The Prime Minister’s signature ‘smart cities’ project has received a major boost with the Cabinet clearing ₹48,000 crore for 100 of them, and another ₹50,000 crore for rejuvenating 500 cities, improving their civic amenities and institutions of municipal governance so that they are ready for future IT smartness. This sum is to be spent over five years, with each ‘selected’ city (the States make a pitch) getting a central assistance of ₹100 crore each year over this period. The rest of the funds will be raised from the State governments, municipal debt, real estate investment trusts, infrastructure debt funds and the PPP vehicle. The first challenge is whether such a financial commitment will throw the government’s finances or other important infrastructure expenditures, such as the Railways, out of gear. The second question is related to the failure of PPPs — will the cost of servicing infrastructure become too high for the citizens? A financial roadmap that learns from the mistakes of the past must be put together to allay these doubts. Modelled on Seoul, Singapore and Barcelona, smart cities are meant to leverage India’s IT prowess to alter India’s urban experience — they will be driven by clean energy, with the government working efficiently, thanks to the ICT backbone. Beyond this, however, the policy literature tells us little. What, for instance, is yet to be explained is how the use of cloud-enabled data to run a range of services will be managed for security risk. While this is a project that could take India up the technology ladder if implemented well, the government should take stakeholders into confidence at every stage, which entails being transparent on awarding large contracts and dealing with Big Data and privacy concerns.

Contrary to popular belief, small cities will be carved out of existing cities, which takes care of land acquisition concerns. The idea seems to be to create enclaves of excellence within urban India so that they rub off on other cities. For example, providing 24x7 electricity and water looks like a tall order but if water recycling and renewables are to deliver the goods, we will have a workable model. But for smart cities to become the new normal, they must take the broader socio-economic reality into account. The concept paper does not discuss affordable housing for the poor. These cities cannot work unless the gap between the digital ‘haves’ and ‘have-nots’ narrows dramatically.

The policy has not taken into account India’s industrialisation drive. These model cities have been conceived as service sector hubs rather than manufacturing townships, an inexplicable bias that does not fit in with the larger policy emphasis on manufacturing. Smart cities can, instead, be created along the lines of ‘SEZ townships’, as in China, where the workplace (be it factory or call centre) and home are situated in proximity to each other. In sum, the Centre must revisit the drawing board: it’s not too late.

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