Group No - 1

Abhishek Agarwal – 1A
Abhyudaya Bharadwaj – 3A
Ashok K Ponniah – 12A
Ayush Verma – 13A
Rohit Chandra – 57A
Need for Smart City
❖ Cities accommodate nearly 31% of India's current population
and contribute 63% of GDP (Census 2011).
❖ Urban areas are expected to house 40% of India's population
and contribute 75% of India's GDP by 2030.
❖ This requires comprehensive development of physical,
institutional, social and economic infrastructure

Objective is to promote cities that provide -

❖ core infrastructure and give a decent quality of life to its
citizens,
❖ a clean and sustainable environment
❖ application of 'Smart' Solutions.
❖ Sustainable and inclusive development,
❖ create a replicable model which will act like a light house to
 Core Infrastructure
❑ Adequate water supply,
❑Elements
Assured electricity supply,
❑ Sanitation, including solid waste
management,
❑ Efficient urban mobility and public
transport,
❑ Affordable housing, especially for
the poor,
❑ Robust IT connectivity and
digitalization,
❑ Good governance, especially e-
Governance and citizen
participation,
❑ Sustainable environment,
❑ Safety and security of citizens,
particularly women, children and
the elderly, and
❑ Health and education.
Govt. of India Smart City Mission - Launched in 2015
Cooperativ
Integration, Technology
Fundament e and
Citizen at More from Innovation, as means Convergen
al Competitiv
Core Less sustainabili not the ce
Principles: e
ty goal
federalism

Centrally Sponsored Scheme

(CSS) and the Central An equal amount, on a
Government proposes to give matching basis, will have to be
Mission will cover 100 cities
financial support to the contributed by the State/ULB;
and its duration will be five Total Mission funds are Rs 2.05
Mission to the extent therefore, nearly Rupees one
years (FY2015-16 to FY2019- Lakh Crore
of Rs. 48,000 crores over five lakh crore of Government/ULB
20)
years i.e. on an funds will be available for
average Rs. 100 crore per city Smart Cities development.
per year
Out of a total of 7,821
Nodal Ministry – projects worth Rs. 181 lakh
Ministry of Deadline – crore, 5,343 projects worth
housing and Extended to June Rs. 1 lakh crore have been
urban affairs 2023 successfully finished.

Implemented Developing 100 So far, out of the total Rs.

through SPV at selected city as 48000 crore for the mission,
city level smart city Rs. 36,561 crore has been
released and out of this 90%
of the fund has been utilized
by the cities.
 City-level Economic Activity – Assessing factors/Indicators
Indicator Reporting Metric Data Source
Population Projected Net addition to workforce [in age group: 15 to 59 Census of India (Classification of
years] workers by age group is available at
District Level*)

Agriculture Sales at Mandis/markets Agmarket (Ministry of Agriculture and

Farmers Welfare)

Industries GST returns filed/TDS deducted Commercial Tax

Department/GSTN/Income Tax
department

Electricity Electricity charges collected by utilities Respective City Municipal Corporations/

Municipal Bodies and
DISCOMs

Water Total water consumption by consumer category Respective City Municipal Corporations/
Municipal Bodies, Water Board

Communication No. of new telephone/mobile connections (industrial and Telecom Regulatory

2013-2014Authority
2017-2018of India
residential) (circle-wide data)
 City-level Economic Activity – Assessing factors/Indicators
Indicator Reporting Metric Data Source
Trade Inter-State Movement of Goods- Freight transport Respective state’s Commercial Tax
(Using GST E-WayBill data) Department

Real Estate Property Registration Data (Residential and Commercial) Municipal Corporation
(Registrations)*

Automobile New vehicle registrations (an indicator for vehicle sales) Regional Transport
Office/Automobile Associations

Education Enrolment at Primary Level MHRD

Enrolment in Higher Education Institutes

Water Total water consumption by consumer category Respective City Municipal

Corporations/ Municipal Bodies,
Water Board

Communication No. of new telephone/mobile connections (industrial and Telecom 2013-2014 2017-2018
Regulatory Authority of
residential) India (circle-wide data)
Ways of calculating
GDP
1. Expenditure Approach – total spending on all final good and services C+I+G+(X-M)
2. Income Approach – adding up income received by all factors of production
3. Value added approach – value/price of final goods and services are added and value of intermediate is
subtracted
CITY GDP

