The ministry of urban development is drawing a policy paper on smart cities and may present it in one month's time. The ministry also plans to set up a special purpose vehicle to oversee setting up of smart cities.

According to Shankar Aggarwal, secretary, ministry of urban development, the government would set up a quasi government body to drive smart city projects. This is because, according to Aggarwal, if a purely government body undertakes this task it might take long.

In a previous meeting on smart cities, finance minister Arun Jaitley had proposed urban renewal of 500 cities. The selection of cities would be done through consultation with states and would be based on the economic potential of the area, the official said, while speaking at the i-Bharat 2014 organised by FICCI on Friday.

He said the government is taking learning from the Jawaharlal Nehru national urban renewal mission (JNNURM) project, which  failed to achieve the desired results. One of the prime reasons for this is that it failed to make use of technology. Hence, assets were not used optimally.

The Modi government had initially announced to set up 100 smart cities. In this year's budget the government allocated over Rs 7,000 crore for setting up three smart cities.

Rahul Rishi, partner, government advisory services, Ernst & Young, said the need for i-City had arisen because of increasing urban population and depletion of resources. By 2030, 40 percent of India's population would be living in urban areas, 70.6 percent of the population in the urban areas would be covered for water supply for an average of 1-6 hours a day, solid waste generation per capita per day would be 0.6 kg and the average journey speed would slow down to 6-8 km an hour.

Technology would play a key role in making optimal usage of resources and integrated planning, he said. IT would come handy for setting up smart grids and meters. Other areas of IT intervention includes GIS mapping, GIS based rout optimization, smart ticketing, intelligent transportation and surveillance.
 
Bibek Debroy, professor, centre for policy research, said it was important to improve governance first before integrating IT. Otherwise smart cities, such as other ICT driven projects, would enforce digital divide.