By Dr. Sriparna Pathak

The importance of cities in promoting economic growth remains true across the globe. In India, the current urban population contributes to 63% (Census 2011) of GDP. By 2030, India’s urban areas are expected to house 75% of the GDP. Furthermore, cities with currently 31% of the Indian population, will probably jump to 40% by 2030. However, this requires immense efforts in all round development of the infrastructure. It is especially relevant for improving the quality of life and to promote further growth. Hence, development of Smart Cities is a step in that direction.

The Smart Cities Mission is an initiative by the Indian Government to drive economic growth by enabling local development and harnessing technology. It aims to ensure a better quality of life for its citizens. The mission will bring development in the sectors including automobile, construction, electronic systems, railways, ports and shipping among others. As a result, India has been concentrating on forging good relations with other countries as well.

Agreements Signed Between India and Other Countries

India -Japan:

  • Japan has signed an agreement for the creation of smart cities in 2015, starting with the Kyoto-Varanasi project. Also, promised $35 billion to India through public and private funding over the next five years for developmental projects.
  • Further, an MoU for cooperation in heritage conservation, city modernisation, culture and academics has been signed.

India – Singapore:

  • Singapore has offered to build 100 smart cities. It has also promised help in key infrastructure projects. These include the Delhi-Mumbai industrial corridor which will lead to the creation of seven Greenfield smart cities.
  • In addition, Singapore has contributed to the master plan for the city of Amaravati.
  • Singapore is also supporting the Center of Excellence in Tourism Training in Udaipur, Rajasthan.

India – France: 

  • An MoU was signed at the Indo-French summit for technical cooperation in the field of sustainable urban development and for the development of a smart city in Chandigarh.
  • France has also offered its expertise in urban development to build “new age” cities. Hence, it plans to assist in developing Nagpur and Pondicherry as smart cities.

India – Germany:

  • For planning a framework for the development of three smart cities, a six-member joint committee is being set up. The committee will have two representatives of the Urban Development Ministry and three from Germany.

 India – USA

  • India and U.S.A have signed three MoUs to boost the ‘smart cities’ scheme. The U.S. is partnering with India in developing three smart cities in Allahabad, Ajmer, and Visakhapatnam.
  • In addition, U.S.A. is also assisting in project planning, infrastructure development, feasibility studies and capacity building.

India – Spain:

  • The Spanish minister said that Spain is keen to associate with India in infrastructure promotion and smart cities development.
  • Hence, Spain will assist in developing Delhi as the first global and smart city in India within the framework of the drafted MoU.

India – Canada:

  • Canada has offered to help India in building smart cities and in achieving its target of housing for all. It has offered wooden multi-storey housing technology. In addition, it will provide technology for water recycling.

India – China:

  • There is an agreement between Guangdong and Maharashtra on cooperation in the smart city mission.
  • To build a new smart city in Gujarat,  an MoU pledging investments worth Rs 19,000 crore was signed in 2015 between the Gujarat government and China Small and Medium Enterprise Investment Limited (CSMEI).
  • Guangdong’s Richwood Group and iNDEXTb signed an MoU. It will aim to develop hospitality and tourism infrastructure at Gandhinagar, transport infrastructure in Surat and logistic parks at Kandla port and Dahej Petroleum Chemicals and Petrochemical Investment Region (PCPIR).
india-foreign-direct-investment

Increasing FDI Volume | Source: Trading Economics

Implementation Challenges

  • Availability of Master Plan or City Development Plan: 70-80 percent of the Indian cities do not have a master plan, which is a key element for the development of a city.
  • Financial sustainability of urban local bodies (ULBs): Most ULBs are not financially self-sustainable and tariff levels fixed by the ULBs for providing services often do not mirror the cost of supplying the same. Even if additional investments are recovered in a phased manner, inadequate cost recovery will lead to continued financial losses.
  • Three-tier governance: Successful implementation of smart city solutions will need effective coordination between various institutions. Furthermore, there should be coordination between the central, state and local government agencies on various issues. These issues include financing and sharing of best practices and service delivery processes.
  • Reliability of utility services: For a smart city, the focus is on the reliability of utility services. Most of all, amenities like electricity, water etc. need to focus on renewable sources. The agreements signed are laudable.

However, these challenges should not hinder their implementation.

(views are personal)


Dr. Sriparna Pathak is a Consultant at the Policy Planning and Research Division of the Ministry of External Affairs, New Delhi. The views expressed in the article are personal and do not reflect those of the Ministry or of the Government of India.

Featured Image Credits: Visual Hunt

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Posted by The Indian Economist