Top-down approach: In the top-down approach, city level GDP is calculated as a proportion of the national or
sub-national GDP.
• The decision on the proportion to be used for this apportioning is the differentiating factor between
methodologies.
• For instance, US Bureau of Economic Analysis (BEA) uses the city’s share of state-level incomes (wages
and salaries of employees and proprietors’ incomes) to apportion state GDP to metropolitan cities

Bottom-up approach: The bottom-up approach requires adding up income, expenditure or output of each
economic agent (such as households, firms, government and non-profit sectors) to arrive at the aggregate GDP
measure.
• In essence different branches/units of economic activity needs to be separately and uniquely measured and
added up to arrive at the macro figure.
• It implies use of primary or survey data as well as household or establishment census data to arrive at
various sectoral estimates
This would be a highly data intensive exercise
 Challenges

While GDP can be

measured in terms of
income, expenditure
• Broadly in India, GDP for most of the
or production commodity producing sectors is
approach, a estimated using production approach
combination of • For services it is predominantly
approaches is income approach.
typically adopted by • Expenditure approach is used
practitioners given sparsely, mostly suited for
data challenges and manufacturing or construction
suitability of
measures in a
sectors.
particular context.
Broad approach Challenge - 1
• Top down approach using population/ employment data (overall or by sector): apportions the state/ provincial GDP to cities based on the
cities' share in population or total workforce in the state.

Use by agencies
• UNHABITAT: As part of its framework to calculate a ‘City Prosperity Index’, the organisation recommends the computation of a ‘City Product
per Capita’. This requires a ratio of city employment in a sector to national employment to be calculated. This ratio is multiplied with the
national GDP of that sector. This is repeated for each sector, and the resultant numbers summed up to arrive at the figure for ‘City Product’.
This is then divided by the city’s population to arrive at per capita figures.
• OECD: Socio-economic data is available for OECD countries at TL2 (large-regions) and TL3 (smaller area) levels. The organisation defines an
urban area as a densely inhabited 'core' and a 'commuting zone' whose labour market is highly integrated with the core. This may include more
than one municipality. GIS techniques are used to map municipalities to sub-national regions (T3) of which they are a part and for which GDP
data is available.
• This T3 level GDP is apportioned to the municipality based on its share of T3 level population. Thus, apportioned GDPs of the different
municipalities are summed together to achieve the GDP of the corresponding urban area.

Used in academic or research studies

• Mitra and Mehta (2011): Use the UNHABITAT framework for calculating urban areas GDP, with one adjustment. To the sector-wise urban GDP
derived using the UNHABITAT method, they multiply the ratio of urban wage to all- areas wage. This adjusts for the productivity differential in
urban areas. Given that at the city level, wage data is not available, adjustment is done using the city Work Participation Rate (WPR).
• Aguilera et al (2018): Estimate the Gross Value Added for Spanish cities by using data on employment and wages. They estimate two ratios at
the regional level. One, is ‘Apparent Labour Productivity’ (ALP) which is the ratio of the GVA to employment. The second is the Average Wage
which is the ratio of remuneration to the number of salaried employees. They then regress the ALP on the Average Wage to estimate the
relationship between the ratios at the regional level. Using this relationship, and city level data on Average Wage, they find the corresponding
city level ALP, and thus the GVA.

