Combating the challenges of urbanization in emerging markets:

Lessons from India India’s smart-city program offers a road map for cities working to prepare for
mass urbanization with limited funds.

In the next 15 years, about 200 million people will move from rural areas in India to the country’s
urban centers. The shift will be massive, almost equal to the current populations of France,
Germany, and the United Kingdom combined. While urbanization increases productivity and
improves GDP per capita over the long term—by 2030, urban centers in India will generate nearly 70
percent of the country’s GDP1 —it also causes significant pressure in those urban centers. How can
these cities plan to accommodate the growing population in terms of living space, jobs, and
transport? Government data estimates that India’s cities would need $1.2 trillion in capital funding
over the next 20 years to keep up with the demands of their growing populations. But the country
has nowhere near that amount to spend: India requires around $134 per capita to support
urbanization capital expenditure (capex), but it actually spends around $20 per capita.2 This
discrepancy has caused several problems: only 30 percent of sewage is treated, 24 percent of the
urban population lives in slums, public transit usage is declining, and almost half of all city drivers
spend more than 12 hours a week stuck in their car.3 And India is not alone in these struggles. Cities
in many emerging markets are also facing similar strain as people flock to work and live in urban
centers. At first, it may seem counterintuitive to suggest that these cities, struggling to keep up with
even their citizens’ most basic needs, should begin building themselves into smart cities. This is
where it becomes important to broaden the definition of smart cities and not restrict it to
implementation of just technology solutions. The right effort to make a city smart will incorporate a
focus on sustainability, resource productivity, economic development, and job creation, as well as
getting basic core infrastructure right to enable decent quality of living.

Several lessons for emerging markets around the world are to be found in India’s Smart Cities
Mission, the government’s high-profile program to help its urban centers combat the challenges of
urbanization. The program aims to assist several Indian cities in kickstarting urban renewal. While
the program’s capex expenditure will fall short of the $1.2 trillion required to keep pace with
urbanization, it’s an important start and offers several best practices for city leaders in emerging
countries.

Engage citizens early and often

With limited funds, it is critical that cities use their money to solve the challenges that citizens are
most concerned about. Thus, efforts must begin with a comprehensive citizen engagement initiative.
Under India’s program, every city identified one or two core pan-city issues that it would like to
solve. Different cities across India chose mobility, governance, water, energy, security, and solid
waste management as their top themes. For example, while Pune selected mobility and water as the
main pan-city themes, Bhubaneshwar selected intelligent city operations. Most cities that came out
on top of the competition engaged extensively with residents to identify their core concerns. By
asking citizens for their input from the very beginning, the program ensures citizen support later in
the process—though this support also depends on maintaining two-way communication with
citizens. City authorities must share updates on a regular basis while seeking input on progress, the
quality of execution, and new ideas.

Use competition to improve quality of planning and to encourage innovative funding sources
The Smart Cities Mission granted funding to cities based on project proposals submitted by each city.
The competition between cities resulted in high-quality submissions that identified specific
objectives and resources and were aligned with citizens’ expressed priorities. While every city was
given seed capital from the government, they were encouraged to come up with innovative sources
of funding to bridge the gap between this seed capital and the money needed to fulfill their plans.
These source ideas included land monetization, public-private partnerships, and other sources of
revenue like developmental charges.

Think beyond technology

While technology is a primary driver of India’s smart-city development efforts, the government also
encourages cities to think about development more holistically. Each city came up with a plan to
develop a relatively small area (approximately 1,000 acres) and improve its living standards by
addressing core infrastructure challenges such as water access, solid waste management, and open
space. For example, Kochi devised a plan to retrofit seven square kilometers of land, linked
throughout by waterways. This plan included the creation of seamless multimodal transportation,
the renovation and renewal of open spaces, and the inclusion of essential public services such as
sanitation, water, and waste management. This approach had a threefold effect: citizens and city
authorities imagined, for the first time, how a relatively small area could be developed and
revitalized to achieve higher standards of livability; funding sources were more accessible for
planning these pockets of land, given their smaller size; and citizens were more compelled to pay for
these developments via betterment levies once they witnessed the real benefits of these
neighborhoods.

