30 September 2016



The government proposes to develop 100 cities as Smart Cities over the next three years. About 60 cities have been chosen so far, while the process for selection of the remaining 40 cities would start in January. These cities will receive INR 200 crore from the Central Government in the first year and INR 100 crore over the next few years. States have to match this amount and gather funds through public-private-partnership and other schemes. According to some estimates, $1 trillion is needed to fast track projects that are either already underway or are to be launched soon, majority of which is expected to come through foreign investment.

Integrated Services view

The planning of smart cities in India will bring benefits to the country at a vast level providing an opportunity for suppliers to offer better products. Inclusion of Tier II cities and satellite towns of metro cities in the list of smart cities will siphon funding into these smaller cities, improving their overall quality of life. If the Smart Cities Mission is executed with focus and regulation, it will also usher in foreign capital, as investors will have more confidence investing in successful business models. 

Research view

Smart Cities Mission is aimed at creating urbanised spaces that are comparable to international standards not only to improve the quality of life for urban Indians but also to attract foreign investors with state-of-the-art infrastructure and technology. As per our analysis, though the usage of technology in the existing or new built environment may come with its initial share of challenges for developers, but the increasing interest of the citizens and investors towards smart establishments will prove to be an added advantage to them. As smart cities is expected to bring in strong infrastructure and connectivity with technological advancements, it will give a boost to the realty sector. Currently, we see real estate investment potential is mostly seen in Tier I cities, but the smart cities would abet advancement of real estate in Tier II cities as well. Commercial and residential spaces are getting scarce in Tier I cities like Mumbai and Delhi, leading to congestion and higher densities. The upgrade in technology at commercial spaces offering services such as high-speed internet, smart workstations and automated systems along with competitive rates may push some enterprises to expand to Tier II cities. Smart city transport projects will also improve connectivity from Tier I to Tier II cities bringing them closer for business purposes. Residential markets will also thrive if new businesses come in Tier II cities.

Contact for more information

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