India exploring smart cities' part funding by World Bank

The World Bank is in talks with the Indian government to provide some initial funding for its smart cities programme and the Amrut initiative for urban revitalisation.

"The World Bank is in discussions with the (India) government to provide some funding in the initial stages for the smart cities and Amrut programmes," the bank's country director Onno Ruhl told reporters here on Thursday. Amrut is an acronym of Atal Mission for Rejuvenation and Urban Transformation.

Ruhl was speaking at the launch of a World Bank report on urbanisation, titled "Leveraging Urbanisation in South Asia: Managing Spatial Transformation for Prosperity and Livability", released by visiting World Bank managing director and chief operations officer Sri Mulyani Indrawati.

"India's urbanisation drive will be the biggest of its kind in the next 30 years. The government's implementation of the 14th Finance Commission recommendations will help in devolving finances to states for the programme," Ruhl said.

The report says South Asia's urban population grew by 130 million between 2000-11, and is poised to rise by almost 250 million by 2030.

"Cities in South Asia are not fulfilling their potential or transforming their economies, putting enormous demands on their infrastructure, as in Mumbai which I just visited," Indrawati said.

"The World Bank can help by citing examples of cities dealing successfully with various issues, to provide clarity and accountability," she added.

The report says policymakers must address three "fundamental urban governance deficits" by way of empowerment of urban governments, providing them adequate resources and strengthening mechanisms to hold them accountable.

As per government estimates, as much as Rs.400,000 crore will be invested in smart cities initiative, mainly through the private sector and loans from multilateral institutions and other agencies.

A finance ministry source told IANS here that the central government is set to approach the World Bank and the Asian Development Bank (ADB) for loans of 500 million pounds and 1 billion pounds respectively for a five-year period up to 2020.

The World Bank and other agencies like the ADB and the Japan International Cooperation Agency will also provide technical assistance to the cities in preparation for their smart city plans.

To implement such plan, every city is expected to set up a special purpose vehicle in which the state and the municipal body will have a major stake in 50:50 proportion.

Cities have also been told to consider the 14th Finance Commission's recommendation of incrementally increasing taxes such property tax and professional tax.

Indrawati gave the example of Nigeria's capital city Lagos, where the elected mayor had entered into a "pact" with citizens on providing "services in return for taxes".

She said the examples of urban planning worth emulating had three essential components of a long-term vision, detailed planning and an inclusion character that involved all sectors and communities.