Move rapidly on quick-win projects while keeping an eye on core issues

Identifying and rapidly executing quick-win projects is critical to building momentum and winning
citizens’ confidence. In India, leading cities identified and implemented a set of quick-win projects
such as rejuvenating urban spaces, redesigning streets, and deploying technologies including smart
parking or integrated city applications. These projects demonstrated short-term results and
increased stakeholder buy-in. At the same time, these cities also prioritized larger, long-term
strategic projects, such as ensuring 24/7 water supply, and began making progress on them with the
knowledge that such projects would take longer to implement.

One example of this quick-win strategy played out in Pune. Leaders set out on a quick-win
placemaking mission—that is, creating public spaces that capitalize on existing assets to promote
health, happiness, and well-being—to rejuvenate urban centers. The city redesigned streets to
improve safety and walkability and brought multiple use cases to citizens through a smart element
project that created and wove together six key components: 1. Wi-Fi hotspots across strategic
locations such as parks, hospitals, and other public spaces; 2. Environmental sensors to monitor
critical parameters such as air quality and noise pollution; 3. Public announcement systems to
broadcast both general and emergency messages to improve communication and public awareness;
4. An emergency response system to increase citizen safety; 5. A variable message system that
deployed electronic display boards, placed across the city, to broadcast messages, alerts, and city
updates; and 6. A scalable command and control center, which assimilated data from all of these
elements to monitor and manage smart-city operations from a single hub. Meanwhile, it kept an eye
on the core issue of focusing on long-term mobility by working to enhance bus infrastructure and
kick-start its metro project.
Think holistically about funding

Many cities came up with innovative ideas to fund the smart-city plan. For example, Bhubaneshwar
established seven public-private partnership projects to raise US $42 million (INR 2,725 cr), which
covered almost half of its total smart-city plan cost of US $70 million (INR 4,537 cr). The Smart Cities
Mission also encouraged cities to think beyond capex to operation and maintenance, both in terms
of funding and the operating model. For example, Pune used revenue from the operation of
electrical buses to fund the operation and maintenance gaps as their bus fleet expanded.

Ensure vendor participation through a partnership approach

Many smart-city projects are relatively small, which does not attract large investors. And in India,
some of these projects are being executed for the first time, which means the city must significantly
rework the solution to apply locally. For example, implementing a sophisticated traffic management
system in India or another emerging market is vastly different from doing so in a developed
economy, as emerging markets tend to have a different transportation mix—for example, a large
number of two-wheeled scooters and motorcycles. In such a situation, it is important to have a
partnership mind-set to tailor and cocreate the solutions with vendors, so that these solutions are
truly effective in the emerging-market context.

Combating the challenges of urbanization in emerging markets: Lessons from India Voices
December 2017 number of two-wheeled scooters and motorcycles. In such a situation, it is
important to have a partnership mind-set to tailor and cocreate the solutions with vendors, so that
these solutions are truly effective in the emerging-market context.

Citizens are not looking for one-off projects; they are looking for solutions that will fundamentally
affect their lives. Following the above tactics in implementing a smart-city program can help leaders
in emerging markets develop and achieve these solutions. And ensuring everyone across the value
chain, especially city authorities, is aligned and focused on the solution is perhaps the single most
important point that will make a smart-city mission successful.

1 “India’s urban awakening: Building inclusive cities, sustaining economic growth,” McKinsey Global
Institute, McKinsey.com.

2 Ibid.

3 Jaspal Singh, “City public transportation developments in India,” Intelligent Transport, December
14, 2016, intelligenttransport. com; Amit Jain, “India loses billions of rupees to traffic jams. Is ride-
sharing the solution?,” World Economic Forum, October 6, 2016, weforum.org.

Insight - Smart Infrastructure: the way of the future for India

(https://www.austrade.gov.au/news/insights/insight-smart-infrastructure-the-way-of-the-future-
for-india)
Urban India is growing at an unprecedented rate: some 590 million people – or 40 per cent of the
country’s population – are expected to be living in cities in India by 2030. With this growth comes
huge challenges but also huge opportunities, not only for India but also for Australian firms.

The Indian Government is addressing the problems of rapid city population and the subsequent
strained infrastructure with a variety of urban regeneration programs, which seek to transform India
by uplifting services such as last mile transport connectivity, evenly distributed energy, and digital
citizen engagement in ‘Tier 2 cities’ across the country.

Major economic drivers for India’s urban regeneration initiatives include a rejuvenation of central
business districts and markets, revival of specific industries, and the establishing of business
development centres.

