Smart Cities and Urban Mirages

Prime Minister Modi recently launched one of his pet programmes, namely setting up 100 “smart cities,” along with plans for upgrading 500 towns and cities (Atal Mission for Rejuvenation and Urban Transformation or AMRUT), and a pledge to provide housing for all by 2022, requiring around 20 million units by the 75th anniversary of Indian independence. A hundred “smart cities” was a signature pledge of his election campaign, an important part of his grand vision of development, and marking a departure from what were clearly considered the tired old slogans addressing poverty removal, instead projecting dreams of a prosperous, urban India. As the government’s Concept Note released in November 2014 puts it, “smart cities” are meant respond to increasing urban migration and to cater to the emerging “neo middle class… [and its] aspiration of better living standards.”

Taken together, these programmes with an outlay of around Rs.2 lakh crores ($33 billion) including contributions of the States, with eventual expenditure many times that amount if private sector investments are factored in, constitute perhaps the largest development initiative announced by the Modi government and attests to their importance for this government and its leadership. The massive investment in and push for urbanization as “an engine of economic growth” testifies to this government’s belief that future economic growth will come through urban development, especially of a certain kind as we shall see.

The new urbanization policy is therefore of great significance in that it not only embodies and conveys an urbanization-led development pathway but also a vision of what these new urban drivers of modernization and economic growth would be like. The “smart cities” programme sets out to delineate a specific model that other cities would aspire to, while requisite infrastructure would be laid in the 500 AMRUT cities to enable them to become smart cities sometime in the future. But what exactly is this vision of urbanization-led growth, and would the so-called smart cities help to actualize this vision? What kind of development can one foresee and who would benefit from it?

Urbanization-led development

The government’s Concept Note on Smart Cities released last November states that had earlier governments realized the potential of urban centres as “engines of growth” 20 years ago, India would have been a developed country by now. The Note begins by emphasizing the well-known correlation between increasing rates of urbanization and GDP growth. Observing that India’s urban areas already contribute around 60 percent of GDP with only around 31 percent of population, the Concept Note projects the urban share of GDP to rise to around 75 percent over the next 15 years.

However, correlation is not causation. The Modi government seems to believe in urbanization as an end in itself. Other policy directions such as on land acquisition, further suggest that the Modi government has in fact turned its back on agriculture and India’s rural areas. This might be an over-reading of policy signals, but is perhaps not unjustified. In debates on land acquisition, almost all government and ruling party spokespersons have vigorously argued that the policy was pro-farmer precisely because farming was no longer remunerative, that farmers want to give up agriculture and hence would welcome offers to buy their lands for non-agricultural development and get rid of this burden. If contribution of agriculture to GDP is lagging so far behind, would it not make sense to look at agricultural policies too? Similarly, if rural people migrate to urban areas in large numbers, can drivers of this migration not be addressed in rural areas themselves? It is important to remember that, even with all the projections of rapid urbanization in India, around 50 percent of India’s population is still expected to live in rural areas in 2050! There are many complex issues of income and job creation especially in the non-farm sector, physical and social infrastructure in rural areas, environment and climate change, that require to be addressed when discussing urbanization which cannot be seen as unambiguously beneficial.

Urbanization does not by itself drive growth, but accelerates on the back of industrialization and growth of related services in and around urban areas, and can in turn further spur growth. Urbanization is also spurred on by poverty and dearth of opportunities in rural areas, a major reason for high rates of urbanization in Africa and Latin America. Urban areas drive up social and economic indicators because of concentration of economic activity and social infrastructure, but are also the arena of high inequality, in fact higher than in rural areas, with the rural poor forced to live in sub-standard conditions. As the 2014 UN Report on World Urbanization Prospects notes, rapid and unplanned urbanization has in fact led to “urban sprawl, high levels of pollution and environmental degradation, together with unsustainable patterns of production and consumption patterns,” thus compelling a global agenda to forge new models of urbanization “that integrates all facets of sustainable development, to promote equity, welfare and shared prosperity in an urbanizing world development.”

The Modi government’s new urbanization models need to be examined in this light.

Elitist Smart Cities The reason this article has so far put the term “smart cities” within quotes is because the term is used very differently in different contexts. Certainly in the Modi government programme, “smart cities” are at considerable variance with what the term usually conveys in other, mostly developed country, contexts. In normal usage, smart cities are those which already have fairly good if not advanced infrastructure and which then want to apply information and communication technologies (ICT) to enhance efficiency of resource use especially energy and water, improve delivery of civic services, optimize transportation, enhance quality of education and health services, and promote more active engagement of citizens with urban governance.

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In this sense, as its Concept Note itself makes clear, the Modi government’s use of the term “smart city” is clearly an over-reach. However, perhaps one need not quibble over terminology but take at face value the notion that the concept is shaped by the developing country context in India. The idea is of cities that provide a range of economic activities and employment opportunities, ostensibly to all classes of people, but with a clear emphasis on “investors and professionals,” and provide them with “a very high quality of life (comparable with any developed European city)” (emphasis in original), 24×7 electricity and quality water supply and recycling, clean air, quality education, health care, entertainment and sports facilities, dependable security, high speed interconnectivity, fast and efficient urban mobility. While the hallmark of such “smart cities” would be their “simple and transparent on-line business and public services that make it easy to establish a business and run it efficiently without any bureaucratic hassles.” Thankfully there is acceptance that skilled labour too would be required but, other than that, the “smart cities” would appear to be residential and commercial islands for professionals and industrialists with some essential workers and service providers.

