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By<\/strong><\/em> Arindam Guha<\/strong><\/em>\n
The initial list of 20 cities to be taken up for upgrading to Smart Cities<\/a> has recently been announced by the Ministry of Urban Development. Another 23 cities have been given an opportunity to submit revised Smart City plans under a fast track option by mid-April 2016. With this, the Government’s Smart City Mission, which was hitherto in the planning phase, now moves into implementation. It therefore becomes important at this stage to assess the nature of investments proposed to be made and identify how the forthcoming Budget 2016-17 could act as a catalyst for facilitating these investments.
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\nA closer look at the plans submitted by the top 20 cities indicates an investment requirement of Rs. 1,500 – Rs. 3,500 crore per city. Out of this, pan-city solutions, which are intended to benefit all citizens, account for Rs. 400 – 800 crore, with the balance being the expected outlay on area-based solutions under which any one contiguous area (minimum of 250 acres) within the city is proposed to be taken up for development.
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\nWhile the proposed pan-city solutions vary from city to city, the most common ones comprise information and communication technology (ICT) solutions for citizen services like issue of birth & death certificates, trade licences, property tax assessment & payment etc.; emergency response services; intelligent traffic management systems, solid waste management and urban mobility solutions for mass rapid transit systems or last mile connectivity. Many of these solutions like pneumatic solid waste collection & transportation systems, sensor-based traffic management-crime tracking – pollution monitoring systems, back-end intelligent decision making systems etc. involve high end technology, some of which may also need to be imported.
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When it comes to area based development, urban redevelopment \/ reconstruction for increasing compactness, walkability, open spaces; provision of basic infrastructure like pipelines in the areas of water & sanitation; adoption of environment friendly solutions like solar power<\/a> generation, LED street lighting etc. are the most common constituents.
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With quick implementation being the need of the hour, the forthcoming Union Budget needs to earmark around Rs 5,000 crore under the Smart City Scheme to commence the activities in around 50 cities across the country. In addition, adequate budgetary provisions under convergent schemes like Amrut<\/a>, Safe City, Solar City, Swaach Bharat etc. also need to be made for the selected cities to ensure implementation of the Smart City plans in a comprehensive manner. With States also having to contribute their share of the investment (1:1 in the case of the Smart City Mission with the proportion varying for the other schemes), a suitable budgetary mechanism for ensuring coordinated release of funds may also be explored.
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\nIncreasing options and means for financing of Smart Cities is another area which needs to be addressed. Based on the quantum of funds required, it is imperative that the Central and State Government funding be supplemented with private investments, both in the form of debt and equity. With a large part of the investments proposed to be used for creation of urban infrastructure, one of the options which may be explored is to allow the Smart City SPVs to issue long term tax free bonds as in the case of infrastructure development companies. The potential financing sources could also be diversified by allowing pension funds and insurance companies to invest in Smart City projects. Real estate investment trusts could be an additional source of funds, facilitated through suitable tax-related concessions together with Smart City specific investment guidelines.
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\nThe other issue which would need to be looked into from the Budget 2016-17 perspective is the import duty structure on specific high technology items in various areas like solid waste management, renewable energy, city-wide surveillance and intelligence gathering equipment etc. The duty structure should be such that while it does not deter initial imports, adequate incentives are also built in to encourage quick indigenization and technology transfer. Additionally, since ICT solutions are likely to comprise a significant part of the Smart City investment with most of the demand being met by India based companies, applicability of “deemed export” provisions to such supplies may also be explored to incentivize cost-effective supplies.
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\nFinally, to incentivize timely implementation, all benefits and concessions in the context of Smart City investments should be made available only for a finite time frame. For example, should the Government decide to provide concessions on fees payable on Authorized Capital of the Smart City SPVs, such concessions should only be made available within a limited period (say 6 months) from the time of approval of the concerned Smart City Plan. Similarly, imports of high technology items must also take place within a defined time frame to avail any proposed concession.
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\nAs we can see from the above, the forthcoming Budget presents the right opportunity to facilitate early realization of India’s Smart City aspirations in a financially sustainable manner, while ensuring overall economic development.
