A 4,00,000 booster dose for econ­omy

HT Estates - - FRONT PAGE - Ru­pees in crores

The smart cities mis­sion and Atal Mis­sion for Re­ju­ve­na­tion and Ur­ban Trans­for­ma­tion (AMRUT) schemes launched by prime min­is­ter Naren­dra Modi will at­tract huge in­vest­ments from in­ter­na­tional com­pa­nies and even the private sec­tor which has been shy­ing away from pub­lic private part­ner­ships, say ex­perts.

“With the PM’s in­ter­na­tional over­tures al­ready made, the smart cities mis­sion will at­tract huge in­vest­ments from in­ter­na­tional com­pa­nies and even the private sec­tor which has been shy­ing away from PPPs. The smart cities mis­sion and AMRUT are likely to in­fuse a t otal amount of ₹ 4, 00,000 crore, once in­te­grated with all other mis­sions like Dig­i­tal In­dia, Swachh Bharat mis­sion, Hous­ing for all etc,” says Pratap Padode, founder-director, Smart Cities Coun­cil In­dia.

How­ever, to suc­cess­fully im­ple­ment th­ese schemes, there are many chal­lenges that need to be over­come. Many states are keen on up­grad­ing as many as four to five cities, if not more, to smart cities. Given the bud­getary and re­lated con­straints, it is un­likely that the ur­ban de­vel­op­ment min­istry’s (MoU) smart city pro­gramme would be able to ac­com­mo­date more than one or two cities in each state. States and ur­ban lo­cal bod­ies may, there­fore, need to de­velop their

This ini­tia­tive seeks to pro­vide hous­ing to all in ur­ban ar­eas by 2022

own repli­ca­ble mod­els and plans to up­grade all iden­ti­fied cities to smart cities, while learn­ing from and lever­ag­ing the MoUD Smart City pro­gramme to the ex­tent pos­si­ble, says Arindam Guha, se­nior director, Deloitte in In­dia.

The bud­getary out­lay for an in­di­vid­ual city under both schemes ie AMRUT and Smart City is ₹ 100 crore each ev­ery year. Given the sig­nif­i­cant out­lays en­vis­aged for ba­sic in­fra­struc­ture (like wa­ter and sew­er­age net­work ex­pan­sion / re­place­ment) alone, even after state and lo­cal gov­ern­ment in­vest­ments, private sec­tor in­vest­ment would be crit­i­cal. This in­vest­ment may not be forth­com­ing un­less the tar­iff lev­els (and col­lec­tions) for ur­ban ser­vices are ad­e­quate for re­cov­er­ing cost of ser­vice de­liv­ery and ser­vic­ing private in­vest­ments made.

Jai­jit Bhat­tacharya, part­ner, in­fra­struc­ture and gov­ern­ment ser­vices, KPMG in In­dia, says the two biggest chal­lenges for at­tain­ing the ar­tic­u­lated goals are fi­nanc­ing and ca­pac­ity. The au­da­cious goals be­ing set up would re­quire cap­i­tal that would be in mul­ti­ples of the to­tal cur­rent size of the In­dian econ­omy. It would be a chal­lenge to garner this cap­i­tal, and a big­ger chal­lenge to nav­i­gate that cap­i­tal in an ef­fi­cient man­ner into the In­dian econ­omy.

That brings the sec­ond set of chal­lenges, that is the ca­pac­ity to ab­sorb this cap­i­tal and to cre­ate the cities and ef­fect the re­ju­ve­na­tion that is planned. The ca­pac­ity in­cludes ca­pac­ity of the fi­nan­cial sys­tems, the in­dus­tries, the con­struc­tion ca­pac­ity, the pro­ject man­age­ment ca­pac­ity, the sup­ply chain ca­pac­ity etc, he says.

How­ever, this goal would open up a plethora of op­por­tu­ni­ties rang­ing from the op­por­tu­nity to be able to de­liver the cities to the abil­ity to in­no­vate and to ex­port the ca­pa­bil­i­ties to other economies. The cities goals would lead to a very ex­cit­ing set of op­por­tu­ni­ties for the in­dus­try, academia and start-ups, he adds.

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