The proposed project by Plural Technology Pvt Ltd. would bring employment to states, which typically see graduates migrating for better opportunities, besides helping the company lower employee costs.

The company currently has centres in Mumbai, Hyderabad, Bangalore and Chennai. It is now planning to buy land near Faizabad that is not so far away from the holy city of Ayodhya, which the government is keen to develop with modern amenities and facilities to attract tourists and investors alike.

Plural Technology would like to have an early-bird advantage, as land prices will likely surge when the government unveils its plans to upgrade some of the small cities and build new townships, in a bid decongest metros and big cities and geographically broad-base economic expansion in time to come.

Plan for new cities

The Ministry of Housing and Urban Affairs is presently reviewing 26 proposals submitted by 21 states for the creation of new cities.

Proposals received for the creation of new cities or expansion of existing ones include Gurgaon (Haryana), Ayodhya (Uttar Pradesh), GIFT City Expansion (Gujarat), Jabalpur Extension (Madhya Pradesh), Nagaki Global City (Nagaland), New MOPA Ayush City (Goa), and Bantala Greenfield City (West Bengal).

Finally, 8 cities would be selected from the 26 proposals, which have been sent by different states.

In its report on fiscal devolution during the five-year period 2021-26, the 15th Finance Commission had recommended allocating Rs 8,000 crore towards the establishment of eight new cities.

The commission's report for 2021-26 was presented in Parliament on February 1, 2021. Bid parameters and minimum eligibility criteria for the new cities were spelt out by the Ministry of Housing and Urban Affairs last year.

What is holding back action

At present, the proposals are lying with the Ministry of Housing and Urban Affairs, for scrutiny and evaluation. Following meetings with the state government officials, the Ministry of Housing and Urban Affairs has found that the fund allocation recommended by the Finance Commission, Rs 8,000 crore, may not be enough for these projects. Officials from states brought up the issue of land acquisition, which may take away a large chunk of the proposed allocation.

Besides the issue of adequacy of funds, the proposals are unlikely to move forward until the time they are vetted and approved by the Prime Minister’s Office. The PMO has yet to receive the proposals.

Also, as we speak, elections are being held in five states, the outcome of which will also have a bearing on the progress, as some of the proposed cities are in these states.

Why India needs new cities

India has witnessed massive urbanisation, especially since the economic liberalisation in the 1990s. The proliferation and expansion of cities have been either unplanned or badly planned, which have burdened the existing infrastructure and facilities.

In a recent report, real estate consulting firm Knight Frank projected that India’s GDP could grow to $33-40 trillion by 2047, with the real estate sector contributing 15 per cent or more.

As per available data, 35 per cent of India’s population of 142 crore is urban, making the number of those who live in towns a whopping 50 crore. India’s population is projected to reach 167 crore by 2051. If the level of urbanisation reaches 50 per cent in India — it is already higher than that for the world at large and two-thirds for China — the total urban population would reach 83.5 crore. It implies that India should be ready to accommodate an additional 33.5 crore people in its cities and towns.

Urban population in India is highly tilted in favour of a few selected cities. As a result, the existing set of cities are already creaking under the weight of their current residents.

According to a UN report, India’s most populous cities are Delhi ( 3.11 crore), Mumbai (2.06 crore), Kolkata (1.50 crore), Bangalore (1.27 crore), Chennai (1.12 crore). The next most populous cities are Hyderabad (1.02 crore), Ahmedabad (83 lakh), Surat (74 lakh), Pune (68 lakh) and Jaipur 40 lakh). These 10 cities also feature among the world’s 30 most populous cities.

They cannot accommodate any further. Hence, the need to build new cities or upgrade not-so-overloaded cities/towns, which can become new destination points for rural-urban migration.Depending on the population density, the additional urban area that would need to be developed would range from 13,400 sq km (with a population density of 25,000 per sq km) to 22,300 sq km (with a population density of 15,000 per sq km).

What do new cities offer

First of all, new cities would require huge real estate planning and execution hence creating a large number of employment on the whole. As per the plan, new cities would offer modern technology and amenities. It would seek to offer such facilities for modern offices that can become an attraction for companies to increasingly shift their operations to new cities.

Infrastructure facilities such as new airports, educational institutions, hospitals, commercial hubs, amusement parks, stadiums for sports will provide new impetus for growth. Most of these new cities are being planned keeping in view access to national highways, as a series of interconnected modules.

The new cities also offer an opportunity to explore sustainable urbanisation and create models that can be replicated to fix many of the challenges facing our existing cities.

India’s experience of new cities

India’s experience in incubating and creating new cities started first with the establishment of Chandigarh. Lahore, the main city and capital of Punjab in British-ruled India went to Pakistan following partition. The Indian side of Punjab needed a new capital, which is how Chandigarh came up. Chandigarh was later replicated in Odisha to develop Bhubaneswar and make it the new capital in place of Cuttack. There are other greenfield cities across the country, which have been developed in recent decades – for example, Noida in UP, Gift City in Gujarat, New Raipur in Chhattisgarh.

Asian examples

India is not the only country which is planning to build new cities. Other Asian economies have already worked in this direction and either created new cities or upgraded the older ones.

The newest cities, with the most modern technology and high-class infrastructure in Asia, are: Sejong City, S Korea; Rawabi, West Bank; King Abdullah Economic City, Saudi Arabia; Naypyidaw, Myanmar; Songdo, South Korea; Astana, Kazakhstan; Putrajaya, Malaysia. All of these cities have been built or upgraded in the last three decades.

Take for example KAEC. Started in 2005, it is the largest privately funded new city in the world. Situated on Saudi Arabia’s west coast, KAEC covers an area of 181 sq km of land. This city can accommodate up to 2 million people and comprises several modern amenities such as the King Abdullah Port and the industrial valley. It has been established with a future plan to boost investment and economic activities.

Another example could beSongdo.Built on nearly 1,500 acres of land reclaimed from the Yellow Sea, Songdo was conceptualised in the early years of the 21st century as a completely sustainable, high-tech city. For over a decade, architects and urban planners worked hand in hand to create this new business district that was once a model for how we would live in cities of the future.

Plan ahead

The current proposal to build new cities may get underway soon. Officials familiar with the matter said an announcement could come as early as December, once the state elections are over. Alternatively, it might have to wait until the next general elections in April-May 2024, for the project to be taken forward by a new government at the Centre.