One such initiative is Prime Minister Modi’s ‘100 Smart Cities Mission’ – a program to develop over a
hundred cities across the country focused on urban renewal and retrofitting to drive economic
growth and improve the quality of life. Areas of primary focus include energy, environment,
governance, healthcare, sanitation, and transport.

In 2015, the government launched ‘India’s 100 Smart Cities Challenge’, where cities across the
country competed to participate in the nationally funded program. The challenge generated a strong
response from state governments, city administrators, and ordinary citizens across the country.
Discussion formats – including workshops, webinars, and social media – focused on areas that
needed to be improved to make their cities more livable, and what needed to be changed to make
their cities more sustainable.

Funding for India’s Smart Cities program

The Indian Ministry of Urban Development, responsible for implementing Modi’s Smart Cities
Mission in collaboration with state governments of the respective cities, estimates the cost of this
initiative at US$40 billion.

Funding for the program comes from a number of different sources, including central funding, Public
Private Partnerships (PPPs) investments, bonds and loans, the cities’ own contributions, and from
convergence with other national and state schemes. Funding models for each city differ depending
on the constitution of their ‘Special Purpose Vehicle’.

Proposals already in from cities taking part in the program range from open transit infrastructure
and building construction, which includes slum redevelopment and affordable housing, to space
management, flood management, and lake and river precinct development.

Energy needs and energy efficiency are being addressed through smart grids to improve the security
and efficiency of India’s electricity system, smart electricity meters, solar panels on buildings and
LED street lights.

Tapping into international expertise

The Confederation of Indian Industry (CII), a non-government, non-profit, industry led and managed
organisation, works to bring together Government, industry and private players to help in the
development of the country, including the Smart Cities Mission.

To tap into international expertise, CII has been instrumental in putting together consortiums and
signing Memorandums of Understanding (MOUs) with groups from countries around the world.
These include a German consortium led by Siemens, a Japanese consortium led by Hitachi, a US
consortium led by Cisco, and an Australian consortium led by Queensland’s University of Technology
(which was facilitated in market by Austrade).

Dr Manvendra Deswal, Head of Smart Cities for CII, explains that the consortiums, under their lead
firms, have a mandate to bring together other technology, infrastructure, and engineering partners
to develop Smart Cities projects.

‘How this works in practice is that the consortiums can approach a city and offer their expertise,’ Dr
Deswal says. ‘In this way, the consortium partners can showcase their best practices in various fields
related to Smart City development, and provide an entire city landscape rather than piecemeal
solutions.’

Multi-city proposals for Smart City development

Large organisations with the resources to deliver a wide variety skilled services have also been
nominated for Modi’s 100 Smart City developments at a multi-city level.

Engineers India Ltd. (EIL) – the largest engineering company in South Asia with over 3,000 engineers
and architects in its practice – has been nominated by the Ministry of Urban Development to work
on three specific Smart Cities: Moradabad, Rampur and Rae Bareli, all in the state of Uttar Pradesh.

‘Smart Cities in India are in the nascent stage,’ says Snigdho Majumdar, who heads the Corporate
Strategy and Business Development division within EIL. The inclusion of local citizens in developing
solutions is of prime importance, he says. ‘EIL conducted an extensive site study, collected data from
various urban bodies to perform preliminary site analysis, and ran a series of workshops and
competitions within the community to encourage the participation of local residents.’

There are many parameters which have to be taken into account, Mr Majumdar says. ‘It is necessary
to understand the ‘fabric’ of a place, and the social needs of the different stratas of society.’

He explains that a city’s character can be restored through regeneration and partial new
development, ‘but there also has to be a focus on resilient infrastructure so that you can mitigate
the risks from disasters, and developments should never just take place in a particular area, or
‘pocket’. Nor should they focus on the more privileged areas of a city.’

Mr Majumdar adds that collaborating with Australian companies to create unique benchmark
projects can take urban infrastructure in India to the next level and envisages a surge in
infrastructure projects around India over the next five to seven years.

Opportunities for Australian organisations

There are many opportunities for Australian organisations to participate in Modi’s ‘100 Smart Cities’
initiative and to provide solutions and services for the multitude of other infrastructure projects now
underway across India.

Australian companies can showcase their expertise across many areas, including master planning
and design in sustainable urban planning, precinct and building planning, and waterfront
development; water and waste management; financing; building technology; and training.
A major electrification plan currently underway across the country also creates huge opportunities
for organisations in Australia’s energy sector which can supply smart grids, and renewable energy
technology.

