smart cities

The term “Smart City" was coined in the initial days of the 21st century. It implements user-friendly information and communication technologies developed by major industries for urban spaces. Its meaning has, since, been expanded to relate to the longer-term planning of cities and their development.

The UN projects that the share of the world’s population living in urban areas will increase to almost 68% by 2050 from 55% currently. This rapid urbanization increases the danger of temperature change and ties up in large cities. Heatwaves – increasingly a reality thanks to global climate change – are worse in large cities where skyscrapers, cars, and paved roads trap the warmth. Additionally, megacities face unique challenges in managing pandemics which the world has recently experienced.

Cities must therefore become smarter if they need to manage urban growth, public health, and also the challenges that include it effectively. Intelligent decisions must be taken at the strategic level. It takes over individual projects and wishes careful decisions on long-term implementations.

Around the world, city planners and residents use data-driven technologies, like the Internet of Things (IoT) and AI, to enhance traffic flows, building design likewise as waste and water systems in “smart cities.” MarketsandMarkets, a worldwide research firm, estimates that the industry of smart building technologies will rise from $61 bn in 2019 to $106 bn by 2024.

The Ministry of Housing and Urban Affairs is the nodal ministry for all policies and funding schemes related to urban development initiatives in the country. The states and cities are responsible for the discharge of the urban functions.

Key aspects that will influence the urban opportunities in India:

  • Cities contribute about 63% of the GDP and will lead the revival of Indian economy like never before; this is expected to increase to 70% by 2030.
  • Cities will accommodate about 60% of our population and will generate 70% of the new jobs.
  • Indian cities are at different stages of development and are following different paradigms - traditional, modern, and post-modern, needing a 3-level strategy.
  • High-powered empowered committee estimates urban infrastructure investment need at about $40 bn per annum, over a period of 20 years.
  • National Infrastructure Pipeline, developed by the Government of India, has envisaged an expenditure of $1,500 bn in the next five years; the urban infrastructure projects constitute a significant $250 bn.
  • Under our major infrastructure programs and missions, we have invested close to $30 bn in the last 5 years.
  • India’s Smart Cities Mission is focussed on developing 100 cities on the “smart cities principle” - of using digital technology to improve the urban infrastructure and services.

India has over 4000 urban local bodies and towns, and the opportunities are across core dimensions – housing, sanitation and cleanliness, livelihood, IT, health and education, transport, and environment, and so on. Some of the basic components of a smart city include integrated command and control centre, smart roads and street lighting, smart water systems, security & surveillance systems, etc.

Huge investment potential exists in the field of urban infrastructure such as metro, rapid rail, buses, electric vehicles, etc. Development and production of various metro components like rolling stock, telecommunication, signalling, electrical & mechanical systems could bring in significant investments.

Even among the 100 smart cities, India has diversity in terms of size, population, economy, vision, development model, and intangibles.

The program promotes equity by design. We see potential not only in big cities like Bengaluru, Ahmedabad, Pune, Chennai but also in smaller towns (with political, heritage, or tourism significance) like Namchi, Dharmsala, Satna, and Bihar Sharif.

Hence these cities have chosen their development models which are a combination of retrofit, redevelopment, and greenfield development.

Under the Smart Cities Mission, over 5000 projects worth more than $30 bn were identified in these 100 smart cities. It is noteworthy that 1,809 projects worth over $4 bn have been completed.

To ease the life of its citizens, smart cities have been evolving and progressing into large-scale, ambitious urban expansion projects making technology an integral part of the city's ecosystem.  As technology advances, the concept of smart city has also evolved from merely incorporating technology to becoming futuristic demonstrations of cutting-edge technology themselves.

The vision behind India's smart cities of building a green, sustainable and resilient futuristic infrastructure is one of its kind. In other words, what India is building today, the world will follow tomorrow.

We are India's national investment facilitation agency.


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