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\nArindam Guha is Partner, Deloitte Touche Tohmatsu India LLP. Views are personal. <\/em>\n\n<\/body>","next_sibling":[{"msid":51165230,"title":"Budget 2016: Huawei India seeks tax cut on ICT products and services","entity_type":"ARTICLE","link":"\/news\/budget-2016-huawei-india-seeks-tax-cut-on-ict-products-and-services\/51165230","category_name":null,"category_name_seo":"telecomnews"}],"related_content":[],"msid":51166284,"entity_type":"ARTICLE","title":"Budget 2016 needs to earmark around Rs 5,000 crore under Smart City Scheme","synopsis":"The initial list of 20 cities to be taken up for upgrading to Smart Cities has recently been announced by the Ministry of Urban Development.","titleseo":"telecomnews\/budget-2016-needs-to-earmark-around-rs-5000-crore-under-smart-city-scheme","status":"ACTIVE","authors":[],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2016-02-27 13:14:13","lastupd":"2016-02-27 13:16:28","breadcrumbTags":["Amrut","Solar power","Enterprise Services","smart cities","Swachh Bharat","Budget 2016"],"secinfo":{"seolocation":"telecomnews\/budget-2016-needs-to-earmark-around-rs-5000-crore-under-smart-city-scheme"}}" data-authors="[" "]" data-category-name="" data-category_id="" data-date="2016-02-27" data-index="article_1">
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丹·古
最初的20个城市列表被升级到智能城市最近宣布的城市发展。另一个23个城市得到机会提交修改后的智能城市计划在2016年4月中旬,快速跟踪选项。,政府的智能城市的任务,这是迄今为止在规划阶段,现在进入实现阶段。因此变得很重要在这个阶段,评估投资的本质提出,并确定如何即将到来的预算2016 - 17可以充当催化剂促进这些投资。
仔细看看提交的计划前20个城市表明投资需求的Rs 1500 - Rs 3500卢比的城市。的pan-city解决方案,目的是所有公民受益,占。400 - 800卢比,预期支出在成立平衡解决方案,任何一个连续的区域(至少250英亩)提出了城市的发展。
而提出pan-city解决方案不同城市,最常见的包括信息和通讯技术(ICT)解决方案为公民服务,比如出生和死亡证明的问题,贸易许可证,物业税评估&付款等;应急响应服务;智能交通管理系统、固体废物管理和城市流动的解决方案质量快速运输系统或最后一英里连接。许多这些解决方案的气动固体废物收集和运输系统,传感器交通management-crime跟踪-污染监测系统,后端智能决策系统等涉及高端技术,其中一些可能还需要进口。
基于区域的开发时,城市再开发/重建增加密实度,步行,开放空间;提供基础设施等领域的管道水和卫生设施;采用环境友好的解决方案太阳能发电一代,LED路灯等是最常见的成分。
快速实现是需要时间,即将到来的工会预算需要在智能城市计划拨款5000卢比左右开始的活动在全国50个城市。此外,充足的预算规定下收敛方案Amrut、安全城市,太阳城,Swaach巴拉特等也需要为所选智能城市的城市,以确保实现全面计划。州也有贡献他们的投资份额(1:1的智能城市的使命与其他方案)的比例不同,一个合适的预算协调释放的资金保障机制也可以探索。
增加选择和融资手段的智能城市是需要解决的另一个领域。基于量子基金的要求,必须在中央和国家政府资金补充私人投资,债券和股票的形式。很大一部分的投资提出了用于城市基础设施,其中一个选项可以探索是让智能城市“发行免税债券作为长期的基础设施开发公司。潜在的融资来源也可以多样化,允许养老基金和保险公司投资于智能城市项目。房地产投资信托基金可以额外的资金来源,通过合适的与税收相关的让步与智能城市特定的投资指南。
另一个问题,需要考虑从预算2016 - 17的角度来看是进口关税结构等各领域特定的高技术项目固体废物管理、可再生能源、全市监视和情报收集设备等的责任结构应该是这样的,虽然它不阻止最初的进口,也建立在足够的激励措施,鼓励快速本土化和技术转让。此外,由于信息通信技术解决方案可能包括智能城市投资的一个重要组成部分的大部分需求得到满足由印度公司,“认为出口”条款的适用性等供应也会探索激励有效的供应。
最后,为了激励及时实现,所有福利和让步在智能城市的背景下,投资应该只有有限的时间框架。例如,如果政府决定提供让步佣金支付法定资本的“智能城市,这样的让步只能提供有限的时间内(6个月)的时间关注智能城市计划的批准。同样,进口的高技术产品还必须在定义的时间内利用任何拟议让步。
从上面我们可以看到,即将到来的预算提供了正确的机会促进印度智能城市的愿望早日实现经济可持续的方式,同时确保整体经济的发展。
丹·古是伙伴,德勤印度LLP)。个人观点。
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