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Modi's 100 smart cities: Boon or ban for India?


While Prime minister Narendra Modi's pat project is being cited by his party men and media workers as the something that will transform the India. But how far is this true ? Let's examine one by one for its pros and cons.Following picture summarises the plan of Mr. Modi. 

Arguments in favour

1. It is expected to boost investment in Information technology and real estate which will help Indian economy to touch new hight of growth and development. 

2. It will benefit people living in cities save lot of cost which was due to bad bureaucracy, traffic jams, power & water shortages and many more man made troubles.

3. Increased time and money availability of urban dwellers will help the economy in turn. 

4. Since much of the burden is supposed to be on the technology (which is one time investment+ small percentage of one time investment as operation and maintenance cost ), It will also benefit local, state as well as national government in saving cost of employing new bureaucrats.

Arguments against 

1. It is well known fact that excessive reliance on use of technology can not help solve the problem of uncivilized manners of people. For example, it was thought earlier by our government that educated drivers solve most of the problems of transpiration but even educated drivers park the vehicles in no parking zone and forged education certificates are no exception to the rule of reverse economics. Then now what is guarantee that with the use of technology will make people's mind to change attitude. 

2. When we have 72 percent of population residing in villages with lack of  basic facilities it is no rationality to make billion dollar investment in smart cities. Still India is having poor health and education system and is counted as third world country in terms of development indicator. We are even worse than Bangladesh and Pakistan in terms of food security. Hence priority of a rational decision maker can not be to develop cities at the cost of rural development. 
Some economist may say that growth resulting from urban development will have spread effect (as defined by Gunnar Myrdal) but it is also a point that spread effect can take place when our markets function properly. We have seen that market alone can not help develop a nation. Hence it should be a top priority for government to first develop basic infrastructure (roads, hospitals and schools) in rural areas to let the market function because health and education are public goods in which market failure is very common. 

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