India Shows Way Forward on Building Smart Cities

The smart cities building initiative crossed a major milestone today with the states and other stakeholders coming out with the criteria for selection and ranking of cities and broadly agreeing on innovative financing models and urban governance reforms reforms to be implemented for building 100 smart cities. The way forward emerged after intense discussions at the two day ‘Consultation Workshop of States and Stakeholders on Smart Cities’ that concluded today. The important stakeholder consultations were organized by the Ministry of Urban Development on the direction of Prime Minister Shri Narendra Modi to take the states on board before proceeding further with a the launch of the Smart Cities initiative.

The final recommendations of states and other stakeholders were today presented at the concluding Plenary Session chaired by the Minister of State for Urban Development and Housing & Urban Poverty Alleviation Shri Babul Supriyo. Principal Secretaries and Municipal Commissioners from about 25 states, industry representatives and urban experts participated in the deliberations before coming out with the way forward.

Regarding selection of cities for development as smart cities, the States and other stakeholders have suggested the Availability of a Vision and City Development Strategy, Progress under Swachh Bharat Mission, Timely Payment of Salaries to Municipal Staff, Information and Grievance Redressal Mechanism and e-News Letter as basic eligibility conditions for participation in the ‘Smart City Challenge’ competition.

For further ranking of cities for final selection, the States have suggested the parameters and respective weightages that include: Self-financing ability(25% weightage), Institutional Systems and Capacities(25%), Existing Service Levels and committed plan of action for 3 years (25%), Past track record in implementing reforms(15%) and Quality of Vision Document(10%).

On the reforms front, the states have suggested two sets of reforms separately for small and metropolitan cities, land monetization, increased FAR norms with transparent policies, quick progress towards e-governance and online service delivery, Integrated GIS based Master Plans including for sanitation, mobility, land use, digital connectivity, disaster risk management and climate change, policy reforms, fixed tenures for Mayors and municipal officials, improving revenues through 100% collection of taxes and user charges, minimum educational qualifications for corporators and their capacity building, Economic Master Planning for cities before physical Master Plans, creation of municipal cadre, credit rating etc.

With regard to financing, the states have suggested that in addition to PPP model, they should be given the option of EPC(Engineering Procurement Contract), user fee based concessions to promote private sector participation, imposing impact fee on organisations that benefit from improved infrastructure, making cluster based projects to improve viability of projects for private funding, government support for making projects viable for private investors, unbundling of services to make projects investment worthy, creation of a low cost pooled fund with the support of Asian Development Bank, World Bank, Pension Funds, Sovereign Funds etc, Credit Rating of cities, policy changes to make urban projects viable such as support to sale of compost prepared from solid waste as given to chemical fertilizers, corporatization of services etc.

Minister of States Shri Babul Supriyo has urged the state governments to devolve necessary functions, funds and functionaries to the urban local bodies so as to enable them to take up the challenges under smart cities initiative.