With an estimated 700 million Indians1 moving into urban areas between now and 2050, the country will need to build the equivalent of 500 cities over the next four decades, just to keep up with this rapid rate of urbanization. The central government also hopes to drive continued economic growth (at a rate of around 8 - 10 percent) for at least the next thirty years to support this urban boom.
Driving economic growth and urban development
In response, the central government, in partnership with six state governments, created the DMIC to support a two pronged program aimed at both growing the country's manufacturing base and - at the same time - building new cities in which Indians will want to live, work and play.
According to Amitabh Kant, CEO of the DMICDC (and the creative mind behind the 'Incredible India' campaign in his previous role leading the Tourism Ministry), the main challenge for India is to develop cities that are socially equitable, economically viable and environmentally sustainable. So while DMICDC recognizes that many of their challenges are uniquely Indian, they also acknowledge that lessons can be learnt from various projects around the world: they have taken tips on recycling from Japan, waste water treatment practices from Singapore, and models of mass transit systems from Brazil. "Countries that can build cities by using proven best practices from other parts of the world will be able to achieve a quantum jump in the future and will ultimately provide a better city for their citizens to live and work," he notes.
Aligning to a master plan
Planning such a massive project can be extremely complex. That is why Kant's team has focused much of their efforts on developing a strong Master Plan to drive development forward. In part, this involves creating a geographic Master Plan that plots out land use, growth areas and infrastructure for each of the industrial and development zones. But the organization is also looking to integrate the cities with enabling technologies that will propel the urban areas into 'smart cities'. "Particularly in the Greenfield developments where we are working with a blank slate, but also in the Brownfield, we will integrate technology to develop a digital Master Plan that overlays the geographic one, adds Mr. Kant.
And while financing a project of this scope is certainly a major challenge, particularly given the fact that most cities fail to return revenues for the first 12-17 years, DMICDC has developed a number of innovative approaches to close this gap. For one, a development fund has been created between the governments of India and Japan to inject USD223 million to kick-start the project. The program also expects to benefit from rising land values within the development zones to monetize the project and drive revenues to support future growth.
"The process of building new cities in India carries a lot of challenges," admits Mr. Kant. "But it also provides huge opportunities to develop a sustainable growth trajectory that makes a dramatic impact on the quality of life for the expected 700 million people that will enter into the urban arena over the next 40 years".
1Goldman Sachs, Asia Economic Analyst, 6 July 2007