Urbanisation in India: trends, opportunities and smart cities

Urbanisation in India: trends, opportunities and smart cities

Opportunities in urbanisation in India

The urban population is growing in India and because of this, opportunities are increasing as well. According to country data, the urbanization in India is mainly due to the expansion of cities and the migration of people. Investments are made in housing, road network, urban transport, water supply, power-related infrastructures, smart cities, and other forms of urban management. This is the bright future the Indian economy has in store for itself.

 

Urbanization in India

Population and economic growth has fostered urbanization in the country and the number of urban towns and cities have drastically increased. This growth is expected to continue in the years to come and India has to step up its game in order to catch up with this kind of change. Investments have to be made in order to better serve the country.

There are several factors at play that have led to the urbanization in India – population growth and migration as one of the 2 major factors. Recently, a third factor has been seen as a huge contributor to the urbanization growth: the expansion of towns and cities. This factor is due to the high economic growth that the city has witnessed over the years. Because of this, the government in India has decided to grab the opportunity: projects to further thrust the country into urbanization, a number of smart cities to be put up in various locations, and other initiatives.

Currently, there are nine major cities in India: New Delhi, Mumbai, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat and Pune. Urbanization begins in these massive cities as each one is teeming with varied businesses, advancement and spatial complications.

Trends supporting urbanisation in India

Here are some key points regarding urbanization and planning in India:

  • Private cities are now expanding due to the support of private companies. Private developers are building private housing projects that will exponentially grow in the years to come.
  • The Delhi-Mumbai Corridor is an infrastructure program set to develop ‘Smart Cities’ and combine next-generation technology with infrastructural development.
  • The transport and logistics sector of India underlines the importance of interconnecting the different modes of transportation: road, rail, sea and air. An efficient multi-modal system is relevant in the development and successful growth of the infrastructural systems.
  • Special Economic Zones dot the landscape of India. Each of these zones is focused on a particular sector such as IT, apparel and fashion, or petroleum and petrochemical industries.
  • Industrial townships are built to house employees close to the factories and manufacturing plants at which they work. After the success of the pioneering industrial township - Tata’s Steel Town - the government is planning on developing more like it.
  • India’s expected economic growth opens up expansion prospects for Indian airports. Domestic and international passengers are inevitably predicted to double in number in the years to come.

Spatial planning in India

There are two types of planning systems laid out in the Indian urbanisation and spatial development agenda to carefully combat the complications and explore the potential of urbanization.

  1. A new institution named National Institution for Transforming India (Hindi: NITI Aayog, Policy Commission) is a new planning system which aims to target cooperation and active participation in the economic policy-making process led by the State governments of India. This NITI Aoyag was made to replace the dated Planning Commission of India.
  2. The central government Urban Development (MoUD), Ministry of Housing and Urban Poverty Alleviation (MoHPA), and the Town and Country Planning Organization (TCPO) will facilitate and support the nationwide urban and regional development planning. These organizations place their efforts on spatial planning for the improvement of the entire country.

India's Seven Mission Program

With the rapid rise of urbanization in India, there is an increase in overall development in the different sectors. Due to this, the Seven Mission Program was founded. This program aims to fund cities to achieve intended milestones.

The Seven Mission Program includes the following plans:

  • 100 Smart Cities Mission
  • AMRUT stands for ‘Atal Mission for Rejuvenation and Urban Transformation’
  • HRIDAY (National Heritage City Development and Augmentation Yojana)
  • Sardar Patel National Urban Housing mission
  • National Mission on sustainable habitat
  • Clean India mission
  • National urban information system

Opportunities in India’s urban infrastructure

In order to face the challenges of urbanization, infrastructures need to be improved. Unfortunately, rapid population growth and a lack of adequate investment is making urban infrastructure growth slow.

Affordable housing in India

India is facing a house shortage in urban areas at the moment and more housing would be required in order to meet future demand. This demand comes from the economically weaker section due to lack of housing policies. Some parts in India have introduced public-private-partnership policies, which have led to the development of housing.

Transport business opportunities in India

Private mode of transport is dominant in India. There is a heavy reliance on private transport that has led to the congestion of roads and increasing commuting time and pollution. Road networks therefore need to increase because of the influx of these vehicles.

On a separate note, public mode of transport is gradually decreasing in terms of popularity.
In an effort to improve the urban transport situation in India, new metro rail networks have been developed.

Water and wastewater management in India

The water supply in India faces several issues and the water and wastewater management in the country needs to be improved. The government though has made initiatives to improve water supplies establishing projects for selected areas.

