Fi­nanc­ing still a grey area in smart cities scheme

Al­lo­ca­tion of 100 crore for each smart city on the lower side

HT Estates - - HTESTATES - Van­dana Ram­nani

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.

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