We all are aware of the potential that the Indian economy possesses. But, it is bogged down by the lack of infrastructure and extremely ignorant attitude of the government and administration towards that. However, that was the case before #Modi Government was sworn in.
Now, suddenly there are visible changes happening which can not only provide world-class living facilities to an average Indian, but also holds a promise of substantial contribution to the booming economy on a large scale.
I am talking about the projection and construction of SMART CITIES in the country which have the potential to generate employment of outsized magnitude, and the result will be the building of planned cities of the future. These cities will be made with huge investments of multi-billion dollars and if planned well, can lead to healthy living conditions for millions, in the coming decades.
What is that invisible magic that a SMART CITY going to bring for Indian Real Estate?
Well, the answer is, a Billion Dollar Idea that holds the SHINING FUTURE for one and all! Smart Cities are the next super heroes for the Indian Real Estate Sector.
Let me elaborate, how exactly!
One of the Biggest Real Estate Booms in History
The official initiative for SMART CITY was taken by the finance minister Mr. Arun Jaitley when he earmarked Rs. 7060crores for building 100 smart cities! Both figures are shocking. 100 smart cities is a really tall dream, unheard of anywhere in the world. And the budgetary allocation of approximately only Rs. 70crore per city is awfully less given the huge requirements of resources to build a city, not a township! However, as per Mr. Jaitley, that is just the seed money required to initiate the process and actual finance will have to be generated with the help of private sector.
This is where individual or corporate investors come in the picture. A project as huge as building so many cities, either from scratch around existing mega cities or converting small cities into smart ones, requires humungous amount of money, resources and efficiency to see the project through. Government alone cannot produce results.
Therefore, various business models are being discussed at the moment to bring a seamless co-ordination between the government, civic agencies and private investors. These are: Build Own Operate (BOM), Build Operate Transfer (BOT), Build Operate Manage (BOM) and Open Business Model (OBM). The best amongst these seems to be OBM given the fact that civic agencies can utilize the services of the best company for different needs and requirements as per the specialization of that organization.
Pre Requisites to a Smart City
Smart cities will need to have certain basic parameters to be fulfilled, and based on that work can be outsourced to private enterprises.
These parameters are:
- smart governance
- smart energy
- smart building
- smart mobility
- smart infrastructure
- smart technology
- smart healthcare
- smart citizens
Now each one of these parameters require private partners who can provide required technological expertise as well as manpower support for these cities to function smoothly without breaking down or becoming a mess, just like our current cities are.
With an estimated population of 600 million about to move to cities by 2030, it becomes absolutely necessary to plan our urban areas in a manner which reduces the chaos and provides clean, hygienic and productive life-style to citizens. Without putting additional pressure on already depleting natural resources and considering the load on environment, the concept of smart cities is the need of the hour.
This would require an educated manpower to run the city which will work seamlessly using the technological advancements of providing basic utilities like gas, power, water etc. Also included in the city will be hospitals, schools, hotels, work-places, places of leisure and entertainment. Combining all these means having adequate resources to provide efficient services!
Smart City or Similar Projects Underway
The best part is that this concept is already being tried in the country, albeit on a small scale, but experiences from these small projects can be used while planning for bigger cities. In Bengaluru, Cisco is already working on a smart grid-based Education City where all the basic utilities will be integrated with the available data of the inhabitants. Not only there, but outside Mumbai, IT major IBM has bagged a contract from the Lodha Group to build all data systems in their Palava City project. Many more such examples exist, which point towards development already taking place with private-public co-operation. It’s just a matter of time that big bang projects will be launched after locations are finalized and feasibility studies are completed.
Smart cities can really change the face of Indian economy as there are only 26 smart cities across the world and India single-handedly as a country is planning to have four times the number of those cities. This single project can give a boost to various sectors like manufacturing, development, IT etc., not only in India but across the world.
Short Term and Long Term Opportunities for Investors
Smart City investment is really a game changer plan if implemented well. For investors, there are multiple gains whether they want to stay in the project for long term or if they want to en-cash their investments over a short period of time. Both ways, they stand to gain as once the process gets kick-started, there will be no looking back.
Now, how exactly a Smart City can contribute towards changing the spending power of a middle-class Indian, and the overall economy of the nation?
Let us have a productive discussion and bring advantageous ideas on the table. I am waiting to hear from you.