Urban transport remains the primary area of investment in Smart Cities

08 April 2019 Consultancy.in

Examining the progress in the government of India’s Smart Cities Mission, global professional services firm Deloitte has revealed that the majority of funding for the scheme is being drawn from the central government, while the investments are focused primarily in the urban transport sector.

The Smart Cities Mission was launched by the Indian government in 2015, with an estimated project value of approximately $14 billion. The scheme aims at developing a number of urban financial centres across India, each of which is endowed with the latest in Information Communication Technology.

By definition, all functions within a smart city are carried out in the digital sphere. According to the World Bank, a smart city is a technology-intensive city that has sensors installed everywhere and offers highly efficient public services using information gathered in real time by thousands of interconnected devices.”Key components of a smart city

Deloitte breaks the characterisation of a smart city down into six primary components. The first is smart governance, which entails the migration of the entire state infrastructure and citizen services to the online domain, facilitated by the presence of a strong IT infrastructure

The second component described by the Big Four accounting and advisory firm is smart living, which includes state-of-the-art facilities for sewage & sanitation, water supply, electricity, housing and a number of other aspects of daily life. These constitute the core infrastructure of a smart city.

In addition, a smart city consists of smart people, which means a comprehensive education programme and an abundance of cultural activities. Smart mobility is another key aspect of a smart city, which not only includes a solid walking infrastructure, but also ICT-based transport and traffic control.Overview of Smart Cities Mission progress

The last two components, as per Deloitte are smart environment and smart economy. The latter ensures that most residents of a smart city have access to employment opportunities, while the former entails the absence of pollution, green architecture, and a reliance on renewable energy.

Building on these components, the scheme has integrated an increasing number of ctiies within this programme, starting with 60 in 2016 and 30 in 2017. By June last year, the North Eastern city of Shillong was shortlisted to be the 100th smart city in the country.

Once a city is selected to be a part of the Smart Cities programme, Deloitte identifies three types of development that are conducted in the urban centres. The first comes under the bracket of Redevelopment Projects, which include replacements of various aspects of the current built environment. Investments in 99 cities by sector

The second comes under the broad ambit of Retrofitting Projects, which entails the addition of new infrastructural development in order to facilitate greater connectivity in the city. Thridly, the firm identifies Greenfield Projects, which include the introduction of smart solutions in “previously vacant areas.”

While the majority of the investment in the Smart Cities Mission is drawn from the central government, Deloitte’s analysis reveals that the smart mobility component is drawing the most funding, followed by area development and economic development. Energy, ICT solutions and housing follow as the next biggest priorities.

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Public and private innovation are driving India's substantial digital economy

01 April 2019 Consultancy.in

New analysis from global management consultancy McKinsey & Company has reinforced what many experts have been indicating in recent times, that India is amongst the largest digital economies in the world. On a number of metrics, India is second only to China in terms of digital consumption.

The analysis comes against the backdrop of reports from a number of major consulting firms about India’s rapidly digitalising economy. In 2017, the Boston Consulting Group placed India’s population of online users at approximately 400 million, and predicted that it would reach 850 million by 2025.

Since then, experts have focused on what the emergence of such a large digital market means for various sectors, and how they are likely to grow and evolve in this context. McKinsey’s latest study offers a comparative analysis of India’s digital market against other major economies in the world.

India's global digital position

The highlight of the report is the role that the Aadhaar initiative from the Indian government has played in the development of this digital economy. Aadhaar was launched in 2009, and is essentially a digital identity mechanism that has registered as many as 1.2 billion people in accordance with their biometric information. 

The presence of such a digital identity has spelled growth for a number of other sectors that have fed off of this substantial database. The digital banking segment is one example. By the start of last year – nine years after the introduction of Aadhaar, nearly 900 million bank accounts were linked to Aadhaar information.

Not only does this represent monumental growth over less than a decade, but the number also nearly doubled since the previous year, when the number of linked bank accounts stood at just under 400 million. The digital identity database generated under Aadhaar has grown into the largest of its kind in the world.

Global digital adopters

The report attributes the overall digital growth in the country to a number of other government initiatives as well, including the Goods and Services Tax that was established in 2013, and has created a unified and harmonized database for over 10 million firms that pay indirect tax to the government.

Consequences of this expansion in the digital sphere have spread far beyond the sectors most directly affected, and India has become the second largest digital economy in the world behind only China on a number of metrics. These include the number of application downloads as well as the number of wireless phone subscribers.

The latter has been the result of the Reliance Jio initiative, which has tremendously increased the accessibility of mobile data by offering extremely cheap data plans across the urban and rural landscape. The number of internet subscribers has also grown to the second largest in the world as a result, currently at 560 million according to McKinsey.

Falling data prices in India

Increased prosperity has also led to a boom in the number of smartphones being purchased in India, currently at nearly 355 million in India, behind only China. The same global position is applicable when comparing the volume of social media engagement in India. Alongside government initiatives, the report attributes this scenario to innovation in the private sector as well.

“Global and local digital businesses have recognized the opportunity in India and are creating services tailored to its consumers and unique operating conditions. Media companies are making content available in India’s 22 official languages, for example,” says the report.