Learnings from this study

• We propose to use a variant of this method for this study whereby the labour input is taken as a key parameter.
Broad approach
•Top down approach using sectoral income data:
apportions the state GDP to cities based on the cities'
share in sector wise incomes (i.e., wages and salaries,
operating profits, rents and interest)
Use by agencies
•US Bureau of Economic Analysis (BEA): uses earning
statistics, obtained through its Local Area Personal
Income (LAPI) dataset, to allocate GDP to metropolitan
areas.
•Earnings consist of wage and salary
disbursements, supplements to wages and
salaries, and proprietors’ income.
•Representing over 60 percent of GDP by industry,
earnings are considered to be reasonable
indicators of relative levels of economic activity
for most industries across geographic areas.
Learnings from this study
•The industry wise incomes so derived are
then compared to provincial income to
GDP ratio, and then city GDP arrived at,
accordingly.
•In India, as documented in EIU (2018),
income data is not adequately available
to adopt this approach.
Challenge - 2 Use in academic or research studies
•Barreca et al (2012): estimate parish level (a small
administrative district) GDP for Louisiana state of USA,
using the BEA method where they find the ratio of parish
earnings to state earnings and multiply with the state GDP
to arrive at the parish level GDP. This is done separately for
each industry.
•If parish level data on earnings is not available for a
sector the share of parish employment in state
employment is used to apportion state GDP.
•This is done separately for each industry. If parish
level data on earnings is not available for a sector
the share of parish employment in state employment
is used to apportion state GDP.
•Kosareva and Polidi (2017): Use employee compensation
in the city to calculate its GDP in Russia.
•They assume that the ratio of compensation of
employees to GDP in a city equals the average of the
corresponding ratios for the country and Moscow.
•The absolute level of city-wise compensation of
employees is available, so they scale that up
proportionately to arrive at city GDP.
•Brown and Rispoli (2014): Canada has firm level data on
compensation of employees and operating surplus. The
authors allocate this to a given city depending on the
location of the firm.
•If the firm has a single location, then all of the
compensation of employees and operating surplus is
allocated to that city.
•If the firm has offices in multiple locations, the total
compensation and surplus is allocated based on
share of firm’s total employment in that location.
•For non-business sector, labour income earned
by government and non-profit sector
contained in censuses are used.
 Challenge - 3
Broad approach

•Top-down approach using expenditure data

Use by agencies

•While estimating GDP for certain sub- sectors, CSO as well as DES at the state level use the expenditure method
for estimation of GVA. For example, while calculating the state level GVA for firewood sub-sector (under the
‘Forestry and Logging’ sector), total value of firewood is estimated by multiplying per capita firewood consumed
with population and price of the reference year. Bottom up approach is followed at the state level.
•Similarly, in calculating district level firewood sub-sector GVA, the DES apportions state level GVA based on the
district-wise consumption rates, available in the NSS Consumption Expenditure Survey (CES) as a top down
approach.

Use in academic or research studies

•Mitra and Mehta (2011): The authors use the UNHABITAT framework for calculating urban areas’ GDP (i.e.
multiply the GSDP with the ratio of urban areas’ workforce to total workforce), with some adjustment for the
productivity differential between urban and rural areas.
•One way in which they do this adjustment is by multiplying the ratio mentioned above with the share of average
monthly consumption expenditure of urban areas in that of all areas.

Learnings from this study

•This approach assumes that household expenditure forms a majority of the expenditure at the city level. It also
does not provide any information on the economic structure of the city.
 Challenge - 4
Broad approach

• Bottom up approach: building up of consistent regional accounts at the city level

Use by agencies

• Statistics New Zealand: uses a 'blended approach' to measure metropolitan GDP so

that economic activity is allocated to regions by directly measuring the activity of
local units (through enterprise surveys) and building up regional accounts. The
methodology is consistent with national estimates such that sum of GDP of regions
equals national-level GDP. For regions/ industries not sampled as part of the
enterprise survey, top down approach is used. GDP is allocated to regions by using
an 'appropriate regional indicator' to derive regional ratios which are then applied
to national industry GDP.

Learnings from this study

• This would be a highly data intensive exercise. India’s household and enterprise
survey data needs to capture all the elements that are required to estimate the city
GDP.
 Step 1: Obtain state-wise GSDP data

District GDP for manufacturing sector is typically calculated by apportioning the state level GDP to
This is subject to data availability, by compilation category for organized and unorganised sectors.
the districts on the basis of their share of industrial workers or share in value of industrial output.

Step 2: Split the GSDP into ‘rural’ and ‘urban’ components

The approach suggested to estimate the city GDP
is a top-down ‘labour input’ approach.
Essentially, the labour productivity (GVA per
worker) is multiplied by the number of sectoral
workers to arrive at sectoral GDP estimates. Once we have the organised and unorganised
sector GSDP data, at the state level, by This will be done by the labour input method
►While the broad approach is based on ‘labour compilation categories, we need to split each using employment and value added per worker
input’, there may be specific variations at sector by rural and urban shares.
places depending upon sectoral or data issues.

