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Are India's smart cities too ambitious?

India's plan to build 100 smart cities by 2022 has drawn support from the likes of France and the United States, but urban policy experts are pessimistic about the project's scope and plausibility.

The bold commitment, announced just months after Modi's election victory in May 2014, aims to transform India's developing satellite cities and major urban centers from "a reflection of poverty and bottlenecks" to "symbols of efficiency, speed and scale."

The project aims to accommodate India's swelling urban population - one of the fastest growing in the world - increase employment and attract foreign direct investment.

How ‘smart’ will these cities be?

"Smart city" remains loosely-defined in India and around the world, but many say the adoption of technology is a crucial element. Ambitious initiatives to build "smarter" cities include the use of data and digital infrastructure to manage energy and water usage to the creation of intelligent transport networks, according to a Brookings report earlier this year.

However, India will likely focus on fixing the lack of basic amenities and infrastructure such as housing, water supply, sanitation, and electricity in existing urban regions.

"A large part of this initiative is just to get the existing cities working in a more efficient way," said Nicholas Holt, Asia Pacific head of research at Knight Frank. He noted that at least 50 of the 100 planned smart cities will be brownfield - existing cities.

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Cyberabad, located on the outskirts of Hyderabad, is an example of a brownfield smart city in progress. Jayesh Ranjan, managing director of the Telangana State Industrial Infrastructure Corporation (TSIIC), describes the area's retrofitting program in a March article: converting large buildings into green, energy-efficient, and zero-waste units; promoting the idea of cycling to work and implementing a water conservation strategy.

"These interventions can be considered low-hanging fruits in the sphere of smart cities. There is no use of sophisticated technology in any of them," Ranjan writes. This retrofitting model is "symptomatic of what lies ahead when full-scale Brownfield smart cities development will be undertaken," he adds.

Allahabad, India
Sanjay Kanojia | AFP | Getty Images
Allahabad, India

Technology is expected to play a much larger role in greenfield cities - new towns built from scratch, said Holt.

Funding issues

Modi's Bharatiya Janata Party-led government allocated $962 million towards smart cities in its federal budget for the year starting in April, but the entire project could require $2 trillion, TechSci Research warned in a report earlier this month.

To fill the gap, Modi has sought international aid through a diplomatic charm offensive. This week, France announced a $1 billion investment towards the development of three smart cities, including Pondicherry and Nagpur. Private corporations are also expected to pitch in but there are pitfalls, analysts warn.

"It's going to be a confluence of both public and private investment. That could be one of the challenges because private companies will be working with the central, state and local governments," warned Holt of Knight Frank.

The government must create a stable policy framework for private investment, said an April report by Accenture Strategy and the World Economic Forum.

"A key component of this is for the government to develop a strong investor value proposition on a project-by-project basis. The government should not expect investors to accept a lower return simply because a project has significant social benefit."