An Economic outlook of a futuristic Smart India

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Smart Cities Mission in India, an initiative taken by the Modi government in 2015, targets the urban development and renewal of selected 100 cities in an eco-friendly and sustainable manner. It aims to improve, redevelop, and extend existing cities and a Pan-city initiative with Smart Solutions. Moreover, to improve people’s standard of living through smart technology developments, bringing out smart solutions to drive economic growth. This article provides an economic outlook of how India paves a path to futuristic smart cities.

The core infrastructure elements in a smart city are

  • Adequate water supply
  • Assured electricity supply
  • Sanitation, including solid waste management
  • Efficient urban mobility and public transport
  • Affordable housing, especially for the poor
  • Robust IT connectivity and initialization
  • Good governance, especially governance and citizen participation
  • Sustainable environment
  • Safety and security of citizens, particularly women, children, and the elderly
  • Health and Education

The question is not “Will India achieve its Smart City goals?” but “When?”. With the increasing population and urbanization challenges, India has a long way to go when achieving its target.

Water supply and management

The JalJeevan Mission (JJM) 2019 has provided 11.41 crore (58.77%) households with safe and clean drinking water through taps out of the 19.42 crore rural households as of 13 March 2023. The States that have achieved this milestone are Goa, Telangana, Gujarat, Haryana, Puducherry, D&D and D& NH, and Andaman and Nicobar Islands.

Thus, it is safe to say that more than 50% of rural households in India have access to adequate water supply; however, out of the 36 States and UTs of India, there are only seven certified states and UTs for JJM. Therefore, the states/UTs must put more effort into making their cities into potential smart cities.

To achieve an adequate water supply, sustainable management of water resources is a must while designing smart cities. Water has different uses for different purposes like agriculture, industries, infrastructure, schools, healthcare, sanitation, etc. Therefore, conserving and managing it sustainably will help accomplish the goal. The Sujalam Sufalam Yojana (2018) scheme of the Gujarat government has proved that a water-deficient state now has enough water storage for irrigation and farming, thereby improving the quality of food and happiness of the farmers. Therefore, the center has to function together with the states and the private sector through public-private partnerships to create awareness and training in scientific techniques regarding water conservation and management.

Renewable energy

Coal, the largest source of electricity in India, has increased demands for energy production from 68 GW in 2000-01 to 211.9 GW in the year 2022-23. Still, with India’s population growth, such demands cannot be met. However, renewable energy sources from solar energy can bridge this gap. States like Rajasthan, Gujarat (Ahmedabad city), and Karnataka are highly committed to transforming towards a clean and sustainable electricity supply. Karnataka has ranked first in the ‘Smart Cities Mission projects as of February 2023. According to reports from 2021, more than fifty percent of Karnataka’s electricity production has come from wind and solar energy. The state also aims to be energy self-sufficient to reduce huge fossil fuel imports, thereby redirecting its expenses to other important development projects.

Gujarat aims to provide fifty percent renewable energy by 2029 to the selected smart cities to sustain it. Cities in the states of West Bengal and Bihar have shown the least development in renewable energy projects as there appear to be many bottlenecks; this may be because West Bengal does not have large acres of land to set up wind and solar farms or in the case of Bihar, population density and expensive cost of land compared to other states, however with the newly developed solar subsidy scheme in India, such problems can be resolved if not fully, partially lifting the burden of the people.

Tidal Energy production in India, having a potential 54 gigawatts of ocean energy, can help meet the country’s energy demands as it shares most of its border with coastal areas. Yet again, according to the Indian government’s Ministry of New and Renewable Energy (MNRE), Tidal Energy production faces many snags, including excessively high technology costs, environmental risks, and economic conditions, and is still in the Research and Development Stage.

Foreign Direct Investment

Governed on a 50:50 ratio as a Centrally Sponsored Scheme (CSS) and state government and union territories fund the Smart City Mission in India is witnessing an influx of foreign investors from many big countries such as France has provided a loan of US $120 million to develop cities such as Puducherry, Chandigarh, and Nagpur on urban planning and development, participating in expert technology exchanges. Singapore, a pioneer in urban sustainable development and India’s ASEAN supporter, has collaborated with developing Pune’s transport and traffic management and the country’s move towards urban sustainability. Mumbai’s “Digi Thane” program was initiated in collaboration with Israel’s smart city, Tel Aviv. Countries such as Germany, the USA, Spain, and the UK have also offered to support India in research, development, and transforming the cities into Smart cities. These foreign investments will not only help India achieve the Smart City Mission at a faster pace but also provide a multitude of employment opportunities to the citizens in technology infrastructure, data analysis, urban planning, and e-governance.

Digital Transformation

Technology plays an essential role in developing smart Cities; the Internet of Things (IoT), Artificial Intelligence, and data analytics pave the way for a futuristic smart world. Smart Cities and the Internet of Things (IoT) share an unbreakable bond. They are likely interdependent, and one can say that with the development of the IoT, the future of smart cities in India will be more effective and efficient in all sectors like healthcare, education, Agriculture, Manufacturing, Transport, Urban planning, etc. expanding the educational path for a skilled workforce in the IT world.

The increasing supply of India’s digital public goods and services, such as UPI (Unified Payments Interface), the Aadhaar identity system, and Co-WIN, among the most popular, has been a digital boon to society. The rise of smartphones paved the way for digital payments to function through UPI payments, which showed an increased dependency following demonetization in 2016. Such technology improvements make payments run smoothly and efficiently.

Efficient urban mobility and public transport

Mumbai hosts one of the best public transport cities in India. With technical improvements, cost-efficient and eco-friendly smart mobility solutions for public transport, such as Ola and Uber taxi services, some of which run on CNG or electric vehicles. According to Uber, ride-sharing, bike, and car rentals have transformed the economic demand for riders and drivers, generating INR 446 billion for India in 2021. These services have benefited the society from the social and economic point of view.

Mysore’s public transport transformation from the traditional bus schedule to a Smart public bus transport using GPS-enabled computers to track the coordinates of the city busses connecting them with the passenger’s mobile app has provided an efficient, punctual, and modern system for the passengers, including a safe environment for women and students.

Public-Private Partnership

In the words of Union Road Transport and Highways Minister Nitin Gadkari he said that for India to become a $5 trillion economy, public-private partnerships are an essential need. Many challenges faced by different economic sectors today can be resolved by collaborating between the government and private companies, benefiting both parties by garnering huge profits and eventually serving as a catalyst for economic growth.


Smart cities in Southeast Asia, like Singapore and Kuala Lumpur, have increasingly attracted international tourism over the years based on the development of technology and its influence on the quality of life, sustainable development, and efficient governance. Similarly, with the advancement in AI technology in India, tourism infrastructure can improve customer experiences on accommodation, transport, food, culture, and the like, ameliorating the tourism industry. Such advancements in various sectors inspire and draw the attention of foreign businesses and talents, boosting trade and investment.

India, being a diverse and extensive country, can dazzle a lot more foreign investors, tourists, trade, and employment opportunities, provided it focuses more on planning and execution, sustainability, and funding strategies of its various smart projects, not turning a blind eye to the utmost challenges that the country is facing in today’s world.

Author: Bamerishisha Laloo

The author is pursuing an M.Sc. in Economics and Analytics at Christ University, Lavasa, Pune

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