Step 3: Arrive at per worker Urban GSDP by economic activity

After getting the urban GDP of the state, per worker urban GSDP will be calculated by dividing the
urban GSDP with the number of urban workers.
►The urban workforce for the latest year will be calculated by applying the worker participation
The multipliers will be applied on state GSDP data for the latest year to obtain the urban GSDP of the rate (WPR) 2011-12 on the projected state population for the latest year.
state for each compilation category.

Step 4: Arrive at city GDP by economic activity

After getting the per worker urban GSDP, we will multiply it with
the number of city workers to get the city GDP for each
compilation category in organised and unorganised sector and
finally sum it up to arrive at aggregate city GDP.
►There may be sample size issues while calculating the city
workforce. To overcome the problem, we may pool the center
and state sample to make it a sizable sample size for estimation.
Spatial differences in productivity between different cities may
not be fully captured through the above method, even though the
difference in lieu of city workforce and rural - urban sectors will
be captured.
►To overcome this challenge, we propose to calculate an
adjustment factor by using a ‘Productivity Differential Index’.
Numerous factors affect productivity differentials between cities.
These may be cultural, social and ethnographical factors as well
infrastructure (physical and social), skill and type of workforce,
type of enterprises (own account enterprises and establishment),
ownership of enterprises (state owned or privately owned),
industry group etc.
►There are tangible factors (visible/measurable) and intangible
factors (difficult to measure like cultural bias) that come to play.
►There is no way one can capture all these aspects.
►Even if for the time being we set aside the soft factors,
productivity differential due to nature of enterprise and physical
and social infrastructure could be captured.
High correlation between economic growth and urbanisation
does not necessarily indicate causation.

That is, studies have been unable to confirm if urbanisation

leads to economic growth or vice-versa.
3 States with low per capita incomes also have
smaller shares of urban population.

For example, Bihar, Uttar Pradesh, Madhya Pradesh recorded

the lowest per capita Gross State Domestic Product (GSDP) in
2011 and rank 27th ,23rd and 15th in terms of urban share of
population (Census, 2011) amongst the 28 states.
 Top 10 Indian cities as per GDP contribution
Based on the available data from various sources, here are the top 10 Indian cities ranked by their contribution to the
national GDP (as of 2021):
1. Mumbai - With its financial institutions and thriving industries, Mumbai contributes around 6.16% to India's GDP.
2. Delhi - The national capital contributes around 4.94% to the GDP, with its services and manufacturing sectors.
3. Kolkata - Being a major industrial and commercial center, Kolkata contributes about 3.6% to the national GDP.
4. Bangalore - The IT hub of India contributes around 3.5% to the GDP, with its rapidly growing technology and service
sectors.
5. Chennai - Known for its automobile and manufacturing industries, Chennai contributes approximately 2.6% to the
GDP.
6. Hyderabad - The city contributes around 2.4% to the GDP, with its IT, pharmaceutical, and biotechnology industries.
7. Pune - With its automotive and IT industries, Pune contributes about 2.2% to the national GDP.
8. Ahmedabad - The city contributes around 1.7% to the GDP, with its textile, chemical, and engineering industries.
9. Surat - Known for its diamond and textile industries, Surat contributes approximately 1.6% to the GDP.
10. Visakhapatnam - The city contributes around 1.2% to the GDP, with its heavy industries, steel plants, and ports.

Please note that these figures and rankings might vary slightly depending on the source of data and the year of reference.
 State GDP at a glance
State/union territory GSDP (US$ billions)
GSDP (US$ billions)
Maharashtra * 350 400

Tamil Nadu * 230

350
Uttar Pradesh * 210
Gujarat * 200 300

Karnataka * 200
250
West Bengal * 150
Rajasthan * 130 200

Andhra Pradesh * 120

150
Telangana * 120
Madhya Pradesh * 120 100

Kerala * 110
50

Delhi * 100
Haryana * 98 0
* * * t* * l* * * * * * i* * r* *
tra a du esh ra ka ga han sh a na sh ral
a
elh na ha s ha
as
h N ad uj a
at a
en s t
ad
e
ng ad
e
Ke D rya B i
di
Bihar * 74 har m
il
r Pr G arn
s tB aja Pr ela Pr Ha O
a Ta ta K e R ra T
hy
a
M Ut W
n dh d
a
Odisha * 69 A M
 City GDP at a glance
Indian cities GDP - 2022 (US$ billions) GDP in 2022 in USD Bn

