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It pays to be smart

But will there be takers once states realise a Smart City isn’t a ticket to Central funds?

Written by Bibek Debroy |
Updated: March 27, 2015 12:12:31 am
smart city, city smart scheme, delhi smart city, smart town, urban development, Bibek Debroy column, ie column, indian express colum But will there be takers once states realise a Smart City isn’t a ticket to Central funds?

When smart cities are mentioned, eyebrows are often raised. What’s this idea and what is “smart” about a city? What is the scheme? That’s a bit odd because the concept note on smart cities has been on the ministry of urban development’s website since December 2014.

India’s urban population is low and the process of urbanisation has been slow compared with not just developed countries but also several developing ones. In Census 2011, the “urban” share of the population was 31.16 per cent, up from 27.81 per cent in 2001. There is a reason that I put “urban” in quotes. There is a census definition of “urban” and it may not always conform with our general ideas of what “urban” means. This isn’t a problem that is peculiar to India. Specifically, a habitation is urban if it possesses a municipality, a corporation, a cantonment board or a notified town area committee. These are statutorily defined towns. However, a habitation is also urban if it has a population that is more than 5,000, at least 75 per cent of male workers are engaged in non-agricultural pursuits and the population density is at least 400 per square kilometre. These are census towns. In the case of statutory towns, one knows who is responsible for urban governance and the delivery of services. In the case of census towns, you don’t know. They have crossed the threshold of villages/ panchayats but haven’t yet obtained statutory status, typically because of time lags. That’s no man’s land.

The chaotic development one witnesses around towns/ cities is often because of this no man’s land phenomenon. Compared to earlier decades, India’s urbanisation has increased, as indeed it should. Urbanisation is correlated with economic development. There are positive externalities through network effects, even in labour markets. That’s the reason people migrate to urban areas. But India’s pattern of urbanisation between 2001 and 2011, desirable though it is, needs flagging. The number of towns increased from 5,161 to 7,935. But the number of statutory towns only grew from 3,799 to 4,041, an increase of 242. In contrast, the number of census towns grew from 1,362 to 3,894, an increase of 2,532. Hence, the governance issue. Initially, in 2014, there was an idea of developing 100 smart cities. To that has now been added an Urban Renewal Mission in 500 habitations. Both spliced with the former Jawaharlal Nehru National Urban Renewal Mission. But what’s the definition of “smart”? This quote is lifted straight from the concept note: “This would mean that it will have to provide… good quality but affordable housing, cost-efficient physical, social and institutional infrastructure, such as adequate and quality water supply, sanitation, 24X7 electric supply, clean air, quality education, cost-efficient healthcare, dependable security, entertainment, sports, robust and high-speed interconnectivity, fast and efficient urban mobility.”

While that’s a long list, the key is clearly physical infrastructure, especially public transport and transport-related infrastructure. Add to that utilities like electricity, water supply, sanitation, solid waste management and drainage. If these materialise, the rest will probably inevitably follow. Which are these 100 smart cities? I think the concept note is clear enough. One satellite city from each of the cities with a population of four million or more (a total of nine); most cities with a population ranging between one and four million (35 out of 44); all state/ Union territory capitals with a population that is less than one million (17); cities of tourist, religious and other importance (10); and cities with a population of between 0.2 and one million (25). More accurately, this isn’t a list of whether a specific city qualifies for that category of 100 cities. It’s more an indication of what kind of coverage that basket is likely to have. I think the implicit intention was not to duplicate cities covered under the JNNURM. By the way, as with the JNNURM, several conditions have to be satisfied before a city can be included in the 100 smart cities or 500 habitations. Even under the JNNURM, barring Gujarat, Telangana, Andhra Pradesh, Maharashtra, Madhya Pradesh, Odisha and Uttar Pradesh, compliance with the conditions was rather tardy.

Once the states realise that the smart city isn’t a kitty that promises Union government funds, I am not sure how many takers there will be.

Central government support is through viability gap funding, primarily for physical infrastructure and e-governance. The rest will come from private investment and public-private partnerships, with only a little support for initial investments. Not all of the 100 smart cities or 500 habitations will be greenfield projects, though greenfield planning is always easier. Along that greenfield path and along the Delhi Mumbai Industrial Corridor, we will soon (probably by 2019) have smart cities in Dholera, Shendra-Bidkin, Greater Noida, Ujjain and Gurgaon. However, the 100 smart cities and 500 habitations will include some brownfield projects: converting an entire existing city into a smart city (probably unlikely and difficult) and carving out a greenfield smart section from an existing city (probably more likely). I suspect the greenfield/ brownfield catch is elsewhere. Under Article 243Q of the Constitution, there must be a municipal council for a smaller urban area, unless the governor provides an exemption through public notification. That was the clause used for those new greenfield cities to have governance structures independent of the elected one, probably the reason that those cities took off. It will be a welcome change if the states decentralise sufficiently to urban local bodies (ULBs), and ULBs possess sufficient farsightedness to push for smartness, even if only in a few enclaves of existing cities. Therefore, rather perversely, census towns are a strength, not a weakness.

That’s where the satellite-mode of smartness might indeed take off. Since they don’t possess elected representatives yet, there are no vested interests. Like Dholera and the other four, one only needs to figure out vehicles (special purpose vehicles or otherwise) for undertaking reform. We will soon know how interested the states are.

The writer is member, Niti Aayog. Views are personal

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