India building its first 'smart city' near Gandhinagar, Gujarat

The first of the 100 smart cities that Prime Minister Narendra Modi has planned to accommodate India's booming urban population and attract investment is being built on the banks of the Sabarmati River, near Gujarat's capital Gandhinagar.

Not much is visible at the ''smart city'' now except two office blocks, although it boasts of modern underground infrastructure. But, as business develops and financial services companies start setting up offices, the new financial centre will have gleaming towers, drinking water on tap, fail-safe captive power supply and automated waste collection.

The planned financial centre, which will have quality infrastructure and state-of-the art communication systems, is estimated to cost about $1 trillion, according to consultants KPMG.

Gujarat International Financial Technology City, which is incorporated as a joint venture company, is expected to attract investment while providing jobs for over a million Indians.

The state government has leased out land to each financial institution and other developers for just a token amount and there will be no cost to the exchequer in developing the city, Jaitley had pointed out while announcing the guidelines on Monday.

''The joint venture company would be paid Rs1,250 per sq ft for commercial development and Rs250 per sq ft for each social sector development. This will account for the initial investment made by the joint venture company, the cost of land and result in a net savings to the joint venture company. Effectively, this will be a smart city with global infrastructure, a financial centre, with people living in there. This is achieved with no cost to the public exchequer,'' he said.

The GIFT City plan was conceived by Prime Minister Narendra Modi when he was chief minister of Gujarat and Jaitley, in the Union Budget 2015-16 had announced that regulations for the city to become an international financial centre would be finalised.

The Union Budget for 2015-16 has allocated Rs6,000 crore ($962 million) while it has so far spent only a fraction of last year's allocation of Rs7.060 crorte.

Also, it has received the necessary regulatory infrastructure from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi) and the Insurance Regulatory and Development Authority (IRDA).

India's urban population is set to rise by more than 400 million to 814 million by 2050.