The laundry list of Rs 100 crore projects rattled off by finance minister Arun Jaitley during the budget speech might have surprised people, but there was one mention of 100 that was much less surprising: smart cities.

The grandiose promise of building 100 smart cities has been part of Modi’s acche din vision from the outset, and it would have been surprising if the budget had not made some mention of it.

In the event, Jaitley did promise 100 cities to be built for what the Bharatiya Janata Party is calling the neo-middle class – those who have just emerged from above the poverty line and are striving to ensure they remain there.

Less promising was the amount he allocated to the project: Rs 7,060 crore, which is a little over Rs 70 crore per city. As with the Rs 100 crore club, the finance minister has insisted that this is simply seed money to get the projects going and more will be allocated once things have moved forward.

What are smart cities?
There’s no simple definition for smart cities. The term encompasses a vision of an urban space that is ecologically friendly, technologically integrated and meticulously planned, with a particular reliance on the use of information technology to improve efficiency.

The Smart Cities Council, an industry-backed outfit that advocates the concept in India, describes them as cities that leverage data gathered from smart sensors through a smart grid to create a city that is livable, workable and sustainable.

What is smart about them?
According to the Smart Cities Council, all the data that is collected from sensors – electricity, gas, water, traffic and other government analytics – is carefully compiled and integrated into a smart grid and then fed into computers that can focus on making the city as efficient as possible.

This allows authorities to have real-time information about the city around them, and allows computers to attempt “perfect operations”, such as balancing supply and demand on electricity networks, synchronising traffic signals for peak usage, and optimising energy networks.

Why do we need them?
India’s is urbanising at an unprecedented rate, so much that estimates suggest nearly 600 million of Indians will be living in cities by 2030, up from 290 million as reported in the 2001 census.

Alongside the hordes of Indians go the jobs and the money as well: a McKinsey Global Institute study estimated that cities would generate 70% of the new jobs created by 2030, produce more than 70% of the Indian gross domestic product and drive a fourfold increase in per capita incomes across the country.

“The cost of not paying attention to India’s cities is enormous,” the MGI report said. “The speed of urbanisation poses an unprecedented managerial and policy challenge – yet India has barely engaged in a national discussion about how to handle the seismic shift in the makeup of the nation.”

Are they going to be new cities?
In his budget speech, Jaitley listed out exactly why the government believes it needs to be spending money on 100 smart cities. He claimed that “unless new cities are developed to accommodate the burgeoning number of people, the existing cities would soon become unlivable.”

That said, he also made it clear that the Rs 7,060 crore allocation would not all go into setting up brand new cities. Instead, the aim is to build satellite towns near existing urban areas on the smart city template, upgrade existing mid-sized cities, and to build settlements along industrial corridors.

Which cities have been picked out?
At the moment 100 cities remains a tentative figure, with much still to be pinned down. The budget speech only officially identified cities along the Amritsar-Kolkata Industrial Master Plan, which covers seven states. Although they weren't named in the budget, seven cities have also been named along the Delhi-Mumbai Industrial Corridor, some which would overlap with the Amritsar-Kolkata plan.

Officially, the budget only pointed out three cities in the Chennai-Bengaluru Industrial Corridor: Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka.

What about those cities that don’t make the cut?
At a meeting regarding the smart cities in June, the urban development ministry secretary said that the focus will not be just 100 cities but all urban areas across the country. “There exists no valid reason to leave the 101st city in the process of development,” he said.

The secretary, Sudhir Krishna, has asked the National Institute of Urban Affairs to work on the smart city project, based on a framework that covers overall smartness and sustainability. For now, though, the focus will be on a much smaller number of cities in states where conditions are amenable before the government even attempts to look at expanding to cover 100 urban areas.

Do we have any smart cities already (and who is building them)?
A quick Google search for India’s “first smart city” produces more than 70,000 results, and many of them lead to different places. In Bangalore, Cisco is working to set up a smart grid-based Education City, where all the utilities will be integrated with data.

Outside Mumbai, the Lodha group has given IBM a contract to build all data systems in their Palava city project. Kochi has a special economic zone that seeks to replicate Dubai’s smart city project. Gujarat has two projects, the Dholera urban area, which is part of the Delhi-Mumbai industrial corridor, and the Gujarat International Finance Tec-City, both of which have problems but are being touted as examples that could be scaled up across the country.

Who will pay for them?
Rs 70 crore per city will clearly not be enough, and even if more is added, it’s unlikely the government will have the resources to pay for the cities. In the budget, the government announced that it was relaxing norms for foreign direct investment to make it easier for outside companies to invest in smart cities. In addition, India has spoken to France, Japan and Singapore about collaborating on the projects.