August 2015

Rejuvenated Cities: The Road Ahead

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Smart initiatives could help amalgamate skill, scale and speed of Urban Evolution in the country, writes noted Government transformation expert and Partner at KPMG, Jaijit Bhattacharya

Road AheadOver the last few months, we have been witnessing, relatively quietly, perhaps the most significant turning point for India’s Urban Infrastructure. The launch of ambitious projects—100 Smart Cities, AMRUT (Atal Mission for Rejuvenation and Urban Transformation) for 500 Cities and Housing for All—might hold implications that have so far been unimagined. They can potentially change the way we live and work, the way we do business and the way we are perceived by the rest of the world. More importantly, they can certainly constitute the explosive push for India’s economy and its infrastructure, on a scale that will dwarf the growth provided by the Golden Quadrilateral project.

To put the magnitude of impact that this decision has, it is important to keep the macro perspective in place. The total cost of renewal of 500 cities is estimated to be roughly around USD 5 trillion; India’s current GDP is about USD 2 trillion. That is exactly how massive these initiatives are.

Thus, the roughly USD 16 billion, committed for the initial Central Government spend, is an important first step towards unlocking the larger, longer term economic activity of upgrading and building smart cities/ rejuvenated cities. Moreover, the initiatives will trigger a virtuous cycle of efficiencies being unleashed in the economy due to the building of efficient cities and habitations. Combined with the Make in India initiative, if the multiplier effect of the spend in building these cities is captured within the Indian economy, it can potentially propel the country towards growth rates that we have never witnessed. This, if the initiatives manage to gain the expected momentum, could lead to an explosive growth in the Indian economy.

What is more heartening to note is that these initiatives might also provide the much-needed growth impetus to the global economy. Vast amounts of

Jaijit Bhattacharya Government transformation expert and Partner at KPMG

Jaijit Bhattacharya
Government transformation expert and Partner at KPMG

steel, cement, electronics, furnishings, electrical equipment, sewage plants, etc. will be required to build these cities. Not all of this will be available in India in the short term. Thus, some of these requirements will be imported from the world over, triggering growth in the global economy, at least to an extent.

However, the things must not stop at just being ‘smart’, the aim is to get smarter and augment efficiencies and scalability. The primary focus is to insert IT and sensors for primarily safety, security, sustainability and energy efficiency of the cities. It, thus, includes leveraging IT and sensors into some other aspects of the city, such as transportation, water management, waste management, smarter municipal management and planning. The evolving cities need to develop mechanisms to address complex economic, political and social issues. The solution perhaps lies in creating ‘Next Generation Cities’ that display unseen levels of sustainability and capacities.

ICT, Data Analytics, Traffic Management, Energy Management and Citizens will need to scale up and continually reinvent themselves. Infrastructure, Investments and Implementation might constitute the core pillars for their physical evolution, but only efficient Citizen Engagement and Governance will enable the transformation.

Both Greenfield and Brownfield Smart City Developments will look to utilise ICT at unprecedented levels. Thus, Digital Governance might just become both the means as well as the end of urban evolution and enable the re-imagination of the National eGovernance Plan (NeGP). Simple, Morally Accountable, Responsive and Transparent (SMART) governance (as the Second Administrative Reforms Commission, Eleventh Report, defined the term Smart) might become a reality. Through Aadhaar, we have already witnessed what digitisation can do to increase efficiency and ease of governance.

The roughly USD 16 billion committed for the initial Central Government spend is an important first step towards unlocking the larger, longer term economic activity of upgrading and building smart cities/ rejuvenated cities

Smart-CityHowever, given that enormous scale and scope for complexities, challenges remain to be tackled. In addition to the obvious financial and technical hurdles, integrating Smart Cities and societies is a ticklish task. Smart Cities initiative, when juxtaposed with the initiative of Housing for All by 2022 and the Make in India programme, will have highly amplified impact on India, the Indian industry and Indians per se. Thus, implementation has to be smooth and flawless. This calls for hybrid mechanisms and frameworks in place. The resources at stake are huge and equitable distribution is thus imperative.

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