At the first-ever workshop on the Smart City Mission hosted for mayors and commissioners, Urban Development Minister M. Venkaiah Naidu on Thursday said the government’s urban renewal policies were designed to accommodate the urban poor. Yet his views contradicted with the financing model of the project, which largely relies on high property taxes and expensive public services.
For the first time in India’s urban governance, mayors will be given powers to design their cities.
The workshop panellists — ranging from the representatives of the Bloomberg Philanthropies to Urban Development Ministry officials — explained the structure of the Smart City Mission, emphasising that the cities have to be “compact,” spread on minimum of 500 acres with adequate water supply, assured electricity, sanitation and efficient urban mobility.
The participants raised all kinds of questions. The ones that put the panellists on the back foot were about land acquisition and finance generation.
Since a smart city needs to be built on land, several mayors said the process of acquisition would be tricky. They wondered if the Central government would roll out additional funds to help them purchase land. They were told no such funding would be provided.
According to the Ministry officials, the first five-year investment for each smart city is estimated at Rs. 5,000 crore.
The Centre will provide Rs. 1,000 crore and the city has to manage the rest. Kumar V. Pratap, Economic Adviser at the Urban Development Ministry, said that to fill the financial gaps the government would have to increase taxes on property, entertainment, advertisements and parking lots.
Mr. Naidu told the mayors that they should stop “worrying about the next elections” and focus on smart city projects.