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The concept of Smart Cities may go to the seed!

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The much talked progressive Smart City projects may go the Jawaharlal Nehru Natonal Urban Renewal Mission way  as the local self bodies may not be able to fulfill the ten percent funding contribution requirement  laid down in the union government guidelines.Building smart cities may be a mere pipe in many cases as a sizeable chunk of the cities chosen as future smart cities are struggling with paucity of funds and lack adequate infrastructure.The biggest reason why the smart city idea may not bear fruits immediately is that the local municipal authorities will have to generate 20 percent share besides begging 40 percent from the state government to pocket the remaining 40 percent union government share.

Shimla which happens to be India’s oldest Municipal Corporation and has been put in the list of proposed smart cities also do not have adequate funds to provide the basic amenities like water,parking and sanitation to its residents.The hill city Municipal Corporation generates a revenue of Rs 165 Crore per annum out of which Rs 40 crore are spent on providing drinking water which is already in a short supply.The salaries of staff consumes another 50 crore.The remaining Rs 75 crore is just a drop in the ocean.The wear and tear,health,development and other heads consume the budget in the middle of the financial year.A resource crunch had forced the MC Shimla to levy green tax on the tourists.

“The scenario is worse than the JNNURM which had asked the Local Self Bodies to fund just the 10 percent share of a particular project .When we could not fulfill the 10 percent requirement how they (union government) are expecting us to bear the 20 percent cost.What about the remaining 40 percent state government share ?The government which hardly releases the development funds will not be ready to shell out the 40 percent,” Deputy Mayor,Simla Municipal Corporation, Tikender Panwar said.Another hurdle in the path of Smart City projects could be the poor financial ratings or absence of ratings.The local self bodies may not be able to borrow from agencies as they lack the credit ratings.The local self bodies though have an option to manage funds by introducing municipality tax free bonds but that requires AAA and A+ ratings.In other words the municipal corporations who are financially sound and can pay the matured bonds even if they fail to collect adequate taxes may get the ratings.

However, this is not to say that the Municipal Corporations like Shimla not getting funding support from the funding agencies.Shimla MC has been successful in getting funding from the World Bank in the ratio of 90:10. The funding model has encouraged the Shimla MC authorities to raise a World Bank loan worth Rs 640 crore.“Though ideologically we are against international funding agencies like the World Bank but practically speaking it is even better than the union government. We failed to get funding under JNNURM and also may not get the same under the Smart City project as generating additional revenues to fulfill the funding share requirement could be a herculean task.Our focus is not IT and digitization but the mobility and water ,” says Tikender Panwar.The state government authorities say they have a revenue model to sustain the Smart City project but  the Smart City guidelines were received late which has delayed the process of preparation of project reports.“We are drafting the plan and do have the revenue model but need little time to comment as the union government guidelines were received late.The project plan will be submitted in due course of time,” Additional Chief Secretary, Urban Development and Health , Himachal Pradesh, Vineet Chaudhary said.

Source: indiatoday

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