The 2017 edition of the One Globe Forum included several sessions that brought together top-level experts from diverse fields to discuss the future of smart cities. Yatish Rajawat, Chief Strategy Officer, LocalCircles, moderated a panel titled “Building Smarter Cities and Infrastructure”, and kicked off the discussion by asking how we can define the problem of urbanization.

In response, Raghav Chandra, former Chairman of the National Highway Authority of India and Secretary of the National Commission for Scheduled Tribes, said, “Urbanization… should be treated as an opportunity to bring in the best people and more investment into your city.” He highlighted two aspects of smart city infrastructure. One was related to business competitiveness – infrastructure such as highways, ports, airports, and power. The other was transactional infrastructure, such as the day-to-day requirements of management of city traffic and transport, water, solid waste management.

Effective Local Administration

Mr Rajawat noted that for the last six decades, cities were not recognized as an administrative entity, in the way that villages and states were. The lack of an effective local authority was a serious impediment.

Mr Chandra noted that in India’s case, the local administration – the municipal corporation – was often weak, with little ability to raise capital. Mr Rajawat added, “The most powerful person is the municipal commissioner, who comes in for two years and goes – there’s no continuity in management.”

India can learn from other countries’ experiences. As Mr Chandra noted, in the US and Canada, municipal corporations were fiscal entities in their own right, and raised money through bonds. Part of the plan under the smart cities program is to move towards the Special Purpose Vehicle (SPV) model, in which the SPV is responsible for everything, from collecting taxes to managing and monitoring plans.

In a Fireside Chat titled “Global Perspective on Smart Cities” with Aashish Kalra, Chairman of Cambridge Technology Enterprises, Sudhir Rajpal, Managing Director of the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) highlighted how his state was addressing precisely this problem in Gurugram (formerly Gurgaon). “We recently developed the Gurugram Development Authority (GDA), which has been given the mandate to stitch up the remaining pieces of infrastructure in the city,” he said. “The problem was that last-mile infrastructure, for some reason or other – court directive, encroachment – did not get developed. So you had long lines of sewers laid, for instance, which were not connected for 200 meters, and the whole effort was wasted. These issues are now entrusted to the GDA… One single agency has been created for developing infrastructure.”

Lessons from Other Countries

Also on the panel moderated by Mr Rajawat was Tamura Masayoshi, General Manager, Hitachi India, who has visited 28 states in his five years in India (Manipur being the sole exception), and 69 out of the 100 smart city sites. He cautioned that that although Japan had good technology, it could not just be copied in India, as the conditions, aspirations, and strengths of both countries were different.

Mr Tamura gave the example of the All India Institute of Medical Sciences (AIIMS), which is working together with Hitachi. “They get 10,000 new patients every day – 3 million new patients every year. It’s beyond my imagination,” he said. So compared to Japan, India needed a different scale of planning and execution, he noted.

Mr Rajawat said, “This kind of planning has never been done in any part of the world except possibly China.” Khurshed Gandhi, Managing Director, Cushman & Wakefield, noted that the idea of smart cities competing with each other had worked well in China – they had incentives and they planned their growth accordingly. But, he added, it worked there because there were not so many authorities. “In India there’s so much oversight and counter-governance that it slows things down, but that’s the wonder of being a democracy,” he added. He underscored the urgency to find ways that worked for India, and to learn to plan and implement quickly. “The urbanization rate in India is mindboggling,” he noted.

In his fireside chat, Mr Rajpal noted that Haryana had benefited from the competition between states to attract business, saying policy changes had elevated it from 14th position two years ago, to 6th position last year, in terms of ease of doing business. “The concept of ‘single roof’ that we’ve evolved in our state enables all new investments to get all clearances – land, pollution, labor department. The ‘regulatory cholesterol’ is being surgically removed,” he said.

Mr Kalra said, “It’s very innovative that your government is saying, ‘If you don’t hear from us in 45 days, the clearance is yours. So it’s reversed – you have clearance, and if the government has an objection or a question, it has 45 days to raise it.’” He noted that competitiveness had spurred investor interest in Haryana, citing the example of China’s Wanda Group, which signed an MoU late last year with the state government in what was “potentially the single largest transaction in India”.

