Reforms to Accelerate the Development of India’s Smart Cities: Shaping the Future of Urban Development & Services

Industry AgendaReforms to Accelerate the Development of India’s Smart CitiesShaping the Future of Urban Development & ServicesApril 2016 Contents3 Foreword4 Executive Summary6 1. Urbanization in India7 1.1. Emerging urban landscape in India7 1.2. India’s earlier responses to urbanization7 1.3. Challenges in urban India10 1.4. Urban development initiatives10 1.4.1. Smart cities programme11 1.4.2. AMRUT programme11 1.4.3. Other urban development programmes12 1.5. Opportunities for private-sector participation15 2. Challenges in Urban Transformation15 2.1. Institutional challenges16 2.2. Challenges in the business environment18 2.3. Sector-specific business challenges19 2.4. Risks in public-private partnerships21 3. Recommendations for Accelerating Urban Rejuvenation Programmes21 3.1. Institutional reforms25 3.2. Business environment reforms31 3.3. Sector-specific recommendations32 3.4. Private-sector action items38 3.5. State Specific Action Items40 4. Way Forward42 Endnotes44 AcknowledgementsWorld Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744Email: contact@weforum.orgwww.weforum.org World Economic Forum® © 2016 – All rights reserved. No part of this publication may be reproduced orTransmitted in any form or by any means, includingPhotocopying and recording, or by any informationStorage and retrieval system. REF 110316In collaboration with PwC 3Reforms to Accelerate the Development of India’s Smart Cities - Shaping the Future of Urban Development & Services InitiativeForeword Chief Minister of Maharashtra It is said that economic growth and urbanisation are correlated. Economic growth highly influences urbanisation. While in turn urbanisation affects the rate at which economy grows. Growing urbanisation brings with it challenges of providing adequate land, water, food, better infrastructure, employment opportunities and of course, better living standards. The inadequacies of any of these resources result in insufficient and faulty management of cities. Therefore, cities are said to be engines of economic development of the nation.Today, 31 % of India’s population resides in urban areas contributing 63 % of national GDP. It is expected that by the year 2030, 40 % of India’s population will be living in urban areas and will contribute 75% of national GDP. Considering these facts comprehensive development of physical, institutional, social and economic infrastructure become necessary. All these are important to improve the standard of living and attract people and investments to cities. Development of smart cities is the first step in that direction.The object of the Smart City Mission is to provide core infrastructure and quality life to its citizen with clean and sustainable environment and application of smart solutions. The Government of India’s urban rejuvenation programme, 100 smart cities and 500 AMRUT cities will only serve to stimulate the existing urban development efforts.Maharashtra is the most urbanised State of the country. Approximately 50 % of its population resides in cities creating huge demands on the existing infrastructure. Therefore, we have to develop better scientific tools to improve city planning with sensitivity to local ecology and heritage and reduce demand for transportation, improve mobility and reduce congestion. For this, we need sound policies to achieve these goals. We welcome the private sector’s participation in urban development and consider their contribution pivotal in the State’s achievements. We welcome the recommendations suggested by the World Economic Forum and will consider those that relate to strengthening urban local bodies and the development of better business environment. Considering the past experiences the State has already initiated a War Room to accelerate strategic urban infrastructure projects. Further, the State is focused on reforming the power sector, which will be critical to urban development and building world class cities. I believe that this new found approach to delivering projects, coupled with business reforms will accelerate the initiation of Smart Cities in Maharashtra.Chief Minister of Andhra Pradesh India is at crossroads in its journey towards becoming a developed nation, and cities will play a pivotal role in improving the socio-economic standing on India. The Government’s recently announced schemes such as 100 Smart Cities, 500 AMRUT cities, Digital India, Make in India and Skill India - when converged together - provide a framework which sets the development agenda for the country.Our focus on building smart cities is prudent and timely. The State of Andhra Pradesh has taken the lead towards the implementation of these programs - as showcased by the selection of two cities (Visakhapatnam and Kakinada) among the top twenty smart cities in India. In order for the state to develop its urban core, strong public-private collaboration will be require