Prime Minister Narendra Modi announced at the Madison Square, NewYork last year that Ajmer, Allahabad and Vishakhapatnam will be rebuilt into three new Smart Cities. His explicit purpose was to attract foreign investments in India for city building and civic services. Barely a few months into power, he was selling a dream for the moneyed middle class of a living in Americanized cities on Indian soil. It was a dream for living ‘smart’, with all necessary amenities and facilities for entertainment and luxuries.
Construction of these cities are part of Mr. Modi’s development plan for India. He has announced 100 new smart cities since then and allocated Rs 48,000 crores for them @ Rs 100 crores per city per year. States have been asked to identify these and stake their claim. Since the announcement there have been protest movements in several cities, especially by a section of lawyers and some other bodies demanding inclusion of their city in the list. For prospective stakeholders 100 crores is an attraction.
Several problems plague city life in India today. The declaration of smart cities itself is an admission of the pathetic condition of civic facilities and the anti people attitude of the care takers, the municipal bodies and development authorities. The electricity supply is erratic and irregular, the voltage varies at will, the billing is arbitrary; the water supply is limited and at odd hours; there is severe paucity of sewage, rain water drainage and waste disposal infrastructure; it is normal for waste dumps to rot in the open and supply flies, mosquitoes and disease; there is overcrowding and shortage of housing with the houses being severely dilapidated; the roads are packed to capacity with huge sized unruly vehicles pushing their way through pedestrians, cyclists, rickshaws and crowded wayside kiosks; most roads are broken with innumerable potholes, the side paths being laden with rain water and filth; there is poor organized infrastructure for small traders who outnumber big shops by hundreds; there are parking space problems, public transport shortage; the govt. provided facilities of health and education are in shambles with unscrupulous private sector sharks profiting even by cheating; the trees have been cut, the ponds filled up, the atmosphere is sultry and the air often stinks; the civic authorities are omnipresent only in extracting bribes for correcting the deliberately overinflated bills; hardly ever is a fault repaired efficiently; to make a complaint is often to invite more trouble; etc.
The govt. has propagated this dream of ‘smart city’ without giving exact details, which is where actually the devil resides. Those who can afford to aspire for better facilities, even if it is at higher cost, are charmed, while the rest are confused. It has not been explicitly stated who will provide the better facilities and at what cost. But the govt. will not do so, that is certain. The govt. knows for whom it is building these smart cities and in what manner it will execute it. Finance Minister Arun Jaitley outlined this in his budget speech last year. He stated “as the fruits of development reach an increasingly large number of people the pace of migration from the rural areas to the cities is increasing. A neo middle class is emerging which has the aspiration of better living standards. Unless new cities are developed to accommodate the burgeoning number of people, the existing cities would soon become unlivable. The Prime minister has talked of developing ‘one hundred Smart Cities’ as satellite towns of larger cities and by modernizing the existing mid-sized cities”. So basically these cities are for emerging ‘neo middle class’, which of course, is expected to be able to pay since the ‘fruits of development’ have already reached it.
Who is to develop them? The MOU on Allahabad Smart City outlines this.
Under central guidance the UP govt. has entered into a MOU with the USTDA (US Trade and Development Agency) on the 25th January, 2015. The MOU recognizes that Prime Minister of India, Narendra Modi and President of USA, Barack Obama agreed to “find new areas of collaboration and mutual benefit”. The govt. of United States “welcomed India’s offer for US industry to be the lead partner in developing smart cities in Ajmer (Rajasthan), Vishakhapatnam (Andhra Pradesh) and Allahabad (Uttar Pradesh).” The USTDA “… supports infrastructure development in emerging markets and links US businesses to global infrastructure opportunities” while the Govt. of UP is “committed to the development of smart cities within the state of UP”.
Therefore the parties understood that “USTDA intends to contribute funding for feasibility studies/ pilots, study tours, workshops/ trainings, …” and it “intends to invite Smart solutions for Smart Cities Reverse Trade Mission delegation to the United States …”. It will also contribute “funding towards advisory services to support the development of smart city in Allahabad”.
USTDA will collaborate with US govt. agencies “like Dept. of Commerce, the US Export Import Bank and trade and economic agencies” and will call upon “US industry organizations to mobilize private sector expertise and resources to address important aviation and energy related infrastructure connected to developing smart cities”. Its support shall be “subject to the availability of funds and subsequent written agreements with the relevant parties.”