Mumbai 350
310
Delhi 300
293.6
Kolkata
150 250

Bangalore
110 200

Chennai
78.6 150

Hyderabad
75
100

Pune
69
50
Ahmedabad
68
0
Surat ba
i
el
hi t a
or
e
n ai a d n e a d r at am
59.8 lka al en ab Pu ab Su n
um D
Ko n g h e r
ed at
M
Ba
C yd m ap
H Ah kh
Visakhapatnam isa
V
48.5
 Major Challenges
1. Spatial productivity differentials: It is observed that cities may exhibit differential productivity level depending
upon the nature of industry, level of infrastructure development as well as availability of various intermediate
inputs etc. Therefore, it should be taken into account in the study
2. Sample size: It is observed that sample size may be small for various cities in the NSSO data. Therefore, adequate
sample must be taken into account.
3. Organised and unorganised sector: Some experts observed that a differentiation between these sectors may not
be necessary for this exercise; while others commented that bringing out such differences may be a critical
aspect.
a) For example, organised and unorganised sectors face differential scale and technical efficiencies. Finance which is a core
requirement to grow a business is not evenly distributed or available in the similar fashion to organised and unorganised
sectors. Therefore, there may be some differences in productivity between organized and unorganized sector.

4. Using District GDP data for city GDP construction: It is observed that instead of taking state GDP, we can possibly
look at district GDP and use appropriate measures to distribute it across cities in a district.
a) For all the states, district GDP is not available. Also, it is not available in the same price series and periodicity. Moreover,
different states follow different methodology to construct district GDP. Therefore, its suitability for city GDP construction
needs to be explored more.

5. Develop an index for city economic activity: There are suggestions that instead of city GDP, a city economic
activity index could be constructed.
6. Using GIS or nightlight data: There are suggestions that GIS information or nightlight data could be used for city
GDP construction.
7. Limits of city: Various points raised on city geography/boundary. It is suggested that it should be clarified what a
city means for this study.
 Identified Stakeholders
Academia and
research institutions,
• Non-profit organizations,
• Experts and Scientists,
Central & State
Government,
Property developers, • Local and regional
• Planners, administrations,
• Policy makers,
• Political institutions

Financial
Citizens,
suppliers/investors,

ICT sector
Energy suppliers,
representatives,
Stakeholder Relationship & Impact
 Stakes
1. Academia and Research Institutions Academic institutions are contributing for the initiation of smart cities through academic
research.
a) The growing interest of research institutes has led to a great number of pilot smart city initiation projects in recent years. Therefore, these
stakeholders are important in planning and developing strategies.

2. Local and regional administrations

a) It is important to have local and regional administrations to be actively involved in initiating, promoting and supporting smart city projects
because smart city projects require improved public services. Administration can contribute for smart city projects in managing the resources.

3. Financial suppliers/Investors
a) Smart cities are very expensive to implement and also to operate. Therefore, a strong dependency on the financial suppliers can be identified.
Obtaining funding is key for the development of Smart City Projects and the investors mainly consider the return on investment of the project.

4. Energy suppliers
a) In smart cities, sustainability is an important concern. Therefore, sustainable energy supply is required for the operation of the smart city.
Sustainable energy policy for smart cities plays a key role.

5. ICT sector representatives

a) In the initiation and the operational stage of smart cities, technological factors are identified as essential requirements [19]. ICT sector
representatives are contributing for the development of a smart city [24].

6. Citizens
a) Citizens were identified as a main type of stakeholders. Moreover to the authors, citizens as stakeholders are invited to experience urban
space and report inefficiencies or place-based positive and negative views in initiating smart cities. It is a key role in urban planning. Citizens
and their creativity, knowledge are important stakeholders in smart city initiation.

