India

There is a compelling need to develop sustainable and technology-driven urban centres, partly as the burgeoning urban population is creating pressure on existing cities and partly to address the growing aspirations of a large neo-middle class that is emerging in the tier-I and tier-II towns in India. As per the Concept Note for Smart Cities, the urban population being around 31 percent of the total population contributes over 60 percent to India’s GDP. It is projected that urban India will contribute nearly 75 percent of the national GDP in the next 15 years. Therefore, with an urban population of 31 percent, India is at a point of transition where the pace of urbanisation is expected to speed up. It is in this context that it becomes critical to plan the urban landscape in a way that is efficient, smart and fosters economic growth.

Missions for urban renewal launched
Kick-starting the urban reforms, the government of India on June 25, 2015 launched the below schemes for improving the urban landscape:

  • ‘Smart Cities Mission’ for 100 cities with an outlay of INR480 billion
  • ‘Atal Mission for Rejuvenation and Urban Transformation’ (AMRUT) for 500 cities with outlays of INR500 billion
  • ‘Housing for All by 2022’

Below are the highlights of newly launched missions.

Smart Cities Mission
Under the Smart Cities Mission, a smart city aspirant will be selected through a city challenge competition intended to link financing with the ability of the cities to perform to achieve the mission objectives. Under the smart cities initiative, focus will be on core infrastructure services such as adequate and clean water supply, sanitation and solid waste management, efficient urban mobility and public transportation, affordable housing for the poor, power supply, robust IT connectivity and e-governance. The smart cities would be developed by an SPV to be created for each city, and state governments will ensure steady stream of resources for such SPVs.

Atal Mission for Rejuvenation and Urban Transformation (AMRUT)
This mission will be implemented in cities and towns each with a population of one hundred thousand and above and will also include some cities situated on stems of main rivers, a few capital cities and important cities located in hilly areas, islands and tourist areas. It adopts a project approach to ensure basic infrastructure services relating to water supply, sewerage, storm water drains, transport and development of green spaces. Implementation of this mission will be linked to promotion of urban reforms such as e-governance, constitution of professional municipal cadre, devolving funds and functions to urban local bodies, review of building bye-laws, improvement in assessment and collection of municipal taxes, credit rating of urban local bodies, energy and water audit and citizen-centric urban planning.

The central assistance towards AMRUT will be to the extent of 50 percent of project cost for cities and towns with population of up to 1 million and one-third of the project cost for those above 1 million. This amount will be released in three instalments in the ratio of 20:40:40, based on achievement of milestones indicated in state annual action plans.

Housing for all by 2022
This project will disburse about INR3000 billion in the next seven years for construction of 20 million affordable houses in urban areas for slum dwellers, low income groups and economically-weaker sections. An interest subsidy of 6.5 percent on housing loans with 15 years tenure will be provided under this scheme.

Funding options
The nodal agency for the smart city project is the Ministry of Urban Development, Govt. of India, besides the state government and the Urban Local Bodies being other key participants. The government continues to look for other sources of funding besides the budgetary allocation and it is already in advanced talks with the governments of United States, Spain, France, Germany and Sweden for the development of smart cities.

Conclusion
With various countries and large corporations evincing interest in India’s smart cities, these are exciting times for all the stakeholders. India being what it is with its myriad complex political, social and environmental realities, it is advisable that the foreign investors assess the regulatory, tax and other risks involved in such projects before making a foray into India.

Clasis Law
14th Floor, Dr Gopal Das Bhawan,
28, Barakhamba Road, New Delhi 110 001, India
Tel: (91) 11 4213 0000 / Fax: (91) 11 4213 0099
Email: vineet.aneja@clasislaw.com
parul.kashyap@clasislaw.com
www.clasislaw.com

