Two out of every three people in the world will be living in cities by 2050, according to a recent UN report, with India, China and Nigeria contributing the most to the growth in urbanisation.
India plans to build 100 smart cities. If each has a population of one million, this implies a rural to urban migration of 100 million people. Building these smart cities is both a great opportunity and a huge challenge. Opportunity, because the building and subsequent administration of the cities will help address some of India’s problems.
We can use the latest technologies which can help us leapfrog over legacy issues. Challenge because the planning requires smartness, competency, honesty and dedication, not qualities our polity is renowned for.
So, what are some of the things that need to be done? Start with electricity. This sector has been continually plagued because of two reasons. One is theft of electricity (euphemistically called transmission and distribution losses) and the other is the penchant for state politicians to promise free or subsidised electricity.
Power reforms Although India has enough capacity to generate electricity, it is hamstrung by the fact that the State Electricity Boards (SEBs) are always bankrupt and cannot be relied upon to pay the power generators/distributors for power purchased from them. The SEBs need to be financially bailed out continually. The latest bailout scheme, Uday, will just kick the can down the road, and is not a solution. The correct option is to privatise the SEBs, stop the theft of power, and price power equally, providing subsidies through direct transfer. This requires political courage at the Centre and political vision and co-operation at the State level.
The government can think of distributed power, using micro grids, instead of centralised power with its existing distribution problems. Combine this with new technologies of renewable energy and storage technologies now available as a back-up. Today, India can install solar power at under $1/watt.
India has some 100GW in polluting diesel gensets to provide back-up power because of our inefficient system. New storage technologies, if used in the new cities, can do away with this diesel storage and improve the environment.
Novel way to beat pollution Or take building construction, which causes a lot of dust pollution and is the biggest contributor to PM2.5 (particulate matter). Why not use the Chinese method of prefabricated walls and ceilings, energy-efficient methods and round-the-clock construction using which the Chinese put up a 57-storey building in 19 days? Prefab walls/ceilings obviated the need to haul concrete in 15,000 trucks, and the PM2.5 was filtered 99.9 per cent. The buildings are energy-efficient.
The government must also plan urban transport systems. Currently, it encourages private transport. The lifetime tax on sale of each car gives the state an incentive to sell more.
Instead, we can devise better transport infrastructure, plan for an efficient, cost-effective public transport combined with shared private transport and shared services like Uber or Ola. Then, people will not feel the need to own vehicles. Private car ownership should be discouraged, as in Singapore, with high taxation.
The cities should be built with a permanent underground tunnel through which should pass all pipes, wires and cables, obviating the need to dig up roads periodically.
All these would throw up investment opportunities, such as in solar power companies, in power storage manufacturers, in driverless cars (if an automaker gets into the segment in India) and in companies that provide software to them.
For India, if 100 million people move away from the agriculture sector on which they depend for their livelihood, it will help boost productivity and reduce the inequality of terms of trade. Currently 52 per cent of the population depends on agriculture and gets 14 per cent of the national income.
The writer is India Head, Euromoney Conferences