What are the benefits of a smart city as announced by the Indian finance minister in his 2014 budget?

polity :governance :smart city

Answer by Ugam Kamat:

The grandiose promise of building 100 smart cities has been part of Modi’s acche din vision from the outset, and it would have been surprising if the budget had not made some mention of it. So what is so smart about these cities and how can it lead to the development of the country?

It would incorporate Rural to Urban Migration
The project’s aim is “housing for all,” and that is possible only through affordable housing. 50% of India's population would be living in cities by 2050. It is for this rising class that the need for better living standards arises. To accommodate this growing and increasingly mobile populace, it is imperative that a sustainable model of housing be developed.

Most Indian cities haven’t had the structural changes to accommodate such a large influx in decades, giving rise to conflicts and strife. How will they handle this additional pressure? Or will most of India’s urban space simply turn into slums? The civic facilities have crumbled; power cuts, water shortages, flooding, traffic congestion etc. have become regular features of these cities. The speed of urbanization poses an unprecedented managerial and policy challenge – smart cities are an answer to handling the seismic shift in the makeup of the nation.

Are they going to build new cities?
In his budget speech, Jaitley listed out exactly why the government believes it needs to be spending money on 100 smart cities. He claimed that “unless new cities are developed to accommodate the burgeoning number of people, the existing cities would soon become unlivable.”

That said, he also made it clear that the Rs 7,060 crore allocation would not all go into setting up brand new cities. Instead, the aim is to build satellite towns near existing urban areas on the smart city template, upgrade existing mid-sized cities, and to build settlements along industrial corridors.

What exactly are "Smart Cities"?
The concept of smart city is influenced by the idea of developing the urban hubs which would be running on technology to provide better electricity and water supply, improve sanitation and recycling, proper traffic and transport management systems.

Who will pay for them?
₹ 70 crore per city will clearly not be enough, and even if more is added, it’s unlikely the government will have the resources to pay for the cities. In the budget, the government announced that it was relaxing norms for foreign direct investment to make it easier for outside companies to invest in smart cities. In addition, India has spoken to France, Japan and Singapore about collaborating on the projects.

What are the benefits of a smart city as announced by the Indian finance minister in his 2014 budget?


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