Indian cities are set to get smarter and efficient.
In line with Prime Minister Narendra Modi's vision, finance minister Arun Jaitley announced an allocation of Rs. 7,060 for developing 100 smart cities across India.
As part of this ambitious project, the government will modernise existing mid-sized cities by introducing high technology-based interventions in the way they are managed. Information technology will be used as a tool for providing services such as efficient energy system, clean drinking water and sewage disposal.
That revving up India's decrepit urban infrastructure is a key focus of the Modi government is evident from the fact that the overall allocation for the sector has been hiked by a whopping 133% in 2014-15 budget. The urban development (UD) ministry has been allocated Rs. 17, 628 crore in 2014-15 as against Rs. 7,548 during 2013-14.
Announcing the government's initiative for the urban sector, which includes building 100 smart cities, Jaitley said, "A neo middle-class is emerging which has the aspiration of better living standards. Unless new cities are developed to accommodate the burgeoning number of people, the existing cities would soon become unlivable."
The UD ministry, which will be piloting the smart cities project on a mission mode, is already preparing its blueprint. The project will replace the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), another urban modernisation initiative launched by the previous UPA government in 2007.
To ensure smooth development of smart cities, Jaitley also announced the government's decision to liberalise the norms for foreign direct investment (FDI) in the real estate sector.
In a bid to bring in more foreign investors and help them develop projects in smaller cities, Jaitley announced the government's decision to not only reduce the minimum carpet area for construction to 20,000 square metre (sq mt) from the existing 50,000 sq mt but also to reduce the minimum capital to US $ 5 million from US$ 10 million with a three year post lock-in.
However, the foreign investor would not be able to exit for three years after project completion.
Also, giving a hard push to industrial smart cities coming up along the Delhi-Mumbai industrial corridor, Jaitley announced an initial corpus of Rs. 100 crore.