7. Government
a) Smart cities offer solutions for government in overcoming the challenges faced due to rapid urbanisation. Government is responsible for
knowledge creation and capitalization which is required for the initiation of the smart city concept
 Stakes
1. Property developers
a) Smart cities are often driven by conflicting interests of property developers. Property developers are interested in innovation and technological
advancements in property development in smart citifies.

2. Non-profit organisations
a) Social organisations and non-profit organisations are interested in the results which arise due to the implementation of smart cities.
Significant project-to-project learning processes in each stage of smart city is important for these stakeholders.

3. Planners
a) Sustainable urban development is currently considered as a key planning goal and has received much attention urban planners. Smart city
concept is a solution for achieving sustainable urban development. Therefore, urban planners are crucial in the initiation of smart cities.

4. Policy makers
a) Policy making and implementation is a key process leading to better transparency and accountability in a smart city. In policy making,
achieving sustainable urban development is a key goal and therefore, policy makers are more interested in making policies which leads a
city to be smart.

5. Experts and scientists

a) Scientists and experts of the smart city concept are also required to be involved in the planning process of initiating smart cities.
Furthermore to the authors, scientists and experts are important for the innovation processes in a smart city.

6. Political Institutions
a) The engagement of political institutions in transferability is key because sharing their experiences can be an asset for present and future smart city
projects. Moreover, political institutions can impact on the governance of a smart city.

7. Media
a) Media can influence a smart city project through the coverage of problems and the advantages of a smart city. The influence can be positive or
negative.
 Key Takeaways
1. Transformation from a non-smart city to a smart city entails the interaction of political and institutional
components with technology as the smart city innovation which states the importance of stakeholder management in a
smart city project
2. With the rapid urbanization, cities are facing many challenges in achieving sustainability. These challenges lead
the requirement of sustainable urban development within cities.
3. While the emphasis of this is also on public participation, Information and Communication Technologies (ICTs) and e-
governance are primary tools recommended for the same. There are many challenges faced by all tiers of governments -
Central, state as well as Urban Local Bodies all over the world - digital divide, i.e. the unequal access to infrastructure
is a challenge in citizen engagement as even access to a computer or mobile phone or an internet connection for each
household are not ensured in Indian cities.
1. Available digital infrastructure is primarily used for entertainment and does not necessarily guarantee public participation in civic
affairs

4. Apart from technological challenges, lack of collaboration and poor communication within different stakeholders of the
Smart City, namely governments, various organisations, institutions, NGOs, and citizens is one of the challenges of
Smart Cities.
5. Apart from the concerns of how to enable citizens technologically, it is important to motivate and involve citizens, and
convey the value of smart city projects to them through continuous Communication.
6. Important to not to depend entirely on one form of public participation but explore different forms of participation and
roles citizens can play throughout the project right from development to implementation
 Roadmap

Convergence, Follow
KNOWLEDGE Segmentation ups and
Proposals
CREATION and re-
Prioritization iteration

Framework for Scoping Analysis Comprehensive Follow ups

Smart City based on clients and focussed
Impact and requirement Proposals for
factors leading prospective
to City GDP Client
calculation is
modelled based
on research
 Pune Smart City - Example

1. The smart city proposal has created a baseline (existing situation) and an aspirational situation based on
the citizens’ inputs which will be used for project identification.
2. Area Based Development gets a prominence in smart city proposals in India. More than 80 per cent of
allotted money for that city is spent on the selected community (in the case of Pune, Aundh-Baner-
Balewadi which is almost 900 acres (3.6 sq km) but small compared to entire city). This selection of
AundhBaner-Balewadi was direct result of the citizen engagement.
3. As mentioned earlier most of the smart city proposals are on the expected lines. The citizens aspire for a
sustainable/ environmental friendly city (‘green’ Pune, eco-friendly transportation, etc.). But one of the
important aspects (in relation to the environment) of smart city which is missing in the city of Pune is the
lack of emphasis on energy efficiency in the buildings. The general public can easily attribute pollution to
the smoke coming out of a vehicle, but may not be aware of overall toll on the environment due to energy
usages in the building. There are awareness initiatives such as ‘Earth Hour’ which raises these issues, but
the energy efficient buildings are not included as a part of the Pune Smart City Proposal.
Thank
You