Indian Economy News

Narendra Modi launches smart city, housing, urban renewal schemes

New Delhi: Prime Minister Narendra Modi on Thursday launched three government flagship schemes aimed to change the face of urban India—Smart Cities mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All mission—with an expected expenditure of around Rs.4 trillion over the next few years.

Given the multiplier potential of construction, the schemes will also help create jobs and give a fillip to the economy.

The Housing for All scheme or Pradhan Mantri Awas Yojana that aims to provide at least 20 million homes to people belonging to the economically weaker sections and lower income categories over the next seven years is expected to cost around Rs.3 trillion. The Smart City and AMRUT projects are expected to cost the central government Rs.48,000 crore and Rs.50,000 crore, respectively, over the next five years.

The three schemes aim to fulfil the needs of around 40% of India’s population, Modi said, adding India’s poor can’t be left to their fate.

“We are sitting together to discuss how to improve life in cities. Had we recognized the importance of urbanisation 25-30 years back, we would have been at par with developed countries and cities. But better late than never. Crying over what could have been would not help us,” he said at the launch.

The Prime Minister said every person dreams of having his or her own home but a home is not just about having a roof and four walls. “Once a person owns his home, he starts dreaming about decorating it, for which he starts working harder. A house results in self motivation,” Modi explained.

Taking a dig at his detractors, he said he will be criticised if people do not get homes, but that does not bother him.

He said the decision to make cities smart will be taken by people themselves and not the government. “People are wondering about what exactly Smart City would be. Smart city is a city that provides more than what a citizen expects. Before he wants it, we provide it,” Modi said.

The Prime Minister and urban development minister M. Venkaiah Naidu, who was also present on the occasion, stated that they consulted a range of stakeholders, including financial experts, for the schemes.

Modi also expressed hope that the real estate bill for protecting consumer rights would be passed in the Parliament’s monsoon session.
Guidelines for the three schemes were also released on the occasion.

The 100 smart cities will be selected on the basis of a city challenge competition. In the first stage, each state and Union Territory will give a score to their cities on the basis of four parameters, including existing service levels, institutional systems and capacities, self financing and past track records. States will nominate top cities based on the scores. The 100 cities will then prepare smart city plans, which will be evaluated again. The top 20 cities will be finally selected for funding in the first phase.

Under AMRUT, which replaces the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), funds will be allocated in view of the urban population and number of cities/towns in each state/UT. Without availability of land and all necessary clearances, no project shall be included in the mission. States shall transfer funds to urban local bodies within seven days of transfer by the central government and no diversion of funds will be allowed, failing which penal interest would be charged in addition to action by the centre.

Under the Pradhan Mantri Awas Yojana in urban areas, the selection will be based on the number of urban poor and slum dwellers. “Under Housing for All mission in urban areas, 2 crore households will be built. First right will be given to women,” said Naidu.

Municipal bodies see potential in the project. “This initiative is a great way of pushing our towns and cities forward. Now that the Prime Minister has released the guidelines, we can start preparing our towns,” said Madhu Bai Kinnar, mayor of Raigarh in Chhattisgarh.

Experts have also welcomed the launch of the three missions.

“We welcome the ambitious and audacious goal declared by the government today, of setting up 100 smart cities, rejuvenation of 500 cities and Housing for all, in addition to the existing initiatives of HRIDAY (Heritage Cities). They will provide critical urban infrastructure that is urgently required in order to make the economy efficient,” said Jaijit Bhattacharya, partner, KPMG.

“The process of building this urban infrastructure would lead to explosive growth in the economy as the execution of the vision would entail large-scale consumption of cement, metals, plastics, materials and services. It would also lead to innovation and creation of spin-off technologies that would surely make India a global player in building future cities,” he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.