On the other hand the Govt. of UP will provide resources “to include but not be limited to: a. Technical information and data related to smart cities planning; b. Staff, logistical and travel support; and c. State budgetary resources.”
Acting on this, this MOU outlines the following basic aspects:
- For the smart city the funds, technical information and data and staff and logistics will be provided by UP govt.
- Contracts for such development will be given to US companies which will be mobilized by the USTDA. Important aspects will be of building airports and power plants. There will be no bidding, or at best it will only be between US companies.
- Purpose of this project is to provide business opportunities to US companies and to develop ‘smart’ Allahabad. For this the USTDA will fund the pilot studies, seminars, study tours, workshops, training to Indian bureaucrats, political and social activists.
The ‘Draft Concept Note on Smart City Scheme’ along with this note and subsequently the “Smart City Mission” document issued by the Urban Development Ministry explain the logic and objectives of this scheme.
- The concept advanced is “development necessitates urbanization”. “Cities are referred to as the engines of economic growth”, the documents say, expecting rapid increase in urban population from 31% at present to 60 to 65%, because “people migrate to cities primarily in search of livelihood and economic activities”. A rapid growth of urban population will only be at the cost of either erosion of village life or it being forcefully uprooted. India’s development needs lie in safeguarding and developing livelihood of the vast peasantry constituting 70% of the population. This is only possible by giving them land to farm on, making agriculture a profitable venture, ensuring infrastructure to develop farming and village life. That is a huge task and it entails several times more manpower and investment than required for 100 smart cities. It will also increase peoples’ income and purchasing capacity and shift the focus of modernization from few islands called ‘smart cities’ to an entire countryside bubbling with advancement and demanding more.
- What is a smart city? After referring to various international cities considered smart, it is stated to be one which will “offer economic activities and employment opportunities”. For this it “needs to develop institutional, physical and social and economic infrastructures” and for that it should “attract investors and professionals to take up such activities”. It should also provide a “very high quality of life (comparable with any developed European City), i.e. good quality but affordable housing, cost efficient physical infrastructure such as 24×7 water supply, sanitation, 24×7 electric supply, clean air, quality education, health care, security, entertainment, sports, robust and high speed interconnectivity, fast and efficient urban mobility, etc”. For this it should be an “investor friendly smart city” without “bureaucratic hassles” and with “adequate labour force”. “Investors themselves look for decent living”.
- Its Supervisory Structure: Consulting firms will prepare the “Smart City Plan for competing in the Smart City challenge”, after consulting citizens, Residents Welfare Associations, Tax Payers Associations, Senior Citizens and Slum Dwellers Associations. The claims of these cities to qualify will be evaluated by “a panel of national and international experts, organizations and institutions.” Incidentally the Madison square announcement was made by Mr. Modi after consulting Barack Obama, not the peoples’ associations. Each Smart City will have a Special Purpose Vehicle, SPV, for its implementation. This will be headed by a full time CEO and have nominees of Central Government, State Government and ULB (Urban Local Body) on its Board. Each potential smart city is to be assisted by a consultant and one of the following “handholding agency” – World Bank, ADB, JICA, USTDA, AFD, KfW, DFID, UN Habitat, UNIDO, etc.
- Funding – Increased taxes on people : For the project it is expected that “most of the infrastructure will be taken up either as complete private investment or though PPPs. The contributions from the GOI and States will be largely by way of Viability Gap Support (VAS)”. One may keep in mind that such viability gap support is not granted to Indian farmers who are committing suicides in large numbers.
“The GOI funds and the matching contribution by the States/ULB will meet only a part of the project cost. Balance funds are expected to be mobilized from:
- States/ ULBs own resources from collection of user fees, beneficiary charges and impact fees, land monetization, debt, loans, etc.
- Additional resources transferred due to acceptance of the recommendations of the Fourteenth Finance Commission (FFC).
- Innovative finance mechanisms such as municipal bonds with credit rating of ULBs, Pooled Finance Mechanism, Tax Increment Financing (TIF).
- Other Central Government schemes like Swachh Bharat Mission, AMRUT, National Heritage City Development and Augmentation Yojana (HRIDAY).
- Leverage borrowings from financial institutions, including bilateral and multilateral institutions, both domestic and external sources.
