Smart Cities

5 Years agoIndia’s Smart City vision is part of a larger agenda of creating Industrial Corridors between India’s big metropolitan cities in India.

Smart Cities India is all set to become the most-populous country in the world by 2030, making it the home to the biggest and the most under-penetrated market for global manufacturers and service providers. Unlike its preceding generations, this growing population is also shifting to top tier cities of the country giving rise to new megacities estimated to generate 80% of economic growth, with potential to apply modern technologies and infrastructure, promoting better use of scarce resources.

As per estimates, about 25–30 people will migrate every minute to major Indian cities from rural areas in search of better livelihood and better lifestyles. With this momentum, about 843 million people are expected to live in urban areas by 2050. To accommodate this massive urbanization, India needs to find smarter ways to manage complexities, reduce expenses, increase efficiency and improve the quality of life.

With this context, Prime Minister Narendra Modi’s vision “Digital India,” has set an ambitious plan to build 100 smart cities across the country. Modi in his speech quoted, “Cities in the past were built on riverbanks. They are now built along highways. But in the future, they will be built based on availability of optical fiber networks and next-generation infrastructure.”

The Government of India allocated INR70.6 billion (US$1.2 billion) for Smart Cities in Budget 2014–15. Given the sheet scale of the development plan, the public resources would largely be insufficient and the government is working on envisaging new financing routes to boost the program.

The government machinery is working on putting together the standards for executing this mega plan, and identifying the cities to be developed in consultation with states. A few smart cities are already coming up across the country, including Kochi Smart City, Gujarat International Finance Tec-City (GIFT) in Ahmedabad, Naya Raipur in Chhattisgarh, Lavasa in Maharashtra and Wave Infratech's 4,500-acre smart city near New Delhi.

India has also been inviting foreign partnership in developing the smart cities and has signed deals to build eight cities — three with Germany, three with the US, and one each with Spain and Singapore.

India’s Smart City plan is part of a larger agenda of creating Industrial Corridors between India’s big metropolitan cities in India. These include the Delhi-Mumbai Industrial Corridor, the Chennai-Bangalore Industrial Corridor and the Bangalore-Mumbai Economic Corridor. It is hoped that many industrial and commercial centres will be recreated as “Smart Cities” along these corridors. The Delhi-Mumbai Industrial Corridor (DMIC), which is spread across six states, seeks to create seven new smart cities as the nodes of the corridor in its first phase.

Interestingly, these corridors are developed by the Indian Government in collaboration with foreign governments who are keen to find their domestic private enterprises new avenues of investment. Japan is helping India develop its smart cities by investing US$4.5 billion in the first phase of the DMIC project through lending from the Japan International Cooperation Agency (JICA). JICA has also taken up master planning for three “Smart Cities” — Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka — in the Chennai-Bangalore Industrial Corridor. The UK is collaborating with India for developing the Bangalore-Mumbai Economic Corridor project with the help of private companies from Britain.

Eight critical pillars of India’s Smart City Program are:

1. Smart Governance: Investments of about US$1.2 trillion will be required over the next 20 years across areas such as transportation, energy and public security to build smart cities in India. Highlights:

  • US$1.2 billion allocated for smart cities and FDI norms relaxed
  • US$83 million allocated for Digital India Initiative
  • PPP Model to be used to upgrade infrastructure in 500 urban areas
  • Smart City projects to create 10-15% rise in employment
  • Ministry of Urban Development has plans to develop 2 smart cities in each of India’s 29 states
  • Delhi Mumbai Industrial Corridor Development Corporation Ltd (DMICDC) plans seven “smart cities” along the 1,500 km industrial corridor across six states with a total investment of US$100 billion
2. Smart Energy: Three crucial dimensions of smart energy systems are: Smart Grid
  • Electrification of all households with power available for at least 8 hours per day by 2017
  • Establish smart grid test bed by 2014 and smart grid knowledge centre by 2015
  • Implementation of 8 smart grid pilot projects in India with an investment of US$10 million
Energy Storage
  • Addition of 88,000 MW of power generation capacity in the twelfth five year plan (2012-17)
  • India needs to add at least 250-400 GW of new power generation capacity by 2030
  • The Power Grid Corporation of India has planned to invest US$26 billion in the next five years
  • Smart Meters
  • India to install 130 million smart meters by 2021
3. Smart Environment: Three crucial dimensions of ensuring sustainable development are: Renewable Energy
  • Ministry of New and Renewable Energy has plans to add capacity of 30,000 MW in the 12th Five Year Plan (2012-17)
  • Water and Waste Water Management
  • The Indian Ministry of Water Resources plans to invest US$50 billion in the water sector in the coming years
  • The Yamuna Action Plan Phase III project for Delhi is approved at an estimated cost of US$276 million
  • Sanitation
  • About 67% of the rural population continues to defecate in the open, and India accounts for about 50% of the world’s open defecation
  • The Government of India and the World Bank have signed a US$500 million credit for the Rural Water Supply and Sanitation (RWSS) project in the Indian states of Assam, Bihar, Jharkhand and Uttar Pradesh
4. Smart Transportation: The Government of India has set ambitious targets of developing public transportation system to support the ever growing urban populace. Green Transport
  • The Government of India has approved a US$4.13 billion plan to spur electric and hybrid vehicle production by setting an ambitious target of 6 million vehicles by 2020
  • Electric vehicle charging stations in all urban areas and along all state and national highways by 2027 Railways
  • Metro: Ministry of Urban Development plans to invest more than US$20 billion on the metro rail projects in coming years
  • High Speed Rail: The proposed 534 km Mumbai-Ahmedabad high speed rail project will have an investment of around US$10.5 billion
  • Monorail: India’s first monorail project at Mumbai will cost around US$500 million, of which US$183 million has been spent on phase I
5. Smart IT & Communications: Information and Communications Technology
  • Cloud computing will evolve into a US$4.5 billion market in India by 2016
  • Broadband connections to 175 million users by 2017
Security and Surveillance
  • Under the flagship “Safe City” project, the Union Ministry proposes US$333 million to make seven big cities (Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore and Hyderabad) to focus on technological advancement rather than manpower Disaster Management
  • The Government of India and World Bank signed US$236 million agreement for reducing disaster risks in coastal villages of Tamil Nadu and Puducherry
6. 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
  • The Intelligent Building Management Systems market is around US$621 million and is expected to reach US$1,891 million by 2016
  • Smart Buildings will save up to 30% of water usage, 40% of energy usage and reduction of building maintenance costs by 10 to 30%
7. Smart Health Hospitals
  • Health budget up by 27% in FY 2014-15 to US$5.26 billion, with special focus on improving affordable healthcare for all
  • To establish six new AIIMS like institutes and 12 government medical colleges in the country
  • Accessible, affordable and effective healthcare system for 1.2+ billion citizens
  • FDI limit in the insurance sector increased to 49% from 26%
  • Insurance industry has potential to reach US$1 trillion by 2020
Medical Devices
  • Indian medical devices market to reach US$11 billion by 2023
  • 100% FDI allowed in the medical devices sector under the automatic route
  • Wellness
  • Indian wellness industry is expected to reach around US$16.65 billion by 2015
8. Smart Education: The Government of India has allocated US$13.95 billion in the Union Budget 2014-15 for the education sector, up by 12.3% from the previous year.
  • Budget has allocated US$78.5 million to set-up five new IITs and five new IIMs
  • The Ministry of Human Resource Development plans to have 1,000 private universities for producing trained manpower to meet services and industry requirements
  • 100% FDI allowed in the education sector
  • India’s online education market size expected to be US$40 billion by 2017