Need of Vital Technologies to meet Government’s vision of 100 smart cities
Finance Minister Arun Jaitley announced several initiatives to boost the technology space in his maiden Union Budget.
It will allocate Rs 500 crore for its ‘Digital India’ initiative to set up broadband network in villages and promote local manufacturing of hardware and Indian software products.
Under the Digital India initiative, National Rural Internet and Technology Mission, the government will focus on setting up broadband in villages, promote local manufacturing of hardware and Indian software products. A special focus will be on supporting software products startups.
Also in what could provide more opportunities for the technology firms, the Minister proposed to set up 100 smart cities for which the government will provide Rs 7,060 crore.
Budget adds digital Flavor that will be big boost to Indian economy. Many IT industry leaders, analysts cheer Modi govt’s first budget. Modi’s maiden budget has emphasised a strong focus on leveraging technology to drive the nation and bring in transparency within governance. The Budget allocated 500 crore for the massive Digital India initiative, 100 crore for setting up virtual classrooms and 100 crore for promoting ‘good governance’ through IT, aimed at simplifying citizens’ access to public services.
Here are some interesting announcements for the technology and telecom sector…
- Effective steps to be taken to revive SEZs
- To introduce e-Visa in nine airports
- All govt departments to be integrated through e-platform by the end of this year
- To introduce e-Biz platform by the end of this year
- Proposes Rs. 500 crore under the “National Rural Internet and Technology mission”
- Allocates Rs. 7,060 cr for 100 smart cities
- Manufacturing units will be allowed to sell products through e-commerce platforms without any additional approval
- To establish technology centre network to promote innovation, entrepreneurship with a proposed fund of 200 crore
- Solar power units, smart card components, mobile phones, computers, LCD and LED monitors below 19” to be cheaper
Electronics Manufacturing need a Boost
The electronics industry is the largest and fastest growing manufacturing industry in the world and India being one of the fastest growing consumer markets is currently consuming electronics worth billions of dollars.
Domestic manufacturing has been successfully contributing to economic growth in countries around the world. However, with India, the manufacturing capabilities are lagging behind due to several challenges and has not kept pace with the consistent growth in demand.
With the new government now in power, the Indian electronics manufacturing agenda needs to be at the heart of all reforms to create a sustainable ecosystem for this sector. Manufacturing in India will receive the desired boost once the policies suggested to the government are acted upon. With a large domestic market, India is uniquely suited to attract huge investments into manufacturing and our needs in sectors like education, government social sector projects, UID, telecom, and strategic sectors like defence, etc, itself will present huge opportunities.
In order to give the required boost to Indian manufacturing and move up the global value chain, the government will have to become accountable at all levels to get past the hurdles in the country’s growth towards becoming the next electronics hub. We need to create an ecosystem that can create high value addition and differentiation for India. The objective should be to not just cater to the domestic demand for hardware manufacturing but also act as an export hub. Also, focus needs to be on encouraging innovation and entrepreneurship to give the desired impetus and move on to an advanced level of manufacturing acquiring and developing new technologies.
Budget Reactions
Ravi Swaminathan, managing director, AMD India
“We welcome the announcement for the IT sector, the budget looks very pragmatic and realistic. The government has pledged to support the growth of domestic information technology capabilities in both hardware and software, focused on enabling the timely delivery of citizen services and creating new jobs opportunities, especially in rural areas.
The FM talked about Smart Cities and Digital India which clearly speaks about government’s intention to go aggressive in developing the nation by taking help of technology. It recognises the role of technology in creating a citizen centric governance framework.”
“Talking about the micro – Exemption on all inputs/components used in the manufacture of personal computers from 4 percent special additional duty (SAD) would help revive the subdued demand and promote domestic manufacturing in the country.”
Koichiro Koide, managing director, NEC India
“We are happy with the Union Budget 2014-15 presented by the new government focuses on growth and development. The budget depicts the government’s effort in promoting the use of new technology and integration of technology across sectors.”
“We welcome government’s decisions of allocating Rs 7,060 crore for development of 100 smart cities and modernisation of satellite towns in the country, and an additional allocation of Rs 3000 crore towards modernisation of police departments. This will promote investments in use of modern technology, making our cities smarter and safer. The government’s intent on giving infrastructure a boost gives us an opportunity to work with various bodies and organisation to develop a safe and secure social infrastructure for the people of the country.”
