Cities in
Search of
Smart
Funding
Cover Story
S
mart Cities are a rap-
idly growing market
and India Smart Cit-
ies Mission is a part of
$1.5 trillion global investment
portfolio. Funding the 100
smart cities in India is a mam-
moth task for the govern-
ment and at the same time it
is also a great investment op-
portunity to attract private
players in the urban develop-
ment of the country.
The government has al-
ready laid out a detailed road
map for the cities to fund for
the huge infrastructure devel-
opment for the cities, which is
a curious mix of central
grants, state government al-
location, Public Private Part-
nership (PPP), Foreign Insti-
tutional Investors(FII), and
external borrowing from
World Bank and Asian Devel-
opment Bank. Apart from
that the government has also
introduced new initiatives
like municipal bonds, usercharges, land monetisation
scheme and other service based
taxes to be imposed by the Ur-
ban Local Bodies(ULBs) to
make municipalities self sus-
tainable. These instruments
can help cities to finance
smaller infrastructure and city
centric projects.
Still achieving the financial
goals for the cities is not an easy
task. Experts have pointed out
that the government needs to
modify various policies and
overhaul the existing system of
municipality financing in In-
dia. It requires smart policy ini-
tiatives, fast track clearances of
projects and adopting new
ways to attract investments in
one of the largest infrastruc-
ture projects by the current
government.
Our cover story analyses the
opportunities as well as several
challenges for the financing
models prescribed by the gov-
ernment to achieve the difficult
target. <