- States/UTs may also access the National Investment and Infrastructure Fund (NIIF), which was announced by the Finance Minister in his 2015 Budget Speech, and is likely to be set up this year.
- Private sector through PPPs.
Paras ‘i’ and ‘iii’ mean more urban taxes, more registry charges, more diversion of ULB funds, more loans on ULBs, all leading to costlier city life. Para ‘iv’ shows that regular funds for govt schemes meant for urban poor will get diverted to building smart cities and from paras ‘ii’ and ‘vi’ that central funds will be provided for them. Para ‘v’ highlights more direct domestic and external borrowings and dependence thereof and ‘vii’ shows that profit making facilities and responsibilities will be handed over to the private sector, the MNCs and Indian corporate.
It has been stated that the tariffs are to be such that “they are affordable for the poor and yet recovers costs at higher levels of use”. Clearly the plan is to recover the profits from the ‘middle class’ and give a short shrift to the poor.
The documents state clearly that “innovative methods of raising revenues will have to be developed by the States and Cities ….”. The principle of justifying high tariffs by private service providers is already in place even now with the concept of ‘independent’ regulators. As in Delhi the regulator for electricity tariff was promoting higher profits while the company was claiming excessive costs and the people were as it is groaning under fast running metres. It is proposed to have independent regulators for smart cities also. It is important that in this regulation there is no provision of peoples’ participation.
5.It will be a fully Privatized City: So in short we are looking at a totally privatized city, with no municipal or govt. facility. Samples of this are available in colonies ‘developed’ by builders or developers as they are called now. They already have issues with floor area/ carpet area as per advertisement, maintenance and overcharging as well as insecurity due to over domination of established private security structures themselves.
Who will provide all the above good quality services and facilities to those who can’t afford them? There is stress on low cost housing being ‘especially for the poor’. Slums are to be better planned, obviously by the MNCs, not the govt. The central govt. has stipulated that at least 15% of the housing should be of the ‘affordable category’. Surely these would be just like the ‘charitable’ patient care clause being implemented by big corporate hospitals.
- Labour Force: There is some emphasis on “adequate availability of required skills in the labour force” as a necessary requirement to “make it easy to establish an enterprise and run it efficiently without any bureaucratic hassles”. This is an “essential feature of an investment friendly smart city”. In that sense these cities will be even ‘smarter’ than those in Europe and USA where even domestic labour has to be paid for at a minimum rate and will be without hassles of labour laws! A ‘heaven’ for the rich, and possible ‘hell’ for the poor, that too without any bureaucratic hassles!
- Growth and Development Cycle: It is claimed that these smart cities will “set in motion a virtuous cycle of growth and development”. How they will do that is not answered. While it is true that the development of economic infrastructure, institutions, etc for certain services will set in motion some economic development, but still agriculture, manufacturing involve more than 80% of India’s population. The documents advocate “giving an identity to the city — based on its main economic activity, such as local cuisine, health, education, arts and craft, culture, sports goods, furniture, hosiery, textile, dairy, etc”. No mention is there of any manufacturing or big industry. How will the service sectors of city life by themselves set in motion a virtuous cycle of growth with both the primary and secondary sectors being in a quandary is impossible to comprehend. This is being deliberately pushed to misguide the people. One should consider that construction of institutions of this type in large numbers in rural areas has only left empty buildings standing on agricultural fields in large numbers. There are upto 20 to 40 engineering colleges in several cities, several of which have no or very few students. Several cities have ghost colonies of flats which have been purchased but not occupied as the owners live on their other properties. A recent report in the Economic Times said more than 1.7 lakh flats are lying unsold in NCR, Delhi.
- Health and Education: On provision of education and health care the documents are obviously silent on govt. institutions providing any of these facilities. But a separate note circulated for the Allahabad Smart City advocates that “the administration needs to set up a single window system for examination and approving the proposals from private sector in setting up educational facilities.” As far as quality of education is concerned, it states “the market is the best way to judge as students and parents prefer quality institutions in taking admissions”. For health services the plan is to develop a “medi city in every smart city” in 50 to 100 acres land and develop PPP models and promote private sector participation in PHC services, community insurance schemes, etc. So private companies will penetrate even ongoing social health schemes like ICDS, Mid Day Meals and use services of Anganwadi, ASHA and primary school staff.