The commitment to develop e-visa facilities at nine airports, and encouraging departments and
Arup Roy, Research Director, Gartner India
“Overall I would view this budget to have a positive push to industries across the board and augurs well for IT industry as well. This budget focuses clearly on growth, development and job creation with particular focus on infusing growth in manufacturing and infrastructure sectors. From industry perspective, the policies that would have major positive impact on the domestic IT uptake are: ‘Digital India’ program; “Good Governance”; and “one hundred smart cities” program. Also, FDI cap increase in defense and insurance sector is a huge positive and has direct bearing on IT industry.”
Modi Technology Mission
Under the Digital India initiative, National Rural Internet and Technology Mission, the government will focus on setting up broadband in villages, promote local manufacturing of hardware and Indian software products, Finance Minister Arun Jaitley said while presenting the Budget for 2014-15.
The Prime Minister has a vision of developing 100 smart cities as satellite towns of larger cities and by modernising the existing mid-sized cities. With development reaching an increasingly large number of people, the pace of migration from the rural areas to the cities is increasing. The new cities should be developed to accommodate the burgeoning number of people, otherwise, the existing cities would soon become unlivable, announced in the budget.
“To encourage development of smart cities, requirement of the built-up area and capital conditions for FDI is being reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million, respectively with a three year post completion lock in,” the Minister said.
He added that projects committing at least 30 per cent of the total project cost for low cost affordable housing, will be exempted from minimum built up area and capitalisation requirements, with the condition of three year lock-in.
Get to act Smart Cities Vision
In order to convert the existing Indian cities to Smart Cities, the government has provided many avenues to raise funds. These include Rs 7,060 crore in the current fiscal as seed funding from budget allocation. To encourage development of the Smart Cities, requirement of the built-up area and capital conditions for FDI have been reduced from 50,000 sq m to 20,000 sq m and from USD 10 million to USD 5 million, respectively, with a three year post-completion lock-in period.
For the exisiting cities of the country, the budget proposes to raise the principal of Pooled Municipal Debt Obligation Facility from Rs 5,000 crore to Rs 50,000 crore with the extension of the facility by five years to March 31, 2019. Also, the planning of metro projects for every city of India with more than two million population has also been proposed.
The government has spelt out certain transit corridors along which the Smart Cities will evolve. The Amritsar-Kolkata Industrial master planning will be completed expeditiously for the establishment of the industrial smart cities in seven states of India. The planning of three new Smart Cities in the Chennai-Bangalore Industrial Corridor region, viz., Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka will also be completed.
The Bangalore-Mumbai Economic corridor (BMEC) and Vishakhapatnam-Chennai corridor would also be completed with the provision for 20 new industrial clusters.
However, industry players say that the central government will have to set up a strong mechanism to implement what they have started.
Currently, urbanisation is limited to a few cities and large economic pockets. Spreading them evenly around the country is good to control urban sprawl and will ensure quality of life in urban pockets.
While the intention of the government behind the Smart Cities looks good, it remains to be seen how this vision of PM Narendra Modi will get off the ground.
IDC VP & General Manager Jaideep Mehta believes,” It will not just push the frontier of urbanisation in India but also create a new set of markets for tech players across the industry spectrum. “We estimate a minimum of Rs 2,000 crores flowing into the technology sector on the back of this initiative,” Mehta said.
On the other hand, Sunil Lalvani, MD, BlackBerry, India said that M2M technologies would be vital to realise the government’s vision of 100 smart cities. “We believe this is a positive sign that will transform the standard of urban living, as IoT becomes a reality,” he explained.
“The Indian government’s clear focus on addressing urbanisation and building Smart Cities will drive significant investments across hardware, software and services,” added Manish Bahl, vice president and country manager for India, Forrester Research.
According toVishal Dhupar, Managing Director, South Asia – NVIDIA,“We welcome the proposed allocation of INR 7,060 crores by the government for the development of 100 smart cities. The government’s ambition for modernising mid-sized cities will undoubtedly require precision planning and effective disbursement of budgetary funds, and we believe that technology will play a crucial role in enabling this development. As a visionary in visual computing, NVIDIA believes that India has the chance to leapfrog the use of the right technical and supercomputing technology in planning and executing on the Smart Cities vision.
Flawless execution of the Smart Cities vision will require massive computing power to achieve smarter real-time video surveillance, traffic management, emergency response, satellite imagery, seismic modelling, utilities, civic amenities, biometrics and image processing and anti-terror measures. GPU and supercomputing technology can help the Indian government to overcome challenges of cost-effectiveness and energy-efficiencies. And, NVIDIA looks forward to supporting the government in its vision of building 100 smart cities.”