Market entry strategies for Australian companies

Australian companies can employ a number of market entry strategies into the Indian market
generally, including the suite of India’s urban regeneration programs and Modi’s ‘100 Smart Cities
Mission’.

Grayson Perry, Australia’s Trade Commissioner in Chennai, says that the best approach is often
through a local partner.

‘The local partner can be a distributor, an agent, or an Indian company that has similar expertise or
complementary skill sets,’ he notes. ‘A low risk entry model is to partner with an Indian company in a
JV or consortium where the Australian company only shares the pre-qualifications required to
qualify for tenders and the Indian company pays all tendering costs, including the bid bond
guarantees.’

There can be a reputational risk with this model, he adds, although this can be mitigated by
partnering with established players in the market.

Dr Perry says that a somewhat higher risk strategy, but the model preferred by those looking for
long term engagement, is to partner with an Indian company in a JV or consortium and bid for the
project jointly, sharing the financial costs associated with the bidding process and getting involved in
the project’s execution.

‘Whichever way an Australian organisation chooses,’ he says, ‘there is a lot of business out there in
and around India’s Smart Cities initiative.

‘We are just at the beginning of something big.’

https://www.pwc.in/assets/pdfs/publications/2017/how-smart-are-our-cities.pdf

BACKGROUND:

Smart Cities Mission, sometimes referred to as Smart City Mission, is an ambitious multiyear
effort by the Government of India to boost economic development, technological innovation, and
sustainable growth across 100 cities making them citizen friendly and sustainable. When
successful, Indian cities will position themselves as clean, modern, and competitive places for
years to come. Smart Cities Mission envisions developing an area within 100 cities in the country
as model areas based on an area development plan, which is expected to have a rub-off effect
on other parts of the city, and nearby cities and towns. As of June 2018, 100 Cities have been
selected based on the Smart Cities challenge, where cities competed in a countrywide
competition to obtain the benefits from this mission.
Launched on June 25th 2015- It is a five-year program, where all of the Indian states and Union
territories are participating (except West Bengal) by nominating at least one city for the Smart
Cities challenge. Financial aid will be given by the central and state governments between 2017-
2022 to the cities, and the mission will start showing results from 2022 onwards.
Each city will create a Special Purpose Vehicle (SPV), headed by a full-time CEO, to implement
the Smart Cities Mission. The execution of projects may be done through joint ventures,
subsidiaries, public-private partnership (PPP), turnkey contracts, etc. suitably dovetailed with
revenue streams. The Centre and state government will provide INR 1,000 Crore funding to the
company, as equal contribution of INR 500 crore each. The company has to raise additional
funds from the financial market as a debt or equity.

In January 2016, the government announced the first batch of 20 cities. Of these, 17 have
formed special purpose vehicles to implement projects. These cities were the first to receive
funding from the ministry, with the release of Rs 30 billion in grants. This seed capital will act as a
catalyst for the private sector to step in and invest in public-private partnership (PPP) projects
planned by these cities. In addition, 13 cities were selected in May 2016 in the fast-track
competition to give wider coverage and representation to states. These cities improved their
smart city plans by identifying infrastructural gaps and alternative sources for resource
mobilisation.

In the second round of the smart city competition held in September 2016, the government
announced a list of 27 more cities to be developed under the mission. Amritsar topped the list,
while Vadodara secured the last rank. State-wise, Maharashtra with five cities, and Tamil Nadu
and Karnataka with four cities each were among the frontrunners. With this, a total of 60 cities
have been selected under the mission and a total investment of Rs 1.45 trillion has been
proposed by them.

The remaining cities participated in Round 3 with their upgraded smart city proposals. Round 3
spanned from January 1 to March 31, 2017. With regard to the development of projects, 87
projects involving an investment of more than Rs 58 billion are under execution in 19 cities. Of
these, seven projects have already been completed. Another 80 projects with an investment of
Rs 44.48 billion will be awarded in the next six to seven months.
The smart cities mission has been dubbed as “the beginning of India’s
urban renaissance.”

With an estimated 1 million people moving from India’s rural and semirural
areas to cities every month, the challenge will be to make sure that
"renaissance" happens rapidly enough. Although the mission is trying to
address these issues to a certain extent, the challenges of remodelling
India's tier-I cities into smart cities are considerable, as
many of them have reached their saturation point.

