Smart Economics for Smart Cities

In less than 0.75 seconds, Google results show the definition of a smart city as a municipality that uses Information and Communication Technologies (ICT) to increase operational efficiency, share information with the public and improve both the quality of government services and citizen welfare. In simpler terms, a smart city needs intelligent solutions.

Smart cities are not only the way to look at our future; it is the future. 

The need for such high-tech urban spaces is due to the unprecedented population pressures and lack of adequate infrastructure systems. But with advancing Information and Communication Technology (ICT), we can realize a substantial amount of technological potential to keep our cities liveable, improving the quality of life. Although the characteristics of a smart city may differ across cities globally, the primary component remains that of urban planning, mobility and transport, smart healthcare, waste management, safety and security, governance and civic participation, and sustainability.

The North American and Asian cities have rolled out the implementation of smart applications.A Global Smart Cities Alliancewas formed by the G20, with India as a participant, as of 2019. The Smart City Mission was launched by the Government of India to design the development of smart solutions for cities across the country, creating a sustainable environment and providing quality life to its citizens. It includes developing the core infrastructure elements, ensuring adequate water supply, electricity, sanitation, proper solid waste management, efficient urban mobility, affordable housing, good governance, safety and security, accessible healthcare, and education.

The establishment of a smart city will facilitate rapid economic development. Digital transformation with AI-based and IoT technologies will bring efficiency in resource allocation, cutting costs enormously. Every device will be linked, improving connectivity. Sustainability will increase as emissions reduce, cities become cleaner. Even elements of smart transportation, such as electric vehicles, will reduce traffic congestion and pollution. The concept of green buildings will save resources. Solar energy harnessed to generate electricity will make buildings sustainable.

Even in case of a disaster, it will reduce mitigation risks and ensure safety. The quality of life becomes better; citizens will be happier and satisfied. It does attract more skilled people and leads to an overall rise in the Gross Domestic Product (GDP).

On the other hand, real-time data empowers municipal governments to plan for the future, allocate resources wisely, and exercise wise decisions. Transparency in information helps administrators make informed choices. The cities provide entrepreneurs with a larger digital space to do business productively. However, in the short-run, it might even disrupt some industries due to a sudden shift in technology. 

Even customers, forced to rethink their choices, shift to smarter products following a market re-evaluation. It leads to the emergence of a new global value chain within global markets. Financial models are changing continually, so are the required competencies from an employee. Civic participation has also become a crucial factor in shaping the overall functioning of the city.

Currently, there are one hundred Smart Cities rolled out by the Government of India, and it further aims to form a cluster of 4,000 inclusive cities across the country. But with this ambition, the government might face a lot of challenges too.

Financing might be an issue, coupled with a lack of coordination between the center and the state. There is a need to ensure proper regulation and plan for the development of the economy. In the Indian context, several financial institutions that funded these projects contributed to the creation of non-performing assets and did more harm than help. On top of that, corruption is at the center of the ineffective execution of these projects.

As per anticipations drawn from the Smart City Proposals, the Smart City Mission follows a comprehensive approach in this regard. Each city municipality, to start with, has to engage a consultant who prepares a detailed plan of land-use, making existing establishments sustainable, and allocating resources optimally to achieve the former. Next, the city submits its proposal along with a budget to the government, that yields its approval. The competitive nature of this approach has had four such rounds of selection to identify Smart Cities since 2015. It also has leveraged a public-private partnership model for efficient planning. 

But the implementation of such Area-Based Development (ABD) projects within the selected smart cities is not as efficient as its planning.

The Town and Country Planning Organisation (TCPO), the technical wing of the Ministry of Urban Development, plays an imperative role as the planner in this arrangement. With the vision to create an economically vibrant and sustained urban habitat, it is responsible for evaluating the efficient subdivision of land, integrated with transportation, and formulating policies for a systematic urban renewal, mainly using Geographic Information System (GIS) mapping. 

The landscape of cities earlier was driven by the creation of new establishments. However, with rapid urbanization and exploitation of land, the proposition has now shifted to make the existing establishments spacious and sustainable. It is only possible with the involvement of local subdivisions of urban areas and increased accountability within institutions. 

Yet we are not even well-equipped with skilled labor and highly advanced technology to implement a full-fledged smart city project on our own. Many initiatives have still seen the light of the day by the joint efforts of the government and several private parties. The Smart Card initiated by Axis Bank and Raipur Smart City Limited is one such case. Another is the rollout of the National Transport Card announced during the Union Budget of 2019. Several other such models will follow if there is the stakeholders come together to accomplish this project.