There is a talk about ‘Viksit Bharat 2047’. Rapid urbanisation is being witnessed and it will only increase as we move towards ‘viksit’ status. The developed world created its infrastructure when there were little constraints on sustainability. But, today’s world has severe constraints in terms of sustainability. Developing India has to rely a lot on ‘smart cities’.
In 2012, as part of JNNURM Phase II, the then government announced the creating of two smart cities in every state. By 2015, the ambition increased to creating 100 smart cities in the country. More specifically, it spoke of “100 new cities enabled with the latest in technology and infrastructure adhering to concepts like sustainability, walk to work etc and focused on specialised domains”. A decade later in 2024 none of the political parties mentioned about it. Instead, the talk is about ‘encouragement’ to creation of satellite townships near metro cities across the country and promoting mixed-use & transit-oriented development.
‘Smart cities’ concept has been close to heart to both the UPA as well as the NDA. Unfortunately, the enthusiasm seems to be tapering. During the general election 2024, the campaigning from either of them was devoid of ‘smart cities’. The focus has shifted to freebies which is detrimental to the interest of investors. Concerns of urbanisation remained limited to its sub-components like empowering local bodies, promoting green energy and enhancing rural-urban connectivity besides creating ‘green jobs’. This is paradoxical as it also means the absence of policy debate and meaningful alternatives on one of the most crucial and under-addressed sectors in India’s economy.
Cities are proven engines of economic growth across the world. Indian urban system consists of 7933 large, medium and small cities with a population of 461 million as of 2018. The annual growth in urban population in India between 2010 and 2015 was 1.1%. It has more than doubled now at 2.3 per cent. This percentage may look small but in absolute terms, it is highest among the major economies and the country is projected to add 404 million people to its urban population by 2050. To this, if we add 180 million rural population living next to 70 largest urban centres, we are faced with an unprecedented challenge. India requires to build 70-80 per cent of the infrastructure it needs in 2050 which requires an investment of $827 billion. Some sources mentioned even higher growth rates in which case the task gets increasingly difficult. Managing this unbridled urbanisation in the coming decades is quintessential to realize India’s latent economic potential. It was precisely this challenge that SCM was supposed to address along with other related urban schemes like Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Pradhan Mantri Awas Yojana (PMAY).
As of May 10, 2024, SCM’s dashboard exhibits the total outlay from the expected ₹2 lakh crore to ₹1,67,781 crore, which is approximately 16% less than the projected capital flow in 100 cities. The dashboard also states that the SCM grant funded 5,545 projects worth ₹65,233 crore that have been completed, while 912 projects worth ₹20,876 crore are still ongoing. Interestingly, the funding pattern shows that not more than 5% has come through the PPP route. This is ironic as SCM guidelines clearly laid out that Government – Union & State, would provide the initial (seed) amount that will serve as a catalyst for private investment and hence lay down a robust Public Private Partnership (PPP) model in the Indian urban scenario for times to come.
Perception management is an undercutting theme for any form of government. This has assumed critical importance in contemporary times of global political turbulence. US, UK or India, the scenario looks similar. Indians witnessed an unprecedented and expensive battle of perceptions over the last decade. Multiple discourses and themes have been thrown up for public consumption and debate, but few have attracted as much public attention and scepticism as the Indian urbanization. Ambitious as it may have sounded, SCM successfully brought out the importance of inclusive, planned and tech-oriented urbanization. With the scheme not meeting the perception of its constituents, major political parties have tweaked their electoral promises.
It is time for policy framers to be pragmatic in undertaking urban reforms and introduce enduring changes. And India won’t be the only nation to revisit. Going by the recent news reports, Neom - a flagship urban project of Saudi Crown Prince Bin Sultan has been considerably scaled down and investment is being sought from the Chinese. Whatever may be the reasons of dwindling interest all political parties need to learn from the challenges encountered in the success of SCM rather than be weighed down by them. Political one-upmanship needs to be shunned in favour of cooperative federalism; short-term technological solutions need to give way to prospective urban planning; Implementation of the 74th CAA needs to be done by deputing commissioners rather than dedicated CEOs for SPVs. It must be borne in mind that the Government across three tiers has done a commendable job as the entire civil society leadership claiming to be champions of urbanisation was found largely wanting.
Global experience shows that economic sustainability is the key to ‘smart’ urbanization. As budgetary funding to the scheme has long died down, urban dwellers need to be educated about the importance of paying for utilities. They need to be conveyed that urban water, electricity and waste management services are just like services like tolls and tickets that have to be paid for to survive in the long run. Electoral freebies discourage the participation of the domestic private sector, leave alone foreign ones. For instance, free metro rides or bus rides for any segment of the population will certainly result in increased traffic and decreased in revenue thus eroding investor interest in any such projects. Having smart cities would require smarter interventions.
[Dr. V. P. Singh, Director - PGDM and Professor - Managerial Economics & Statistics, Great Lakes Institute of Management, Gurgaon and Dr. Manvendra Deswal is currently the Deputy Director General of Electric Power, Transmission Association (EPTA)]