Only two per cent of the Rs 9,943 crore released under the smart
city mission have been utilised, and only five per cent of the
proposed projects are completed. "This does raise questions about
whether the development of smart cities by 2020 is a realistic
expectation,"

while many of the bigger cities have managed to enlist themselves

under the smart city scheme, it is, in fact, the smaller contenders
who have managed to show visible progress.

The recent smart city rankings by the ministry of urban development

the tier-II smart cities of Nagpur, Vadodara and Ahmedabad topped
the charts, leaving behind tier 1 cities such as Pune, Chennai and
many others.

"Smaller cities have more to gain from the smart cities program,
and a strong, determined local government can push the necessary
reforms much more expediently there, than in the metros. Of
course, the larger cities are invariably already massively congested,
thereby presenting huge roadblocks to the deployment of the
requisite smart city ingredients,"

Strategy

The idea is to look at compact areas, create a replicable model which will act
like a light house to other aspiring cities. The Smart Cities Mission is meant
to set examples that can be replicated both within and outside the Smart
City, catalyzing the creation of similar Smart Cities in various regions and
parts of the country.

The strategic components of area-based development in the Smart Cities

Mission are city improvement (retrofitting), city renewal (redevelopment)
and city extension (greenfield development) plus a Pan-city initiative in which
Smart Solutions are applied covering larger parts of the city
Area-based development will transform existing areas (retrofit and
redevelop), including slums, into better planned ones, thereby improving
livability of the whole City. New areas (Greenfield) will be developed around
cities in order to accommodate the expanding population in urban areas.

Application of Smart Solutions will enable cities to use technology,

information and data to improve infrastructure and services. Comprehensive
development in this way will improve quality of life, create employment and
enhance incomes for all, especially the poor and the disadvantaged, leading
to inclusive Cities.

The smart city aspirants have been selected through a process of competition
called ‘City Challenge Competition’ in an objective manner as hailed by NITI
Aayog. It entails effective citizen participation ending the ‘top down’
approach and leading to ‘people centric’ urban development.

Smart Cities holds strong complementarity with the AMRUT scheme in

achieving urban transformation. While AMRUT follows a project-based
approach, the Smart Cities Mission follows an area-based strategy. Recent
reports suggest that out of the 97 smart cities declared, 89 have initiated
this process of which 70 have completed it and 26 of them have already been
given credit rating.

Eight cities such as Ahmedabad, Bhopal, Indore, Jaipur, Kakinada, Pune,

Rajkot and Visakhapatnam have already appointed Transactional Advisors for
issuing municipal bonds. Total of 44 cities including 25 AMRUT cities have so
far got credit ratings.

The flipside

Cities in India are governed by multiple organizations and authorities which

have their own jurisdictions; thus Indian cities are characterized by multiple
boundaries. The governing authorities in a city include urban local bodies
(ULB) with the primary functions of service delivery, planning for socio-
economic development and regulation of development. This results in their
subdivision into different wards. Large cities also have development
authorities, urban development authorities or improvement trusts
responsible for planning and development that divide cities into various
planning zones. Line departments, that are sector-specific organisations, deal
with the provision of services in their respective sectors — the water supply
agency has its own supply zones. Sewage disposal is also done based on
various zones. The organizations responsible for safety and security delineate
another set of zones. Therefore, the different spatial entities of the city
formed by non-coterminous boundaries deter effective planning and good
governance.

This calls for local spatial planning. Spatial planning includes regional
planning, transportation and environment as well as promoting economic
growth of a region via models and techniques. This term is mostly used in
context of Regional Planning.

For example: Conventional city planning talks about where a metro rail
project should come up, a spatial plan “will also say what growth impetus the
metro project will provide for the city and how the metro plan will be linked
to land use and boost the economic activity of the city”.

It will be a blueprint for the city in terms of social infrastructure too. Planning
for healthcare and schools, among other things, will be a part of it and once
a project is sanctioned, it will become embedded in it. It will be easy to bring
about any development project.

Way forward

An important first step would be to build safeguards to protect the

democratic nature of governance structures. A robust governance structure,
which allows for sharing of power and financial resources between urban
local bodies and the private sector stakeholders, would go a long way
towards reducing fears.

The VCF policy framework (a principle that states that people benefiting from
public investments in infrastructure should pay for it like land value tax, fee
for changing land use, betterment levy, development charges, transfer of
development rights, and land pooling systems) was introduced by the
Ministry of Urban Development recently. Besides this, tapping of municipal
bonds can meet the financial shortages.

