets of em­ploy­ment. Smart cities are also ex­pected to pro­vide smart so­lu­tions for ef­fi­cient use of avail­able as­sets, re­sources and in­fra­struc­ture with an ob­jec­tive to im­prove eco­nomic ef­fi­ciency, pro­vide bet­ter qual­ity of life and pro­mote sus­tain­able ur­ban devel­op­ment, says R K Pan­palia, MD, Wave In­frat­ech.

While the out­lay of ₹ 100 crore per city for the Smart City pro­gramme may ap­pear to be on the lower side, this would hope­fully be sup­ple­mented by the state gov­ern­ment and the cor­po­ra­tions / ur­ban lo­cal bod­ies and more im­por­tantly the pri­vate sec­tor. How­ever, for pri­vate sec­tor play­ers to in­vest in this space, most cities would have to take a relook at their tar­iff struc­ture for ur­ban ser­vices so that they not only re­cover the cost of ser­vice de­liv­ery (which only a few cities cur­rently do) but are also able to ser­vice th­ese in­vest­ments, says Arindam Guha, se­nior direc­tor, Deloitte in In­dia.

Both the smart city pro­gramme and the new Ur­ban Re­newal Mission which is tar­geted at bridg­ing ser­vice de­liv­ery in­fra­struc­ture gaps would need to work hand in hand to demon­strate benefits on the ground, he adds.

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