States have to pay for Smart Cities

Hyderabad: Greater Hyderabad and Warangal made it to the list of smart cities announced by Union minister M. Venkaiah Naidu on Thursday.

Mr Naidu said that the Centre will release Rs 1 crore to each of the cities for preparation of their smart city plans. The smart cities will get Rs 200 crore in the first year and Rs 100 crore in the next four years.

In all, the Centre will pay smart cities Rs 48,000 crore over five years to improve infrastructure and service delivery by using better technology and e-governance.

State governments and urban local bodies have to provide matching contributions. This is in addition to thousands of crores worth investments expected from the private sector which they will be allowed to recover through “user charges” on infrastructure like water supply or urban transport.

The Union Urban Development ministry has also asked the urban local bodies to prepare a road map for reforms. They have been asked to mobilise external resources and improve internal resource generation to pay for the reforms.

“In a situation such as the recent financial crisis, when private firms are looking for safe investments, I assure them that smart cities are safe investments. Land will be readily available and the returns are assured,” the minister said.

Prof. V. Srinivas Chary, director of urban governance, ASCI, said, “Citizens pay indirect user charges presently. If there is no water, one has to dig a borewell or depend on tankers as the Water Board takes no responsibility. Many would be happy for pay for the service since we can demand it. User charges will bring in greater accountability. But they have to be so designed that the poor do not have to pay. Consultation with citizens is important.”

Mr Naidu also proposed land monetisation as a means to raise resources. Experts say this will be beneficial for both the corporation and citizens.

An expert said that by creating the ORR, the value of land and property surrounding it has gone up.