Cues can be taken from successful models like Pune Municipal Body
(Municipal bonds), Karnataka (for its methods to fund its mass transit
projects) and the Mumbai Metropolitan Region Development Authority
(betterment levy) to finance infrastructure projects.

Best international practices and principles of the recently concluded UN

URBAN AGENDA of the Habitat conference can be incorporated to meet SDG
goals.

Similarly, at the planning stage itself, cities must seek convergence in the
SCM with AMRUT, Swachh Bharat Mission (SBM), National Heritage City
Development and Augmentation Yojana (HRIDAY), Digital India, Skill
development, Housing for All, PMAY-Urban for better integration,
coordination and inclusiveness.

Institutional and legal mechanisms for any repercussions with regard to

social justice, equity and cyber safety also must be stitched on to the mission
strategy for it to be truly smart.

A total investment of Rs.2,01,981 crore has been proposed by the 99 cities under their smart city plans. Projects
focusing on revamping an identified area (Area Based Projects) are estimated to cost Rs. 1,63,138 crore. Smart
initiatives across the city (Pan City Initiatives) account for the remaining Rs. 38,841 crore of investments.

• The implementation of the Smart Cities Mission is done by a Special Purpose Vehicle (SPV) to be set up at
city level in the form of a limited company under the Companies Act, 2013 and will be promoted by the
State/UT and the Urban Local Body (ULB) jointly both having 50:50 equity shareholding. After selection, each
selected Smart Cities have to set up SPVs and start implementation of their Smart City Proposal, preparation of
Detailed Project Reports (DPRs), tenders etc.

• The SPV will convert the Smart City Proposal into projects through Project Management Consultants (PMCs)
and implementation thereafter.

The Government of India has launched the Smart Cities Mission on 25 June 2015.

• The objective is to promote sustainable and inclusive cities that provide core infrastructure and give a decent
quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions.

• The focus is on sustainable and inclusive development and the idea is to look at compact areas, create a
replicable model which will act like a lighthouse to other aspiring cities. The Smart Cities Mission is meant to
set examples that can be replicated both within and outside the Smart City, catalysing the creation of similar
Smart Cities in various regions and parts of the country.

• Some of the core infrastructure elements in a Smart City would include adequate water supply, assured
electricity supply, sanitation, including solid waste management, efficient urban mobility and public transport,
affordable housing, especially for the poor, robust IT connectivity and digitalization, good governance,
especially e-Governance and citizen participation, sustainable environment, safety and security of citizens,
particularly women, children and the elderly and health and education.

• The strategic components of the Smart Cities Mission are city improvement (retrofitting), city renewal
(redevelopment) and city extension (Greenfield development) plus a Pan-city initiative in which Smart Solutions
are applied covering larger parts of the city.

• Area-based development will transform existing areas (retrofit and redevelop), including slums, into better
planned human settlements, thereby, improving liveability of the whole cities. Development of well-planned and
fully serviced new areas (greenfield) will be encouraged around cities in order to accommodate the rapidly
expanding population in urban areas. Application of Smart Solutions will enable cities to use technology to
improve infrastructure and services.
• Comprehensive development in this way will improve quality of life, create employment and enhance incomes
for all, especially the poor and the disadvantaged, leading to inclusive cities.

Selection Process

• The selection process of Smart Cities is based on the idea of Competitive and Co-operative Federalism and
follows a Challenge process to select cities in two stages.

• In January 2016, based on the All India Competition, 20 smart cities were selected in Round 1 (Annexure-I).
13 more Smart Cities were selected in May 2016 in fast track round (Annexure-II).

• In Round 2, 63 potential smart cities participated of which, 27 Smart Cities have been selected in September
2016 (Annexure-III).

• In Round 3, 45 potential smart cities participated of which, 30 Smart Cities have been selected in June 2017
(Annexure-IV).

• In Round 4, 15 potential smart cities participated of which, 9 Smart Cities have been selected in January 2018
(Annexure-V).

• A total investment of Rs.2,01,981 crore has been proposed by the 99 cities under their smart city plans.
Projects focusing on revamping an identified area (Area Based Projects) are estimated to cost Rs. 1,63,138
crore. Smart initiatives across the city (Pan City Initiatives) account for the remaining Rs. 38,841 crore of
investments.

