One of the major plans of Prime Minister Narendra Modi to accelerate India’s economic and social growth was the Smart Cities Mission. It is considered one of his flagship programmes with the focus on urban renewal that also envisaged a retrofitting programme.
The mission was to develop 109 cities across the country transforming cities and towns into citizen-focussed, eco-friendly and sustainable centres. The task comes under the Union Ministry of Urban Development which will implement the programmes in collaboration with state governments.
The proposal is to develop an area within 100 cities as models based on an area development plan, which is expected have a rub-off effect on other parts of the city and nearby cities and towns. There will be development of core infrastructure, provide a decent quality of life to citizens and clean and sustainable environment.
For a change in government perspective on selection of cities, it was decided to select cities through nation-wide competition. As of now 90 cities have been selected to be upgraded as part of the Smart Cities Mission.
The five-year programme also proposes financial assistance from the central government which is also setting up deadlines for completing the modernisation of areas coming under the projects. It is expected that the mission will start showing positive results from 2022 on wards.
Each city will have a corporate entity to be headed by a full-time CEO to implement the Smart Cities Mission. The execution of projects may be done through joint ventures, subsidiaries, public-private partnership (PPP), turnkey contracts, etc suitably dovetailed with revenue streams.
The central and state governments would provide Rs 10bn in funding to such companies that are expected to raise additional resources from the open financial market as debt or equity. In such mission mode, when the cities are developed or renewed, it will have an impact on the realty sector as well.
When smart cities are completed it will create a modern infrastructural network that would attract people to seek out housing in these areas thereby boosting the realty market. Analysts say that high-quality living and business environment will encourage private enterprises to develop better world-class residential and commercial developments.
Smart cities will not only improve the quality of life, but also create more jobs facilitating economic development and thus, more investment in real estate. It will also jump start a pooling of capital from private enterprises and developers in real estate, towards joint ventures within the smart cities.
Thanks to the enactment of Real Estate Regulatory Authority (RERA) Act, 2016, smart cities will have simple and transparent real estate transactions resulting in fewer cases of corruption and cleaner dealings in real estate.
Under smart city mission, land and capital for the development of more affordable housing options will be available. This will bring homes within the reach of lower income groups, who will create more demand and energize the real estate market.