Related Articles by Firm
Radical changes in the Foreign Direct Investment regime
INDIA- It is observed that India has the potential to attract even more foreign investment which could be achieved by liberalising ...
Mare Maritime Singapore Pte Ltd Vs. M.T. Everrich 8 [Notice of Motion (L) No. 2418 of 2015 in Admiralty Suit No. 854 of 2015]
Background: The owners of EVERRICH 8 (the Vessel), through their subsidiary Yuanland Ltd, entered into voyage charterparty with Rakha Al Khaleej International LLC ...
India's The Arbitration and Conciliation (Amendment) Ordinance, 2015 makes major changes to the Arbitration & Conciliation Act, 1996
The Arbitration and Conciliation (Amendment) Ordinance 2015 gives the necessary impetus for ease of conducting arbitration in India and enables speedy settlement of commercial disputes.
Multiple lenders = multiple stamping
On August 11, 2015 the division bench of the Supreme Court of India overturned a full bench decision of the Gujarat High Court in the matter of Coastal Gujarat Power Limited v. Chief Controlling Revenue Authority....
Indian patent office revokes Hoffman-La Roche’s ‘Valganciclovir’ patent
The Controller of Patents (India) recently revoked the patent granted for the anti-retroviral drug ‘Valganciclovir’ used for treating active cytomegalovirus retinitis infection (CMV) ...
Highlights of the Companies (Amendment) Act, 2015
The Companies (Amendment) Act, 2015 (Amendment Act), which aims to amend the rigidities of the Companies Act, 2013 (Act), has ...
India - Projects, energy and infrastructure update
Including: Long-term infrastructure bonds;Smart cities mission and urban rejuvenation scheme; Railways to e-auction re-development of stations; New hybrid annuity model of PPP for the road sector; Shell set for global acquisition of BG; and IFC signs master co-operation agreement ...
The New Land Bill – ground reality
The Right To Fair Compensation And Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 (2015 Bill) was …
Prima Facie Validity of a registered trade mark in India – A strong but rebuttable presumption
The Indian trademarks law recognises both statutory as well as common law remedy to protect the rights of the proprietor of a trade mark. However, it is well-known that …
Insurance Laws (Amendment) Bill passed as ordinance in India
The long-awaited Insurance Laws (Amendment) Bill (the Bill) has become a provisional law in India. The Bill, which could not be passed in Parliament in its winter session, was promulgated by the President …
Need for uniform stamp duty incidence across all States of India
‘Stamp Duty’ is a tax levied on an instrument by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded …
‘Make in India’ campaign: Opportunities for investors
With a vision of leading the economy towards a path of high sustainable growth, the Prime Minister of India on September 25th, 2014 launched the ‘Make in India’ campaign. Through the …
Bumpy road ahead for vehicle manufacturers in India – pulled up by the competition watchdog
South Asian markets are one of the fastest growing markets for vehicle manufacturers worldwide. However, doing business in South Asia has its own challenges. The anti-monopoly watchdog of India …
Introduction of real estate investment trusts in India
The Real Estate Investment Trusts (REITs) in India have been in the news for some time. The World Bank1 describes REIT as a security sold to investors for the purpose of investing in real estate. REITs …
SC Larger Bench decision in case of Kone Elevators – distinction between ‘contracts of sale’ vis-a-vis ‘works contract’
The Constitutional Bench of the Hon’ble Supreme Court (SC), over-ruling the earlier decision of three-member Bench re State of A.P. v. Kone Elevators (India) Ltd1, has held that the activity of manufacturing, …
Companies Act, 2013 – implications for investors
One of the recent initiatives of the Indian Government towards ensuring sustainable economic growth and improving investment climate is enactment …
India Update, inc. Medical device controls
An overview of how and where regulatory controls apply to medical devices in India. Plus: key judgements passed by the Hon’ble Supreme Court; changes in corporate and commercial matters; and case laws in indirect taxation.
Related Articles
Related Articles by Jurisdiction
Prima Facie Validity of a registered trade mark in India – A strong but rebuttable presumption
The Indian trademarks law recognises both statutory as well as common law remedy to protect the rights of the proprietor of a trade mark. However, it is well-known that …
India: The ‘single economic entity’ defence
Although India’s competition law framework is in its early stages, the Competition Commission has reviewed several cases where the ‘single economic entity’ defence has been raised. Ritika Ganju and Ankur Verma of Phoenix ...
Latest Articles