Business Today

Aspiring smart cities have a tough job ahead

Cities, very quickly, would have to develop great financial planning skills, demonstrate inclusivity, show reforms, prove tech-savviness, learn to make Modi-style presentations, and above all, canvass for support from its citizens.  

twitter-logo Goutam Das        Last Updated: June 25, 2015  | 19:51 IST
The Palava City - a smart city near Mumbai - is pictured here. (Photo: Rachit Goswami)

Goutam Das, Senior Editor, Business Today
Prime Minister Narendra Modi on Thursday launched India's smart city guidelines -a primer on how India will go about retrofitting, redeveloping and building the 100 smart cities the government aspires for. Some of the guidelines were already known-for instance, the process of selecting the smart cities based on a two-stage competitive process. We know more details now.

What is also clear is that most cities will have a super tough job ahead. They will all struggle to meet the long list of criteria the Ministry of Urban Development has put out. Cities, very quickly, would have to develop great financial planning skills, demonstrate inclusivity, show reforms, prove tech-savviness, learn to make Modi-style presentations, and above all, canvass for support from its citizens.   

Let's look at some of the criteria. In the first stage of the competition, called 'City Challenge', the cities will be shortlisted by the states based on several parameters, each of them carrying a score. For instance, in assessing the self-financing ability of a city, the timely payment of salaries by the urban local body carries five points. Another five points is for the proper audit of accounts while the percentage contribution of tax revenue, fees, user charges, rents and other internal revenue sources can potentially earn a city 10 points. Institutional systems and capacities will also matter - such as the total collection of internally generated revenue and whether they are showing an increasing trend.  

In the second stage of the competition, an expert committee constituted by the Ministry of Urban Development will evaluate cities from the pool recommended by the states but these cities got to present brilliant proposals - and again, meet an exhaustive list of benchmarks.

Evaluation parameters include a city's financing plan, cost effectiveness, financial sustainability plan and its implementation plan among others. Not only this, cities have to come up with a perfect vision statement that "comes out of the needs, aspirations and wishes of the local people to make their city more liveable." Citizen consultation and how well the "contrary voices" are accommodated in the city's strategy are part of the evaluation criteria.

The parameters reflect months of brainstorming by the government and appear great on paper too. It is apparent the Centre wants a bottoms-up approach to smart cities rather than a top-down one where it dictates everything.

That is being democratic; great politics too. All the same, it is too time consuming to get everybody on the same page. There's another catch. Most of our cities do not have the administrative bandwidth or the tech knowhow to do many of the things being asked for. Can they use social media and mobile governance for citizen consultation? Or get hold of citizen innovations through "crowd sourced IT interventions"? Many cities have no money either.

The Founder Director of the Center for SMART Cities, R K Misra, wrote a guest column for Business Today in March this year. "Most of our city governments are bankrupt - unable to even pay the staff salaries and merely survive on state and central grants. This is the main cause for the mess our cities are in, which necessitated initiatives like smart cities. Our cities do not have administrative capacity and techno-managerial competence to present their case meaningfully for any City Challenge," he wrote.

Cities, of course, can get around the problem of creating smart city proposals by employing consultants-if they are willing to pay.

Nevertheless, there will be many challenges beyond; even after cities get picked. A special purpose vehicle (SPV) will have to be formed to implement the smart city mission - the state and the urban local body will be its promoters with 50:50 equity shareholding. The SPV will have a full time CEO to head its operations and can only be appointed after the approval of the Ministry of Urban Development. 

The idea is to ensure operational independence and autonomy - and the SPV model has worked perfectly in the case of greenfield (new) cities such as the Gujarat International Finance Tec-City (GIFT), near Gandhinagar. But brownfield (existing) cities would have its own issues. An SPV may mean devolution of power from the municipal commissioners, MLAs and other government officials to the person heading the SPV. Will they be comfortable in relinquishing power?

India is just taking baby steps in its smart city journey. There are no answers to many of these questions.

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