The Indian Government’s much talked about Smart Cities initiative is hoping to get a boost, based on the upcoming Budget 2017-18 sessions. Key players are hoping added incentives can affect the development and infrastructure vastly. According to experts, Smart City plans require an investment of INR 1300 crores to INR 6000 crores in rebooting infrastructure from ground up – improving basic urban infrastructure, water and sanitation, improving public amenities and roads. These funds would be rolled out depending on the need for infrastructure and other requisites for a Smart city.
According to a news report, INR 1,188 crore has been earmarked for six Smart Cities in Karnataka as part of the budget. The six cities are — Mangaluru, Belagavi, Tumakuru, Shivamogaa, Hubballi-Dharwad and Davanagere. According to reports, around 60 cities are part of the Smart City Mission program and the selection was made based on the plans submitted.
Some of the key areas that require Government funding are – sanitation, solid waste management, building rapid transit systems and improving clean water supply. As per news reports, the projects are billed to operate in two ways — build, own operate (BOO) and build operate transfer (BOT). There might be a visible lag in the funds provided by the government which would need to be met by private participation.
Some of the budgetary provisions outlined are:
Looking to boost potential private partners, the forthcoming budget provides an exempting income arising out of such investments from tax. However, exemptions would be granted only to projects that have been approved and completed within the specified time frame. This would ensure a timely implementation and an increased participation from public.
Experts are also hoping for some budgetary provisions in the upcoming budget session. The ideas proposed are setting aside a corpus of guarantee fund that could be used in developing infrastructure or providing guarantees against loans issued. It could help significantly in development of pan city projects. The loans could be availed by the Smart City Special Purpose Vehicle (SPV) if certain basic eligibility criteria around finance and governance are met. Additionally, the credit enhancement facility by LIC could be extended to cover Smart City related bond issuances.
Experts are looking for a significant growth in the direction of Smart cities, which could ideally take anywhere between 20 to 30 years for its completion. While there have been provisions outlined for ensuring a growth in this domain, there needs to be a considerable investment in terms of manpower and technological advancements.
The Internet of Things, which plays the underlying role in the building up a Smart city by plugging thousands of sensors and other devices, there is a dire need to ensure that these are operated hassle free and there are no hindrances in terms of connectivity and the cyber criminals.