The Aakhya Weekly #113 | The Dawn of Smart Industrial Cities

In Focus: Smart Cities Mission: India's Leap into the Future

By Aradhana Gupta and Yashvika Malhan

In the heart of India's ambitious National Industrial Corridor Development Programme (NICDP) lies a vision that could redefine the nation's industrial landscape. With a staggering investment of ₹286.02 billion (approximately $3.41 billion), India is set to create 12 new smart industrial cities. These cities promise to revolutionize manufacturing, generate millions of jobs, and attract substantial investments. To put this into perspective, the NICDP's investment is equivalent to about 0.1% of India's total GDP in 2022, signaling a significant commitment to industrial development.

This bold initiative represents a pivotal moment in India's economic trajectory, one that could reshape the country's urban and industrial future. As we stand on the brink of this new era, it's crucial to examine not only the potential benefits but also the challenges and policy implications of this monumental undertaking.

A New Chapter in India's Industrial Evolution

India's industrial journey has been marked by significant milestones, from the establishment of Jamshedpur and Durgapur in the early years of independence to the game-changing Delhi-Mumbai Industrial Corridor. Each phase has brought its own set of innovations and challenges, contributing to the rich palette of India's industrial development. Now, the smart city mission represents the next leap forward, integrating cutting-edge technology with urban planning to create industrial hubs that are not just efficient, but also sustainable and livable.

These new smart cities, spread across 10 states and organized along 6 major corridors, are designed to offer a 'plug-and-play' setup that eliminates traditional hurdles for businesses. By bringing workplaces closer to homes, they aim to reduce commutes, fostering a healthier work-life balance and aligning with sustainability goals. The vision extends beyond mere industrial efficiency; it encompasses a holistic approach to urban living that could set new standards for city planning across the country.

The Promise of Technology and Sustainability

At the core of these smart industrial cities is the integration of advanced technologies. From Internet of Things (IoT) devices monitoring air quality and traffic flow to artificial intelligence systems optimizing energy usage, these cities are set to become living laboratories for the latest in urban tech. This technological backbone promises to make these cities more responsive to the needs of their residents and businesses, potentially creating a new paradigm for urban governance in India. According to a report, the global smart cities market is expected to grow from $410.8 billion in 2020 to $820.7 billion by 2025, at a compound annual growth rate (CAGR) of 14.8%. India's smart cities initiative positions the country to capture a significant portion of this growing market. 

Sustainability is another key pillar of this initiative. With the global focus on climate change intensifying, these smart cities present an opportunity for India to demonstrate its commitment to green development. Plans include extensive use of renewable energy, efficient waste management systems, and green building practices. India has set ambitious renewable energy targets, aiming to achieve 500 GW of renewable energy capacity by 2030. The smart industrial cities could play a crucial role in meeting this target, potentially housing a significant portion of this new capacity. If successful, these cities could become models for sustainable urban development, not just for India but for the entire developing world.

Learning from Global Success Stories

As India embarks on this ambitious journey, it's crucial to draw insights from successful international models. Singapore's Smart Nation Initiative demonstrates the power of data-driven decision-making and citizen engagement. The city-state has invested over $1 billion annually in its smart city initiatives, resulting in tangible improvements in urban living. For instance, Singapore's smart traffic management system has reduced traffic congestion by 20% and increased public transport usage by 15%. By prioritizing transparency and involving citizens in the urban development process, Singapore has created a city that is not only technologically advanced but also responsive to its residents' needs.

Germany's Industry 4.0 showcases the transformative potential of advanced automation and data exchange in manufacturing. This initiative has propelled German industry to the forefront of the fourth industrial revolution, with studies estimating productivity gains of up to 50% in some sectors.

China's Eco-Cities provide a blueprint for balancing economic growth with environmental sustainability. The Tianjin Eco-City, for example, has achieved 100% green building coverage and sources 20% of its energy from renewable sources. These examples offer important insights into the challenges and opportunities of building environmentally conscious urban areas.

South Korea's Songdo International Business District illustrates the importance of comprehensive urban planning and advanced infrastructure. Built from scratch on reclaimed land at a cost of $40 billion, Songdo represents one of the most ambitious smart city projects to date. Its successes and struggles provide valuable lessons on the complexities of creating a city from the ground up.

By cherry-picking the best elements from these global examples and adapting them to the Indian context, policymakers have the opportunity to create a uniquely tailored approach that addresses India's specific needs and challenges.

Potential Pitfalls: Lessons from the Smart Cities Mission

As we look to the future, we must also reflect on the lessons learned from India's ongoing Smart Cities Mission. Launched in 2015 with a budget of ₹98,000 crore ($14 billion), this initiative aimed to transform 100 Indian cities into technologically advanced, citizen-friendly hubs. While it has spurred significant advancements, the process has encountered several hurdles that offer important insights for the new industrial smart cities project.

One of the primary challenges has been the lack of a concrete definition of a "smart city" in the Indian context. The broad and open-ended criteria have complicated benchmarking and progress evaluation, leading to varied implementation strategies and difficulty in measuring success uniformly. As we move forward with the industrial smart cities, it's crucial to establish clear, measurable criteria that define what constitutes "smart" in this new context.

Governance issues have also been a concern, with many cities operating under outdated planning systems ill-equipped to meet modern demands. The new industrial smart cities present an opportunity to overhaul these systems, potentially setting new standards for urban governance across India. This could involve strengthening local governance structures, updating planning regulations, and fostering greater collaboration between different levels of government.