- Water Supply and other provisions: The plan to supply water is an example of their plan to provide all 24×7 facilities. It talks of “smart water metres” for “measuring water consumption” providing customers with “data to help them monitor their water usage and reduce costs”. It says “water supply also requires a proper revenue model based on metering of connections and volumetric water supply tariff”. Already in these services a ‘smart’ trend of charging the people through prepaid services has begun. It is there in tele communication with prepaid SIM cards, in water supply with promotion of bottled water and now water ATMs and is being promoted in electricity supply with installation of individual transformers. All are based on volumetric supply concept. So smart meters in water, electricity and other services is a system of prepaid charges, fixed charges, fixed timed charges even if one is unable to use, etc. This smart solution will apply to telephones, internet, drainage, waste management services.
- City Structure and Environment: It is claimed the aim is to provide clean and sustainable environment, freer road movement, public transport at different levels. There are comparisons with Barcelona, Singapore, Yokohama, Seoul. Even with their plan to make smart cities with luxurious use of land, it is unlikely to be environment friendly because their main emphasis is on concrete structures. The plan is to change the existing middle level cities and develop satellite townships as new cities. For this they will uproot villages and evict the peasantry on a large scale. Their figures disclose that they wish to urbanize about 40% of the existing rural population and possibly take over that much land. This plan has already been a disaster in several Latin American countries where large section of population lives in big cities. Such a direction has been afloat in govt. circles since UPA rule when then Prime Minister Manmohan Singh often stated that people should not expect that agriculture will be able to provide livelihood. Such a plan is certainly not sustainable for a huge population of 1.25 billion living with a population density of 368 per square km as compared to Germany with 229, USA with 33, Brazil with 24 and Argentina with 14 persons per sq.km. Nor can India’s development model be compared with Singapore which is a trading city country with a population density of 7148 per sq.km.
- Job Creation: The document claims that each smart city will create 10,000 new jobs per year. Each of these cities will be established after displacing hundreds of villages where they will destroy thousands of livelihood in each village. To promote this as ‘development’, the concept of a ‘job incubator’ to be built in each smart city has been introduced. It is claimed this will be given several incentives and support from the govt. and it will provide for training, live and work, retraining and the likes to people, at a cost. It is a fancy creation to cover up the responsibility of the govt. to do enough to satisfy the needs of employment generation.
- Accountability: There is much emphasis on provision of “smart solutions” to every problem and “participatory systems of governance”. What happens if the facilities provided are short of those promised, i.e. in cases of cheating, overcharging, poor supply, etc. This is often the experience with private builders, mobile phone service providers, several fancy so called professional courses, overbilling and unwarranted treatment by private hospitals, fast running electricity metres and several others. These are not off the shelf provisions. Once you are stuck with them, you stay with them for long. And having won the contract, the company/ developer holds a monopoly. Well, one could go to court and seek justice in years. But there is no government to answer for this. So where is the participatory governance? Probably this is the smart solution they are offering.
- People’s Participation: The documents state that “new technology has provided a new dimension to this system making it efficient, accountable and transparent”. It is a funny logic which people are expected to swallow that technology will provide for all this even against the wish of the company or contractor. And this is noted as a “Pillar of a Smart City”. It stresses on “involvement of people in decision making process”. But the whole idea of smart cities has been thrust from above, even being declared on foreign land, without asking any section of people. Public participation is to be “through social media” with municipal offices being made “fully automated”.
Further there is discussion on ensuring that there is “no civic indiscipline” through installation of CCTV cameras and “infusion of technology and very strong Service Level Agreements so that human intervention is a bare minimum”. Who will ensure the agreement for the hapless consumer against a big company is not answered. May be the cameras will!
- SMART: Smart used as an adjective means to be clever, crafty and one can complement the govt. for having used this word in a ‘smart’ way. Smart does not mean that it will be a good city, with facilities at affordable costs, or security of livelihood, or of environment and ecology. It is a full developmental program, where entire structures and establishments will change, economy will change, life of the people will change and the changed new circumstance will become a compulsion.
The project will actually allow urban and rural rich to outsmart the urban and village poor and peasantry as a whole; the service provider companies and developers will outsmart their customers and the big companies, particularly US MNCs and their allies outsmart Indians by erecting ‘white elephants’ on our farmlands and rivers, our major sources of livelihood.
from New Democracy August issue