Appearing at http://www.financialexpress.com/article/fe-columnist/building-100-smart-cities-smart-execution-holds-the-key/71890/
The cabinet approval for central
funding of USD 16 billion for the 100 Smart Cities and the 500 Rejuvenated
Cities will change the way we live and work, the way we do business and the way
we are perceived by the rest of the world. More importantly, it will give an
explosive push to the growth of the economy, in a scale that will dwarf the
growth provided by the Golden Quadrilateral project.
To get an idea of the magnitude
of the impact, it is important to understand the complete initiative would
probably cost over USD 5 trillion in today’s costs, and will be spread over
atleast twenty years if not more. So what would USD 16 billion provide against
the overall requirement of USD 5 trillion ? This initial funding of USD 16
billion is like a seed money to bootstrap the process of urban rejuvenation and
building of 100 Smart cities. As each city gets built up and as cities get
rejuvenated, it has a amplifying effect on the economy as the economy starts to
become more and more efficient, allowing faster growth which in turn would
allow larger investments into cities. Hence, the initial USD 16 billion and
whatever else the central government earmarks for this initiative in subsequent
years, will play the role of catalyzing private sector to step in invest in a
series of initiatives in cities, which would fall under the category of
Public-Private Partnershup.
However, why is this interesting
from a living perspective ? These cities will transform the way we live, work
and also think. Since the cities will be smart, they would consume less energy,
be cleaner, have cleaner air, be more safe and secure and be resilient to
disasters – natural and manmade. What this means is that the cities will draw
its energy from in situ sources such as solar. Water will be mostly
recirculated with near zero wastage. Sewage will be mostly treated locally.
Transportation will be far better managed through technology and will have near
zero pollution. With clean air, clean water and an minimally polluted
environment, health and quality of life will improve very significantly, making
Indian cities as the most preferred cities in the world to live in.
This is only a very small snapshot
of what smart cities will do in the short run. What it will do to us in the
long run is change the way we think. It would push us to be more innovative,
making us think in a manner that we have not been able to do so earlier due to
the cacophony of systems and processes that run our cities as of now. The
standardization of city systems would lead to exponential increase in adoption
of innovations within the city system which in turn would lead to creation of
new kinds of industries which hitherto do not exist. And just as in most
leading economies, innovation will contribute to a lion’s share of the GDP.
Beyond the impact that the
cabinet decision will have on India and Indian economy, it is important to note
that it would also have a very significant impact on the global economy. The
expected total of USD 5 trillion spend is equal to about 7% of the total
current global economy. As India starts spending on the cities, it would start
consuming goods and services from the global market, this providing the
desperately needed global growth engine. Thus, this cabinet decision will have
a much far reaching impact than just contributing to India’s growth.
This initiative, when juxtaposed
with the initiative of Housing for All by 2022 and the Make in India program,
will have highly amplified impact on India, Indian industry and Indians per se.
The Housing for All will hopefully provide the framework and funds that will
lead to most families in India having their own homes. And many of these homes
will not be ordinary home but will be smart homes that will be able to talk and
interact with the larger city, unleashing new high technology industries in
India and making it Easier to Live in India.
However, the execution of the
Smart Cities and City Rejuvenation plans also need to be appropriate to get a
greater return on investments than what previous attempts had brought in. As of
now, the Government is planning to have a “City Competition” wherein cities
will hire consultants to present what their plans are and why they should be
selected in the first lot of 16 cities to be shortlisted for being funded by
the Government. If that is actually the case, then cities with more capacity,
which needless to say are mostly in the south and the west, would end up having
the bulk of the funding for becoming a Smart City. However, this would deprive
the ordinary citizens of an equitable opportunity to have their city upgraded.
Also, it would not allow equitable distribution of the funds to cities across
the country.
If on the other hand, the
government will actually use their discretion and equitably distribute the
funding across the country, based on considerations of population and other
social-economic criteria, then perhaps the mechanism of “City Competition” is a
misnomer and should probably be called a “City Readiness & Planning”
exercise.
“City Competition” is usually
used in a developed country wherein the cities are all inherently highly
developed and livable and the “City Competition” is brought in to discover even
potential best practices that would make the cities even better. However, in
India, the cities do not have the basic level of facilities that are expected
from a city from a globally competitive economy.
We are at the threshold of an
exciting new India. It is important that the execution is flawless. The
mechanism of using “City Competition” as a basis for providing the funding to
the cities, needs to be executed in a manner that is non-discriminatory to
those cities who are already laggards and have much lesser capability to scale
up to be able to be considered under the City Competition mechanism. It is
important for India and the global economy that this initiative is a resounding
success.
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