Smart Enough?

Proposed projects in the selected cities have limited scope

Cities are engines of growth, as they are centres of economic activity, investments and employment opportunities. However, these features can also limit a city’s growth, as large and growing populations exert pressure on its infrastructure. This pressure on urban infrastructure is evident in a number of cities across the world, and will continue to impede inclusive development unless backed by meticulous urban planning.

As India’s population has increased, infrastructure development in cities/urban centres has not kept pace. There is thus a need for comprehensive development of physical, institutional, social and economic infrastructure to improve quality of life and, further, to attract investments. In turn, this will set in motion a virtuous cycle of growth and development. The development of smart cities is a step in this direction. Through the Smart Cities Mission, the government is looking to set an example that can be replicated both within and outside the city, catalysing the creation of similar smart cities in various regions of the country. While the mission has been one of the most talked about government programmes, there are concerns regarding its successful implementation.

Strong case versus readiness

India is experiencing a population explosion, and this is a catalyst for rural-urban migration. The influx into urban areas is driven by employment opportunities, better standards of living and better educational and infrastructural facilities. Urban population has grown at a compound annual growth rate of 2.8 per cent  (Census 2011), increasing the rate of urbanisation from 27.8 per cent to 31.2 per cent. Cities, most of which already have pressing infrastructure inadequacies, are struggling to accommodate the ever-increasing population, resulting in infrastructure creaking under the strain. The “smart” concept, it is hoped, will aid these urban centres in tackling the issues related to large-scale urbanisation with the help of better infrastructure and information and communication technology (ICT) solutions.

However, India’s readiness for the concept is in question. Essentially, the “smart” component rests on the data captured by sensors and analysed by algorithms (or simply put, ICT) to aid decision-making by the concerned authorities, in real time. This saves time, brings in efficiency and enhances the quality of life of citizens. While it is a good idea to use technologies for efficiency gains, it must be understood that technology is not a panacea. It is rather an enabler. Many cities are rather “dysfunctional” at present, marred by a lack of basic infrastructure. In such cases, developing basic infrastructure and terming it “smart” is inappropriate.

No doubt, the Smart Cities Mission will provide jobs and attract new investments. For global firms providing smart city services, the benefit is entry into a rapidly growing market. By 2020, India is expected to be one of the growth spots in terms of development of smart cities. However, more than market creation and economic value generation, it must be acknowledged that the ultimate goal of enhancing living standards in a sustainable manner must not involve “blind” technology deployment. While the present scenario warrants smart cities, the current state of infrastructure will make its realisation extremely challenging.

Area-based development versus pan-city solutions

The approach to developing smart cities has “area-based development” at its core. Under this component, proposals submitted by cities include redeveloping old areas/infrastructure, creating new central business districts, retrofitting infrastructure (such as water supply,

sewerage) and creating public spaces. The “pan-city” component, however, has been limited to information technology (IT)-based services such as CCTV-monitored central command systems, “smart” education portals, and “intelligent” water and traffic management systems.

Proposals from most of the selected cities have prioritised developing a small area rather than the entire city. Over three-fifths of the funding from the mission is to be spent on area-based development, the beneficiaries of which are, on average, 4-5 per cent of the city’s population. This raises concerns about the final outcome – whether only an area is to be made smart, and if this is so, would it then qualify as a smart city.

The mission is explicitly aimed at land monetisation. It is widely understood that land (as a resource) has been neither fully nor appropriately exploited (at the right prices). The mission is attempting to address this. One of the ways in which this can be fixed is to begin project-based development, as envisioned by the mission. However, it is questionable whether land can be monetised across an entire city.

The mission also fails to create an institutional framework for urban development, which could have been a sustainable blueprint for governance in cities. According to some industry analysts, the development of “smart cities” is more of a “smart area” development.

Shortcomings of the PPP model

Smart city projects, many of which will be executed in the public-private partnership (PPP) mode, hinge critically on funds from private players, given the government’s limited fiscal capacity and the large quantum of funds required. Mainly, government-sourced funds are expected to have a “crowd-in” impact. However, thus far, experience with PPPs has been mixed across infrastructure sectors. An enabling environment that supports PPP projects is thus important.

While so far the PPP model has been plagued by a number of issues, the acceptance of the Kelkar Committee’s key recommendations is expected to bring in the much-needed change. This, in turn, is expected to favourably impact the implementation of PPP projects proposed under the Smart Cities Mission.

“Smart” versus “functional” component

The functionality or actual living conditions of a city take priority over its ICT-led “smartness”. A city with poor living conditions in most parts, but having ICT components in place (benefiting only a fraction of its citizens) can hardly be termed “smart”. It must be understood that cities themselves have complex and hetero-geneous structures and levels of development. For instance, some parts of Delhi are far more developed than other parts, which lack even basic infrastructure facilities such as regular water supply.

In this backdrop, adding a mere layer of technology is not a solution. Technologies can bring in substantial efficiency gains and can aid in real-time decision-making, once basic infrastructure is in place. They can also help in data analysis for better deployment of resources and assessing the gaps in deployment versus requirement. A smart city should thus be synonymous with rational, holistic urban planning. The development of adequate physical and social infrastructure with stringent implementation and management of projects should be the target. In essence, a technology-centric approach has to complement a city’s basic infrastructure and the provision of sanitation facilities, public transport, clean water supply, etc. Only then will technology be a key enabler for making cities smart, in the true sense of the word.

A mix of cities

A number of megacities such as Bengaluru and Kolkata failed to make it to the list of selected cities under the Smart Cities Mission. Other prominent cities that failed to make the cut include Shimla, Gangtok and Patna. Even Gurgaon and Noida, seen as technology hubs, are not part of the list. Chennai is the only metro which has been selected under the mission.

A number of reasons can be attributed to the selection of the current mix of cities. Big cities have low levels of utilisation of existing urban renewal funds (under the Jawaharlal Nehru National Urban Renewal Mission [JNNURM]) resulting in a lower score. Also, a number of these cities have a record of poor implementation and non-completion of projects sanctioned under the JNNURM. State governments’ discretion to give a chance to less prom-inent cities is another reason for the selection.

In a nutshell, due to an attempt to ensure equity among states and the inclusion of smaller and less prominent areas, some state cap-itals and bigger and better-known cities have been left out of the Smart Cities Mission. However, the cities that have been left out can begin to take steps to ensure the provision of basic services along with a technology-enabled ecosystem.

Significant interest not yet translated into investments

According to reports, as of September 1, 2016, the mission did not garner any overseas investment, despite the keenness shown by a number of foreign players. Besides, only two MoUs have been signed so far. The US Trade and Development Agency inked an MoU for smart city projects in Visakhapatnam, Allahabad and Ajmer while the French Agency for Development signed a pact to assist Nagpur, Chandigarh and Oulgaret in executing proposed smart city projects.


The Smart Cities Mission is no doubt a step in the right direction. However, there needs to be a thorough understanding of its end goals, so as to create a holistic approach for its implementation. A number of issues exist on the operational front, such as those pertaining to funding, project execution and risk management. Though it remains to be seen how the mission will pan out, the process is expected to be fraught with challenges. The role of the government will be extremely crucial to iron out concerns and to make sure that the benefits from the mission are equitable.


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