Sewage and sanitation is also facing a dilemma in India at the moment. Nevertheless, projects to further improve this is currently a work in progress.

Power and power infrastructure requirements in India

Increasing urbanization has led to increasing demand in energy consumption. India greatly needs to increase their power-generating capacity and develop new ways of generating power.

 

Concept cities and smart cities in India

Manufacturing and education have led to the development of concept cities in the country and smart cities are gaining popularity.

Key attributes of smart cities

  • Smart People and Quality Life
  • Smart Governance
  • Smart Economy
  • Smart Environment
  • Smart Technology and Mobility

India's 13 benchmarks for smart cities

The Indian Government’s Union Ministry of Urban Development identified 13 benchmarks for smart cities. These benchmarks include the following:
1. Transport: maximum travel time of 30-45 minutes depending on city size.
2. Spatial Planning: 175 people per hectare along transit corridors.
3. Water Supply: includes covering all households and providing water 24/7.
4. Sewage Sanitation: covers all households.
5. Solid Waste Management: 100% collection and recycling of solid waste.
6. Storm Water Drainage: 100% rainwater harvesting.
7. Electricity: includes covering all households and providing electricity 24/7 with 100% metering, and many more.
8. Telephone Connections: covers all households.
9. Wi-fi Connectivity: covers all cities.
10. Healthcare Facilities: establishment of intermediate and multispecialty hospitals.
11. Education: the set-up of educational institutions.
12. Firefighting: 1 fire station per lakh population/5-7 km radius.
13. Others: renewable energy, green buildings.

The 20 India smart cities

  • Bhubaneshwar, Odisha
  • Pune, Maharashtra
  • Jaipur, Rajasthan
  • Surat, Gujarat
  • Kochi, Kerala
  • Ahmedabad, Gujarat
  • Jabalpur, Madhya Pradesh
  • Vishakhapatnam, Andhra Pradesh
  • Solapur, Maharashtra
  • Davangere, Karnataka
  • Indore, Madhya Pradesh
  • New Delhi Municipal Corporation
  • Coimbatore, Tamil Nadu
  • Kakinada, Andhra Pradesh
  • Belagavi, Karnataka
  • Udaipur, Rajasthan
  • Guwahati, Assam
  • Chennai, Tamil Nadu
  • Ludhiana, Punjab
  • Bhopal, Madhya Pradesh

Metro transport system

As per country data, India's metro conglomerations have a share of only 30-45% of public transport instead of the desired 70%. This has led to a growing interest among Indian policymakers in the relevance of rail-based systems and to sustain an increasing demand to shift to a public conveyance from private modes of transport as the populations in cities expand.  At least 7400 km of metro and subway transport systems will be required.

Hence, the Working Group on Urban Transport of the Planning Commission of India has recommended that cities with populations exceeding 2 million should initiate rail transit projects and cities exceeding 3 million people should construct metro rail systems. The investment for such metro rail projects is estimated at around USD 26.1 billion.

Several plans to develop numerous metro rail systems in major Indian cities have been put in place by the Ministry of Railways and the Ministry of Urban Development in collaboration with state governments. At the last count, 40 plus such projects are under various stages of development or are already operational. USD 12 billion of the approximate USD 50 billion allotted for these projects has already been committed to their development. This has led to the Indian metro sector being ranked as among the world’s biggest ongoing infrastructure programs.

Business opportunities for international firms

As India has comparatively less domestic capability in several specific areas and has to import its products or technology from abroad, international firms have an abundance of opportunity in the following areas:

  1. Design and architecture
  2. Waste management
  3. Signaling and telecommunication equipment
  4. Power and traction
  5. Ventilation and air conditioning
  6. Rolling stock
  7. Automatic fare collection systems
  8. Machine tools
  9. Electrical and mechanical equipment for maintenance

Three of the 40 projects offer a lot of opportunities to international firms in the short to medium-term perspective. They are:

  1. Ahmedabad-Gandhinagar Metro
  2. Jaipur Metro (Phase II)
  3. Mumbai Metro (Phase I Line 3)

These projects offer an approximate value of nearly USD 7.1 billion to investors. International firms who take early advantage of these opportunities will also benefit from other such projects like the Nagpur Metro, Kochi Metro, Hyderabad Metro, Navi Mumbai Metro, etc.

Engaging the services of a professional market research agency will help you benefit from this market opportunity by providing market insights, finding reliable business partners or facilitating access to relevant market players and decision makers.

This entry in Asia was updated on April 30, 2018 by specialist.