Smart Cities & AMRUT: Two Urban Missions That Can Transform Urban India

Shailesh Pathak

May 03, 2015, 12:25 AM | Updated Feb 12, 2016, 05:19 PM IST

India is urbanising rapidly and our cities need to keep pace with that process. For that, a co-operative model of governance between the centre, states, and city-level governments is necessary. 

The Union Cabinet’s approval of two ‘Urban Missions’ for smart cities and urban transformation is great news. Indians are rapidly moving from villages to cities at a pace that will only increase. Union Minister for Urban Development Venkaiah Naidu often underlines this by saying he migrated from Ministry of Rural Development to Ministry of Urban Development. Similarly, I have migrated from organizing synchronized Gram Sabhas across 880 village panchayats, to building smart cities and urban infrastructure. Having worked as an Administrator, Municipal Corporation, as well as with Commissioners of Municipal Corporations, one is delighted at the importance being now accorded to cities as creators of jobs and, over the long run, citizen satisfaction.

Most union government initiatives announced over the last year will work only if cities become better. ‘Swachh Bharat’ demand may be created by PM Modi, but supply of sanitation will be done by city governments aka Municipal Corporations. ‘Make in India’ in manufacturing as well as ‘Skills Mission’ will happen in largely urban habitats. The ‘Housing for all by 2022’ promise will be delivered in cities. The comment by some that ‘nothing is happening on the ground despite much talk in Delhi’ shows naivete about the powers of union governments (defence & national security, economy & taxation, pan-India enabling environment & policies etc)  vis-a-vis city & state governments, who actually do stuff ‘on the ground’. Perhaps the only times you’d interact with the union government is getting your passport, paying your income and service taxes or central excise, higher education institutions, or when you use Indian Railways. Almost all other citizen interaction is with state and city governments. However, Team Modi must understand such perceptions, and work on catalysing ground-level changes by helping state and city governments. The two urban missions are an example.

For some perspective, consider that the US has only 9 cities above a million population, while India has 53. Yet urbanisation discourse and solutions in the US are far more advanced. China has over 100 million plus cities, much more empowered than any Indian city, with keen Mayors running them, hence their rapid change and progress. Another oft-ignored truth: most Indian urban population growth would happen in and around existing cities and their peripheries, not in new cities far removed from traditional urban populations. The much-hyped DMIC cities will take at least 20 years to develop to even a million-plus population. Hence the importance of urban renewal is existing cities.

With a five-year outlay of a trillion rupees (Rupees one lakh crore, Rs 98000 crore to be precise), the smart cities Mission will cover 100 cities, while AMRUT (Atal Mission for Rejuvenation & Transformation) would extend to another 500 cities. The difference: smart cities would be chosen through a ‘City Challenge Competition’, that would evaluate preparedness and capacity of cities that are sponsored by their state governments. Initially about 20 cities would be taken up for a Union grant of Rs 100 crores per year for five years. One can assume that over five years, all 100 cities would be taken up under the smart cities mission. AMRUT cities, with over one lakh population (0.1 mn) would be finalised by the union government in consultation with state governments.

Thus at least Rs 2 trillion (Rs 2 lakh crores) and more are going to flow into 600 Indian cities over the next five years, since the union government’s trillion rupees is going to be matched by state and city governments. This is unprecedented in size and scale.

Even this amount is more of an incentive, since Rs 100 crore for a smart city would come only when the city itself demonstrates capacity to raise further funds and execute projects in all  citizen-friendly areas. The Rs 500 crores over 5 years to a smart city will perhaps be a fraction of what the city itself will be able to raise, since it will reform its governance systems towards efficient service delivery. A virtuous cycle for citizens, instead of just traveling the technology ‘smart city’ path, and putting in sensors and technology without citizen satisfaction. A recent study on Urban India states that all cities would be able to raise more than 80% of their fund requirements, given better capacities and governance. Smart cities and AMRUT Cities would definitely be required to make such improvements.

