Seven ways to make India's smart cities smarter and more efficient

Indian policymakers have been striving to attract investment in manufacturing over decades. However, the share of manufacturing in gross domestic product (GDP), at 16-18 per cent, is a far cry from expectations that it would touch 25 per cent around India@75. A few high-profile investment announcements recently in electronics, chip making, batteries, et al have received attention. But overall, the requirements of a significant uptick in manufacturing investments remain an ongoing policy challenge.
 

Over the past few years, the government has tried a variety of interventions, such as the PLI (production-linked incentive) scheme, National Logistics Policy, Gati Shakti, Cluster Development, Industrial Corridors, ease of doing business, and capital

subsidies for investment to come in. Now, further to these attempts, the announcement about developing 12 industrial smart cities (ISCs) comes as a turbo-charger. The Cabinet Committee on Economic Affairs, on August 27, cleared public investment of Rs 28,602 crore to develop 12 ISCs in six major industrial corridors across 10 states. The locations are:
 

l Five cities along the Amritsar-Kolkata Industrial Corridor: (Rajpura-Patiala in Punjab, Khurpia in Uttarakhand, Agra and Prayagraj in Uttar Pradesh, and Gaya in Bihar).
 

l Two cities along the Delhi-Mumbai industrial corridor: (Jodhpur-Pali in Rajasthan and Dighi in Maharashtra).
 

l Four in the Industrial Corridors of Vizag-Chennai, Hyderabad-Bengaluru, Hyderabad-Nagpur, and Chennai-Bengaluru (Kopparthy and Orvakal in Andhra Pradesh, Zaheerabad in Telangana, and Palakkad in Kerala).
 

The name of one more city has not yet been revealed on account of the model code of conduct in force currently.
 

There is no doubt that efforts of this nature provide a strong signal of the government’s continuing and committed efforts to bolster manufacturing investment. But it needs emphasis that availability of industrial locations is a necessary but not a sufficient condition. And so, it is in the context of providing a far superior enabling ecosystem that these 12 new destinations should seek to pack in more punch than hitherto available destinations.
 

Here are seven suggestions that pack in more punch.
 

Plug and play: A “plug and play” environment replete with all the procedural relaxations associated with “ease of doing business” would be essential. Each location must create facilitation centres, which demonstrate practically the reforms that keep getting announced from the power portals of New Delhi.
 

Social infrastructure: For too long, the “social” needs of employees and their families have been neglected in industrial estates. A parallel plan to incentivise setting up schools, hospitals, parklands, retail, leisure and entertainment facilities should be an integral part of a holistically planned development agenda.
 

Smart utilities: “Smart” industrial cities built in the middle of the 21st century must necessarily incorporate “smart utilities”. These include circularity in liquid and solid waste management as well as the full complement of green energy, and ICT technologies available.
 

Integration and convergence: This will mean the existing policies for the National Single Window System, One District One Product, Sagarmala, AMRUT, Smart Cities, Swachh Bharat, Jal Shakti, Awas Yojana, Skill Development Centres, the revised SEZ (special economic zone) scheme, Challenge Fund for Cities and other energy, and telecom and public transport schemes must all converge seamlessly. Multi-modalism and inland container depots too need inclusion.
 

Learning from past initiatives: The first generation of seven Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) industrial destinations like Dholera and Shendra-Bidkin have yet to develop to their full potential. These projects have faced issues related to land acquisition and rehabilitation, delays in infrastructure development, and lack of coordination among multiple stakeholders.
 

Attract private capital as co-developers: The Rs 28,602 crore central allocation averages around Rs 2,400 crore per location. It is understood that state governments are to provide land and also their share of capital expenditure (capex). But all this together will just about cover the capex of external development charges. So, creative PPP (public-private partnership) formats must be structured to draw in private capital in core, supporting and social infrastructure development, and even O&M (operations and maintenance). The interest of some countries to participate as co-developers should be seriously pursued.
 

Coastal economic zones (CEZ): To boost India’s manufacturing competitiveness with a view to exporting, the big unaddressed idea is still that of CEZs. Back in 2015, Arvind Panagariya, then heading the NITI Aayog, advocated the bold idea of setting up massive CEZs exemplified by Chinese examples, structured as free trade zones, much like what GIFT City in Ahmedabad is for the financial sector. These CEZs, with a hassle-free regulatory environment, were to be the springboard for India’s massive leap into labour-intensive, value-added exports. It is still not too late to pursue this suggestion.
 

India has a long history of trying to attract manufacturing investment by creating specialised enclaves. The socialist era saw industrial estates sprouting in almost every state, many of them decrepit and fallow today. This was followed by cluster development efforts and smart cities. The private sector then was motivated to come in and the likes of Mahindra and Sricity industrial enclaves do stand out as notable successes. The DMICDC attempted seven new locations. The SEZ movement created a significant buzz, and unfortunately petered out and produced the still born DESH (Development of Enterprise and Service Hubs) Bill, 2023. And now we have these 12 ISCs.
 

Overall, these 12 ISCs should be given priority by both the central and state governments. But they must be seen to be markedly different from earlier attempts.

They must strive to pack more punch.

The writer is founder and managing trustee of  The Infravision Foundation (TIF) and chairman of  the Confederation of Indian Industry’s National Council  on Infrastructure. He would like to acknowledge inputs from Jagan Shah, CEO, TIF