One “smart city” almost ready in India, initiated when PM Modi was Chief Minister of Gujarat, is a greenfield development located between Ahmedabad and Gandhinagar, and is a commercial business centre visualized as a global financial services hub with “state of the art” communications, infrastructure and transport links to the main city, with 8.5 sq.m. built-up space over an area of 3.5 sq.km. Another example is a greenfield township in Ghaziabad called Wave City being built by a real estate developer in partnership with IBM.

This elitist orientation of the envisaged “smart cities” is also evident from the other facilities planned. While high quality education and health services are spoken of, it is clear that much of these are expected to be in the private sector, including for instance a 50-100 acre “medi city” in each “smart city” for tertiary health care. All services are expected to be provided by private entities operating on full cost recovery including capital costs, although some mechanism would be adopted to ensure affordability for the urban poor, and all projects would first be offered to PPP operators.

The Concept Note also speaks of “transit-oriented development, good public transport integrated with sound infrastructure for motorized and non-motorized vehicles and pedestrians. Emphasis is placed on water supply and sanitation including recycling or urban solid waste and waste-water. More importantly perhaps, there is mention of integrated planning and oversight rather than the usual governmental pattern of working in silos. There are other dreams too, such as specially-funded business incubators which would catalyze annually 1000 start-ups each generating 1000 jobs, with a lot of emphasis seemingly being placed on financial services. Some of the infrastructure ideas night appear to be too good to be true, although they may conceivably be visualized in greenfield “smart cities,” but it is difficult to see this being operationalized in the chaotic environment of existing cities especially Tier-2 and Tier-3 cities, of which there will be many in the finally list of 100 selected.

Some commentators have also pointed to the less than fair distribution of the 100 “smart cities” between States. Bihar (3) and West Bengal (4), between them having 16 percent of the population, have been allotted only 7. Punjab has far higher share of both AMRUT and “smart” cities, while Kerala, Jharkhand and Assam with higher populations have only 1 each. NDA-ruled states have been clear gainers, continuing the not-so-smart old practice of politics guiding development choices!

Against best practices

Of the 100 “smart cities” envisaged, the programme intends to select 1 satellite city in each of the 9 mega-cities with population of more than 4 million, around 35 of the 44 cities with population between 1 and 4 million, all State/UT capitals, 10 cities of religious or tourist importance, and 25 cities in the 0.25-1 million population category, making sure that hill and coastal regions are also represented. Whereas the government has been making much of giving States a lead role in the process of selection and project formulation, it is apparent that the Centre will be the main if not sole arbiter, giving short shrift to decentralization of decision-making to Urban Local Bodies (ULBs) which is considered to be the cornerstone of modern urban development worldwide and which lies behind the many success stories whether in the oft-cited case of Chinese cities or the smart cities of Barcelona, Singapore, Seoul or Yokohoma.

Funding too is somewhat curiously structured. Although the “smart cities” as envisaged are necessarily infrastructure heavy, the plan envisages that most infrastructure will be taken up either through private investment or through PPPs, which the State governments and concerned urban local bodies (ULBs) will raise, with the Central Government’s contributions being chiefly in the form of Viability Gap Support. This despite the fact that the PPP models in urban infrastructure have been a notable failure in India. Not only are the ULBs burdened with this onerous responsibility, there is also little or no empowerment, capacity building and decentralization of responsibility to ULBs, since all “smart cities” Projects will be implemented by special purpose vehicles (SPVs).

Many urban planners and scholars have long warned of over-planning of cities. They have pointed to the growth of informal housing (usually called slums) and unorganized industries (usually unregulated and often considered non-legal) as not being “violations” of some planned ideal, but as integral elements of mainstream economic activity and an organic part of urbanization processes. Formal industrial estates and even proper house ownership (rather than tenancy in social housing) constitute huge entry barriers for the urban poor and for recent migrants to cities. Failure to provide for these will lead to exclusion of the poor or their relegation to urban outskirts and margins, or will inevitably pave the way for creeping slums and informal settlements. This is a major reason why participatory planning processes that allow for a combination of formal planning and space for interplay with informal processes have now become part of international best practices in inclusive and sustainable urban planning.

Limitations of space do not allow for a detailed examination of the AMRUT scheme and the “housing for all” programme, but some notings could be made here.

The AMRUT programme is only a slightly re-jigged version of the former Jawaharlal Nehru National Urban Renewal Mission (JNNURM) which it replaces and which is almost universally recognized as a failure in most respects, certainly compared to the ambitions with which it was framed and launched. AMRUT cities and towns would be upgraded with basic infrastructure and “smart” features that would enable them to become “smart cities” in future, so the vision is common to both the urbanization programmes.

In JNNURM too cities used “smart” technologies and GIS systems to plan their interventions, but these inputs did not translate into “smart” interventions. Many cities drew up intervention plans highlighting mass transit and non-motorized transport, but almost all the Mission cities ended up building infrastructure favouring private vehicles and discouraging pedestrians. Research points to almost 80 percent of JNNURM funds having been spent on flyovers and widening of roads. JNNURM was based on a scheme pushed by USAID and UK DFID for “reforms” of ULBs which too has not happened. Jawaharlal Nehru morphing into Atal Behari Vajpayee will not make miracles happen. Nor will throwing money at the problem.

Cities and towns in India are indeed badly in need of intervention, improved infrastructure and services, greater sustainability and equity. Processes of urbanization too require far more serious study than hitherto, and call for more thoughtful intervention in both urban and rural areas in industrialization, services, physical and social infrastructure, and agriculture. Development pathways in India require smart thinking, not necessarily “smart cities,” certainly not of the kind now envisaged.