New Smart Cities
Context:
Indian policymakers have long aimed to attract investment in manufacturing, yet the sector’s contribution to GDP, at 16-18%, falls short of the 25% target set for India@75.
New Initiatives
- To address this, the government has introduced several initiatives in recent years, such as the PLI (Production-Linked Incentive) scheme, National Logistics Policy, Gati Shakti, cluster development, industrial corridors, and ease of doing business reforms.
- In a further push, the Cabinet Committee on Economic Affairs approved public investment of ₹28,602 crore on August 27 to develop 12 industrial smart cities (ISCs) across six major industrial corridors in 10 states. The cities are spread across key locations such as:
- Five cities along the Amritsar-Kolkata Industrial Corridor (Rajpura-Patiala in Punjab, Khurpia in Uttarakhand, Agra and Prayagraj in Uttar Pradesh, and Gaya in Bihar).
- Two cities in the Delhi-Mumbai Industrial Corridor (Jodhpur-Pali in Rajasthan and Dighi in Maharashtra).
- Four cities in the Vizag-Chennai, Hyderabad-Bengaluru, Hyderabad-Nagpur, and Chennai-Bengaluru corridors (Kopparthy and Orvakal in Andhra Pradesh, Zaheerabad in Telangana, and Palakkad in Kerala).
- One additional city has yet to be announced due to the model code of conduct.
Suggestions:
- Plug and Play Environment: These locations must provide a seamless “plug and play” infrastructure with streamlined procedures and facilitation centres to demonstrate the ease of doing business reforms in practice.
- Social Infrastructure: In parallel with industrial development, a focus on social infrastructure—such as schools, hospitals, parks, retail, and entertainment facilities—will enhance the appeal for employees and their families.
- Smart Utilities: These industrial cities must incorporate modern “smart” utilities, including efficient liquid and solid waste management systems, green energy solutions, and cutting-edge ICT technologies.
- Integration and Convergence: The new ISCs should integrate existing policies such as the National Single Window System, One District One Product, Sagarmala, and various smart city and skill development initiatives to create a cohesive ecosystem.
- Learn from Past Initiatives: The earlier Delhi-Mumbai Industrial Corridor (DMIC) locations, like Dholera and Shendra-Bidkin, faced challenges such as land acquisition delays and poor coordination. These new cities must avoid similar pitfalls by ensuring better planning and stakeholder coordination.
- Attract Private Capital: The central allocation of ₹28,602 crore, averaging about ₹2,400 crore per city, primarily covers external development costs. Therefore, creative public-private partnership (PPP) models must be designed to attract private capital for core, social, and supporting infrastructure development.
- Coastal Economic Zones (CEZs): To enhance India’s export competitiveness, the idea of establishing Coastal Economic Zones (CEZs) should be revived. Modelled after China’s free trade zones, CEZs could provide a regulatory environment conducive to labour-intensive, value-added manufacturing for export.
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