Timeliness is Crucial

In a Keynote Session titled “Making Cities Smarter with Digital”, Gaurav Agarwal, Director – Public Sector, Cisco Systems India and SAARC, shared the concern about urgency. He said, “Urbanization is happening at a massive scale. Approximately 2 million people are getting added to Delhi every year… Cities will face urbanization challenges. They’ve got to become more efficient and smarter.”

On the smart cities panel, Mr Tamura highlighted another aspect of the need to act quickly. “As a businessman, I cannot wait for planning and execution over years – I need some revenues in this quarter,” he said. “It’s OK to talk about a big vision for smart cities. But for today’s issues, my approach is to make something smarter – just a little step up is fine, as long as it creates revenue. We are not an NGO, after all.”

Mr Tamura said, “I have been trying to combine the strengths of India and Japan. In India you have agility, flexibility, and a large body of talent, while Japan has punctual operation, quality – different sets of strengths.” He also said, “One of the reasons I enjoy living in India is jugaad – the approach to achieve something without requiring a big budget or expensive tools.” Japan was not good at jugaad, he added. Mr Rajawat questioned whether it could be of use in building smart cities. “I think so,” Mr Tamura said. “In a sense, yes… Why don’t we use it as one of the tools for building solutions?”

Fellow panelist Mr Gandhi highlighted yet another aspect of timing, besides speedy execution and the need to generate revenue. “Economic activity and infrastructure drive growth,” he noted. “For instance, in Bangalore, with the airport coming up in the north, activity is moving north. Infrastructure initiatives have to be timed with economic drivers.”

Where Should the Money Come From?

Moderating the panel session, Mr Rajawat turned the discussion to the topic of finance. “You can plan what you want. The delivery finally depends on funding,” he said. He noted that under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) plan, every city would get Rs 100 crore a year for the next five years on average, and under the smart cities plan, each city would get Rs 25-30 crore a year over the same period. These were not adequate amounts, he said, adding, “There is a huge need for capital.”

Panelist Mr Chandra was of the view that the central government could only do so much, and that ultimately local bodies should raise their own funds. The role of the Centre and state should only be that of catalysts, he said. “Our city governments are poorly leveraged,” he added. They were unable to leverage land resources, human resources, and heritage assets, he said, possibly because they had never been allowed to feel that they are truly autonomous. “I was surprised, some years ago when I was Principal Secretary, Urban Development, Madhya Pradesh, to learn that Rajasthan did not have property tax!” he said (now it does).

He added: “Ideally you should have strong municipal bonds. You should have borrowings taken care of by securitizing receivables from the assets that cities develop.”

Mr Chandra noted that municipal bodies today collect only 47% of their revenues themselves. He gave the example of severe under-costing of resources such as water. He said: “It is scary – cities like Bangalore and Chennai are rapidly using up their wetlands and lakes, and suffering water shortages. The water table in Noida has dropped significantly in the last 10 years – I can’t imagine what will happen in the next 10 years. If we did cost water right, that’s Rs 200 crore right off the bat for Bhopal. That’s the culture we want to drive – pay for what you use.”

Clearly, India is learning this lesson. In the fireside chat, Mr Rajpal noted that the newly created GDA had been given a range of funding sources – levying betterment charges, shares from Gurugram’s own revenues, and so on. “We’re moving towards a regime of online clearances, so there’s no human interface,” he said.

The Role of Technology

Mr Agarwal explained how his company was helping cities develop technological solutions for exactly this sort of thing. “India’s digitization story is strong,” he said. “Demonetization in the long term will ensure that every business, every government, every small municipal corporation will have a digital channel that makes interactions easier. Filing an FIR, paying municipal taxes online – digitization is helping the economy become faster and more efficient.”

In a Keynote Session titled “The Future of Urban Mobility”, Shweta Rajpal Kohli, Head, Public Policy, Uber India and South Asia, underscored the role of technology in inclusiveness. She explained how her company helped complement inefficient and limited public transit systems worldwide, and provided affordable and reliable alternatives to individual car ownership. “Technology is a great leveller – it doesn’t matter where you’re going or where you live,” she said.

She underscored the hidden costs of inefficient public transit, which pushed people into buying cars. She noted that there were 2 billion cars in the world, and in Delhi alone, their number had doubled in a decade. She said, “Cars sit idle 96% of the time. As a result, nearly a fifth of the land in some cities is being used only to store these hunks of steel.” As a result, she said, that land was unavailable for more beneficial purposes, such as building schools, housing, or public parks.