IT industry keen on smart cities but remain cautious: Nasscom

Estimates that there might be business opportunity to the tune of $30-40 billion

Although companies are excited to invest in the Centre’s ambitious 100 smart cities project, their experience of working with the government is making them cautious, said Nasscom. The information technology (IT) sector body has estimated that it offers a business opportunity of $30-40 billion for the sector over the next five to 10 years.

One of the biggest concerns of the sector has been delayed or stuck payments in various e-governance contracts. Since crores of rupees are stuck in such disputes, it has led to a situation where industry’s participation in various e-governance projects has seen a steady decline, with several large ones resulting in a no-bid situation.

Nasscom President R Chandrashekhar added the Union Budget had given the sector some hope in terms of proposing a Public Procurement Dispute Resolution Bill to address contractual disputes related to government projects. However, they’re still waiting to see any movement on that front.

“The government can’t just wish these issues away, especially in the context of an industry which has access to a lot of market opportunities across the globe,” said Chandrashekhar, who was the government’s telecom and IT secretary in the past. There is a lot of excitement among companies but some of these issues need to be addressed first, he added.

Under the programme, approved by the Union Cabinet last month, each selected city will get central assistance of Rs 100 crore annually for five years. The government has earmarked Rs 48,000 crore for development of smart cities.    

Nasscom’s estimate is based on the assumption that about 15 per cent of the outlays on smart cities would be for the ICT component.

The association has also built a framework, which can be a “ready reckoner” for the government as well as the companies looking to tap into this opportunity.

Nasscom said ICT framework suggested by it will address the unique challenges faced by Indian cities and provide an integrated perspective across the key pillars of physical infrastructure, social infrastructure, environmental and institutional (governance).