Financing still a grey area in smart cities scheme
Allocation of 100 crore for each smart city on the lower side
While the smart city projects seek to enhance quality of life for a large cross-section of urban India in 100 selected cities with 24-hour water and power supply, world-class transportation systems and top-grade education and recreational facilities, all set to the backdrop of high- level e- governance and environmental sustainability, financing them is still a grey area that needs to be plugged, say real estate experts.
The smart city project will be based on PPP model, says Shubhranshu Pani, managing director - infrastructure services, JLL India, adding further clarity is needed as financing was still a grey area, and the policy-level changes required for the banking and finance industries needed to be amplified.
With regards to the Housing For All scheme, the clear objective is to bring the cost of homes within the reach of the common man. Multi-fold channels need to be deployed. Public sector funding will play a major role in this initiative, since only about 20-25% of the funding towards the scheme will be by the government. Land acquisition will also be a major hurdle to overcome, but the private sector can play a major role in this as well, he says.
The AMRUT scheme seeks to ensure basic infrastructure for 500 cities with a population of above one lakh.
“The government’s proposal to provide an interest subsidy and assistance to enforce Housing for All scheme would go a long way in addressing the issue of affordability in India,” says Sanjay Dutt, executive managing director, Cushman & Wakefield, South Asia.
Where finances go, though the government’s allocated budget of ₹ 100 crore for each smart city might be on the lower side, investment from technology and real estate companies can steer growth. Although AMRUT will be implemented in only 500 cities and towns, each with a population of 100,000 and above, it is an appropriate step in resurrecting Indian cities that are seeing faltering infrastructure. Going ahead, a major part of the task lies in the government’s ability to acquire land - a process that is fraught with many issues in India. Moreover, the government needs to look for innovative ways to finance these schemes, while involving all stakeholders to implement them in timely manner, Dutt adds.