Implementation delays have marred the Smart Cities Mission, with only a fraction of planned projects completed on schedule. Factors such as the COVID-19 pandemic, land acquisition issues, and complex project requirements have contributed to slowed progress. These experiences underscore the need for more robust project management frameworks and contingency planning in the development of the new industrial smart cities.

Policy Implications

The development of smart industrial cities represents not just an urban planning initiative but a significant shift in India's industrial and economic policy. It reflects a move towards decentralized industrial development, potentially reshaping the country's economic geography. This shift carries profound implications for regional development, labor markets, and inter-state relations.

One of the key policy challenges will be ensuring equitable development across different regions. While the smart cities are spread across multiple states, there's a risk of exacerbating existing regional inequalities if not managed carefully. Policymakers will need to consider how these new urban-industrial hubs integrate with surrounding areas and contribute to balanced regional growth.

The new smart cities also promise to generate millions of jobs, but they will also demand new skills from the workforce. This necessitates a rethinking of education and vocational training policies to ensure that India's workforce is prepared for the jobs of the future. Policies promoting skill development, lifelong learning, and easy transition between jobs will be crucial.

Environmental policy is another area that will need careful consideration. While the smart cities promise to be more sustainable than traditional urban areas, their development will still have significant environmental impacts. Robust environmental impact assessment processes, stringent pollution control measures, and policies promoting circular economy principles will be essential to ensure that economic growth doesn't come at the cost of environmental degradation.

Furthermore, the success of these smart industrial cities will depend heavily on their ability to attract and retain businesses. This calls for a reevaluation of India's industrial policy, potentially including new incentive structures, streamlined regulatory processes, and policies to promote innovation and entrepreneurship.

India’s Opportunity with Smart Industrial Cities

As we stand on the brink of this new era, the question is not just whether we can build smart cities, but whether we can build them smartly. Success will require more than just financial investment. It will demand a commitment to continuous learning, adaptability, and a willingness to engage with and address the complex challenges that arise in urban development.

The dawn of smart industrial cities is upon us. It's time for India to seize this opportunity and turn this ambitious vision into a transformative reality. With careful planning, robust policy frameworks, and a commitment to inclusive and sustainable development, these new urban-industrial hubs could become beacons of innovation and growth, setting new standards for urban living and working, not just for India, but for the world. The path ahead is challenging, but the potential rewards – in terms of economic growth, job creation, and improved quality of life – make it a journey worth undertaking.

Top Stories of the Week

PM Modi’s Historic Two-Nation Visit to Brunei and Singapore: Strengthening Ties in Trade, Technology, and Regional Cooperation

Prime Minister Narendra Modi is on a historic two-nation visit to Brunei Darussalam and Singapore, advancing India's Act East Agenda and Indo-Pacific Vision. His visit to Brunei marks the first by an Indian Prime Minister, where he was warmly welcomed by His Majesty Sultan Haji Hassanal Bolkiah and the Royal family. The two nations signed agreements in areas such as defence, trade, food security, education, energy, space technology, health, and cultural exchanges. They also discussed collaboration in emerging technologies, ICT, fintech, cyber security, and renewable energy. Both leaders condemned terrorism and reaffirmed their commitment to strengthening the ASEAN-India Comprehensive Strategic Partnership. An MoU on satellite telemetry and launch vehicle cooperation was also signed.

PM Modi’s visit to Singapore included a ceremonial welcome at the Parliament House, where he met with Singaporean ministers and dignitaries. He visited AEM Holdings Ltd's semiconductor facility alongside Singapore’s Prime Minister, after attending a lunch hosted by Senior Minister Lee Hsien Loong. PM Modi is also scheduled to meet with President Tharman Shanmugaratnam and Emeritus Senior Minister Goh Chok Tong, and hold business discussions with CEOs. Several key MoUs were signed, covering digital technologies such as DPI, cyber security, 5G, and emerging fields like quantum computing, artificial intelligence, and supercomputing. The two countries are also shared MoUs developing a semiconductor cluster, fostering talent in semiconductor design, and strengthening cooperation in health, medicine, and education.

Digital Bharat Initiative

The Department of Telecommunications on 2 September 2024, notified and implemented the first set of rules under the Telecommunication Act, 2023, prescribing the functioning of the Digital Bharat Nidhi (DBN), which replaces the Universal Service Obligation Fund (USOF).

In line with the Digital Bharat initiative, these rules stipulate enhanced accountability for service providers, and ensure the crucial quality and accessibility of communication services. These provisions will also promote transparency, enable consumers to make informed choices and stimulate a competitive environment that drives innovation. Furthermore, these regulations will pave the way for improved infrastructure, particularly in rural and underserved areas, and also bridge the digital divide that has historically impeded equitable access to technology. By leveraging advancements in telecommunications, the government will be able to enhance digital literacy among citizens and empower them to participate actively in the digital economy.

In addition, it shows the government’s commitment to ensuring cybersecurity remains a top priority, as the foundation elements are laid down for a safe online ecosystem. Protective measures are being instituted to safeguard user data, which will establish trust in digital transactions. The first set of rules under the Telecom Act signifies a substantial milestone in realising the vision of a Digital Bharat.​ The government continues to engage with stakeholders to refine these frameworks, ensuring that they remain responsive to the evolving needs of our citizens.

A Few Good Reads

• Chandrajit Banerjee writes about how smart industrial cities can propel India towards its export targets 

• Manuraj Shunmugasundaram explains a game plan for India’s success as 2036 Olympic host

• Vijayetta Sharma argues how malnutrition is killing India’s future sports stars 

• Giulio terzi di Sant’Agata & Beniamino Irdi views how can achieve true global influence