Perhaps the best part is increased autonomy for states and cities. There is no centralisation like in earlier schemes such as JNNURM, when every project had to come to Delhi for approval. Indeed, one heard that in the earlier union government, JNNURM-II was stuck, since this insistence on Delhi approving each project was opposed by other wings of government. Under the two Urban Missions, states would make their overall plans, and based on an annual approved action plan, funds would be disbursed by the union government. We’d like to see further autonomy with such activities traveling to the city level, not held back at the state capital.

Another good part is robust execution design. Smart cities will be chosen in a competitive manner, based on pre-announced parameters. States would encourage their cities to apply on these parameters, and hopefully, a transparent process would select the first year’s smart cities. Execution would be done through a dedicated SPV (special purpose vehicle) for implementation. Such an SPV would have shareholding from the union government, the state government, and hopefully the city government as well.

Flexibility in smart city project formulation, from retrofiting (50 acres) to redevelopment (250 acres) to pan-city initiatives and greenfield ‘new cities’ is well thought out. In particular, retrofitting could include all railway stations in all of India’s million-plus cities. The city that you, dear reader, grew up in has changed completely over the last 15 years, but its railway station has  remained the same. Over the next 10 years, railway station redevelopment could be the largest improvement in Indian cities, if the railway ministry, the urban development Ministry and state governments work together.

Unlike earlier fears that smart cities would essentially lead to only tech spends and not citizen-friendliness, the ‘focus will be on core infrastructure services like: Adequate and clean Water supply, Sanitation and Solid Waste Management, Efficient Urban Mobility and Public Transportation, Affordable housing for the poor, power supply, robust IT connectivity, Governance, especially e-governance and citizen participation, safety and security of citizens, health and education and sustainable urban environment.’ Any improvement in these would make Indian cities much more liveable.

AMRUT implementation would expect urban reforms, such as ‘e-governance, constitution of professional municipal cadre, devolving funds and functions to urban local bodies, review of building bye-laws, improvement in assessment and collection of municipal taxes, credit rating of urban local bodies, energy and water audit and citizen-centric urban planning.’ All this would improve the quality of urban governance, leading to better citizen satisfaction.

Private sector will be a large contributor to these smart cities and urban transformation across all activities. However, a note of caution on the PPP (Public Private Partnership) model. PPPs were much-hyped in infrastructure, but seem to be a broken model today. Most critical infrastructure construction would be created using government money, while all construction contracts would flow to the private sector. The easier space to use PPPs would be in the maintenance of infrastructure and city facilities.

Before ending, a story I shared with the audience at our smart cities seminar at the Hannover Messe Fair in early April. My office was trying hotel room bookings over 70 km away, when we made an online booking of a small apartment next to the Hannover City Centre. I could walk to the nearest tram station in 4 minutes, and with a Euro 6.20 (Rs 430) daily pass (TagesEinzelTicket), I never needed a car during my entire stay. I could drink water from the apartment tap. During my morning walk, I saw children walking or cycling to neighbourhood schools (run by the government) without cars to drop them. There was a nearby park with walking trails and exercise equipment as well. Four things that perhaps one would never find in an Indian city. So is Hannover a smart city in Germany? Most Indian government decision makers at Hannover stayed in faraway hotels and hired day taxis – they would not have experienced this ‘smart city’.

There could be many criticisms of the two Urban Missions on smart cities and AMRUT. Several would be valid, and in 2020 one could analyse why they did not achieve their full potential. In the next piece, I would examine the main likely reason they would under-achieve. But for a rapidly urbanising India, these Missions are a fillip to Indian cities to get better, smarter, and more citizen friendly. Most of our grandfathers lived in villages; had urban transition not taken place in the last three generations, our families would have been locked into low-value rural incomes. The next two decades are going to see unprecedented rural-to-urban migration in India. India has to improve its cities to enable our poor migrants to become better off.

Shailesh Pathak is into Cities, Infrastructure, Finance and Public Policy, with 14 years in the private sector and 16 years with the IAS. He tweets at @shypk

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