• The implementation of the Smart Cities Mission is done by a Special Purpose Vehicle (SPV) to be set up at
city level in the form of a limited company under the Companies Act, 2013 and will be promoted by the
State/UT and the Urban Local Body (ULB) jointly both having 50:50 equity shareholding. After selection, each
selected Smart Cities have to set up SPVs and start implementation of their Smart City Proposal, preparation of
Detailed Project Reports (DPRs), tenders etc.

• The SPV will convert the Smart City Proposal into projects through Project Management Consultants (PMCs)
and implementation thereafter.

Lack of talent
“One of the challenges is the lack of talent and experience. India has limited exposure to such
massive development plans. Creating Smart Cities requires understanding of town-planning, town
development, urban sustainability, infrastructure development, capacity augmentations, etc.

So far, India has not taken up any such project with the exception of building Chandigarh and few
satellite towns. The lack of experience has been a challenge in creating and executing a foolproof
plan,” said Ramesh Nair, CEO and Country Head, JLL India. “Cities have done prioritisation of
projects based upon impact and quick-wins so that there is visible improvement in governance
and service delivery. Therefore, the first set of projects that the cities have taken up are around
traffic management, parking, parks, roads, city cleaning, greening and streetlights. These projects
help cities improve the visual and governance aspect,” said NSN Murty, Partner and Leader
(Smart Cities), PwC India.

Timeline
The projects will continue for five years and the timeline for completion depends on the round in
which they were selected.

Murty added that the next set of schemes is focussed around large infrastructure and public-
private partnership projects, both of which require detailed surveys, feasibility and market
assessments. There might be some delay in the process owing to hiring of project management
consultants and non-availability of right of way/land, but these are being addressed collectively
by the SPV and the municipal authorities, he said.

“Interestingly, we are seeing faster progress on the Smart Cities programme in some of the
smaller cities. This could be because they have more to gain, fewer challenges in terms of
resistance to change, and low levels of urbanisation. But, most importantly, a stronger local
political will,” said Anuj Puri, Chairman, Anarock Property Consultants.

According to industry experts, hiccups are usual for such complex programmes involving land
acquisition and other implementational issues.

However, sounding optimistic, they said it will gather pace in the coming months.

https://www.thehindubusinessline.com/news/smart-cities-mission-
still-to-build-up-pace/article24081914.ece

In India, Pune undertook nine phases of public engagement to get input from more than half
of the city’s population in the design of its smart city agenda.

[ Smartnet, Smart Pune: Creation of a vision community, December 2015,

https://smartnet.niua.org/content/99ac9eaf-513e-4669-82c4-0c8af2b4a5df]

Cities can no longer think of data and smart city tools as costly capital expenditures. They are
increasingly necessary operational investments. Even when fiscal resources are scarce, there
are ways to devise sustainable models for applications to take off, for example by monetising
data, offering development rights, modifying zoning restrictions, or coming up with creative
models that can generate revenue for private-sector providers. One key instrument the public
sector has at its disposal is the “government as a buyer” model, which can support the
development of new technologies. The Indian government extended grants under the FAME
India scheme to support cities procuring electric vehicles for mass transport, a move that
supported both the faster adoption of electric vehicles and multimodal transit solutions.

https://smartnet.niua.org/sites/default/files/resources/Success%20S
tories%20from%20Mission%20Cities%20Lowres.pdf

Meanwhile, from a command and control centre perspective, other cities like Nagpur,
Kakinada, Naya Raipur and Bhopal are in fairly advanced stages of project rollout. The good
news, according to the Ministry of Housing and Urban Affairs, the nodal ministry for the
Smart City Mission, is that all the commandand-control centres planned in the first batch of
20 cities will be functional by the end of the current financial year. Further, if there was a
measure of triumphalism – apart from the time being Independence Day month, August– it
was also on account of the accolades won by Gujarat International Finance-Tec City (GIFT
City) and IFSC at CMO Asia 2017 in Singapore. The Asia Smart City and Best CSR
Practices Awards are Asia’s highest recognition of corporate organisations covering almost
41 countries. It is instructive that India’s first operational Smart City and IFSC won awards in
4 categories namely Best Smart City Initiative, Environmentally Sustainable City, Smart
Infrastructure and Best Use of CSR practices. It is not difficult to see why. GIFT City is
included among the Government of India’s Smart City Mission Statement as a model city in
green-field category for development of 100 smart cities in India. Termed as India’s first
‘Operational Greenfield Smart City,’ GIFT City encompasses world-class infrastructure
facilities many of which are being introduced in India for the first time. These include a city-
wide underground Utility Tunnel, District Cooling System, India’s first Automated Waste
Collection System, City Command and Control Centre and potable drinking water supply
across the city.

