The private sector will play a major role be it in the financing or infrastructural development of Prime Minister Narendra Modi’s pet project of ‘100 smart cities’ entailing an initial investment of Rs35,000 crore annually, as per the concept note of the Urban Development Ministry on Smart Cities Scheme.
The note which has been posted on the website of the Ministry for comments has also proposed a host of taxes like a surcharge on sales transaction and property or fuel tax, with the Government too chipping in with funds to provide uninterrupted supply of power and water and better delivery of public services to citizens in these cities.
The draft that contains broad contours of smart cities, criteria for selection, financing and capacity building needs among others, says, “A large part of the financing for smart cities will have to come from the private sector and Public Private Partnership (PPP) with the States/cities and Central Government only supplementing that effort by way of Viability Gap Support (VGF).”
The Ministry will seek the States’ suggestions on the smart cities project in a meeting on Friday.
The Ministry has broadly proposed including cities with a population of one million to four million for which total estimate of investment requirements is estimated to be seven lakh crores over 20 years. Other criteria for selection would include cities with an approved Master Plan, or those willing to offer a minimum 5,000 acres of land that can be used for economic and housing needs.
This translates into an annual requirement of Rs35,000 crores to be majorly brought in through the private and public private participation (PPP) mode, says the draft note.
learning from the mistakes in JNNURM which has failed to deliver, the Government has decided for proper planning and adopt a holistic approach with focussing on capacity building and facilitating bodies at the State and urban local bodies’ level. “Fragmented approach will not work as has been the experience in JNNURM. Proper planning and a holistic approach will be necessary,” it says.
The Government proposes to review policies related to investment by the private sector to ensure that a higher level of investment is assured while the concept note focuses on law to be made liberal for acquiring land for public purposes.