Smart buildings India is expected to emerge as the world’s 3rd largest construction market by
2020 by adding 11.5 million homes every year. Under the “Housing for All” programme
there are plans to construct 60 million homes by 2022; it also plans to construct 200 low-cost
airports in Tier-II and Tier-III towns, apart from developing 2,500 of the 6 lakh villages
across the nation. The smart city surge will see growing application of game changing
technologies such as BIM, prefabricated steel structures ad modular housing systems; Smart
materials including high strength and self-compacting concrete; Smart construction in the
form of sophisticated equipment, formwork and scaffolding, Automated Building Solutions,
Electronic Surveillance and other best practices which improve quality and productivity. The
next generation projects planned by the government is expected to see increased use of pre-
engineered steel in construction. With construction timelines being tight steel buildings
solutions will be perceived as an economically smart solution for speedy development. Says
Vikas Kaushal, President Sales & Marketing, Interarch Building Products Pvt Ltd, “The
concept of Smart Cities will open up new avenues for usage of steel in Indian construction
industry. A lot will depend on the architects and management consultants of the cities on how
they utilise the benefit of steel and its definite advantage of quality, speed, accuracy and
efficiencies in their projects.” As per a survey conducted by Honeywell over 2,000 buildings
in India including airports, hotels will have to raise their investment profile in Smart Building
Technologies. Automation technologies to play a key role in the efficient operations of
buildings. The industry estimates the Indian building automation and control systems market
to grow three fold in revenue terms by 2019 with the smart homes featuring devices for smart
monitoring, crossdevice compatibility, voice commands, wireless connectivity and lighting
enabled by motion sensors.

Smart transportation

India is poised to grow exponentially in terms of its demand for smart mobility solutions.
This growth comes against a backdrop of a colossal urban transformation where over 250
million people are likely to migrate to already congested cities in the next 15 years. For India,
apart from increasing existing capacity, the push will have to be towards smarter and efficient
public transport services across the country. With the growing pressure on urban
infrastructure and public spaces like roads and parks, shifting towards smarter, efficient and
affordable public transport network is the need of the hour. Further emergence of metros in
Tier II cities along with expansion across current metro systems will continue to be strong
drivers for business for transportation solutions providers like Alstom. The company has
globally launched an electric bus called APTIS with a unique and innovative design based on
that of a tram with low-floor accessibility and 360° views.

https://smartnet.niua.org/sites/default/files/resources/lead_story_-
_smart_city.pdf

https://smartnet.niua.org/sites/default/files/resources/innovative_civi
c_engagement_and_digital_urban_infrastructure-
_lessons_from_100_smart_cities_mission_in_india.pdf
http://bwsmartcities.businessworld.in/article/Assessment-and-
Estimation-of-the-Smart-Cities-Mission/14-05-2018-149126/

http://smartcities.gov.in/upload/oms/5b3dd04fd4a4dOM%20Smart%
20City%20Award.pdf

https://smartnet.niua.org/weekly-update

https://accommodationtimes.com/smart-city-mission-rs-7000-cr-
projects-completed-rs-52000-cr-projects-under-implementation/

https://syskool.com/smart-cities-mission/

https://www.hindustantimes.com/india-news/govt-released-rs-9-
940-crore-to-states-for-smart-cities-mission/story-
oo0tPV8qrKTQL4iFWs9MqJ.html

https://medium.com/@davidswift125/why-the-smart-cities-mission-
is-a-giant-step-forward-towards-sustainable-urban-development-
fdf19bab1875

https://www.narendramodi.in/pm-modi-attends-3rd-anniversary-
event-of-pmay-u-amrut-smart-cities-mission-540927
https://smartnet.niua.org/sites/default/files/resources/smart_cities_r
eport_2017.pdf

https://www.brighttalk.com/webcast/5562/189111/smart-cities-of-
india-lopsided-development-or-inclusive-growth

https://www.thehindu.com/real-estate/the-smart-cities-of-
india/article19445207.ece

http://smartcity.eletsonline.com/tag/smart-cities-mission/