Tag: Economy

8 key issues or priorities for the government, making news in India recently –

1. Alarming Pollution level in the capital cities of India
2. Government’s plan and vision to build Smart Cities in Indi
3. Make In India
4. Unsustainable Real Estate prices in major cities making it difficult for the middle class to buy properties in these cities
5. Level of Unemployment
6. India’s Economic Growth
7. VIP Culture for Politicians (massive bungalows in posh locations)
8. Level of Fiscal Deficit and burden of servicing the interest cost for the government

Possible Solution to address the above issues (not sure if stupid or practical 🙂

“We shift our 30 capital cities (Country and States) to developing/under-developed cities in a phased manner over the next 10 years”. It has been done in the past too for the country (Patna to Calcutta to Delhi) and states so is doable.

There would be two aspects to be looked at –

a) how does it help in addressing the issues :  

1. The new capital cities could be well developed as planned, modern, clean and hi-tech cities with better infrastructure (as compared to polluted, populated, congested, unplanned cities), improving the government efficiency and image of the country and
2. It would take the load off the capital cities in Delhi, Mumbai, Chennai, Kolkata, Lucknow, Hyderabad and so on making them less polluted with the reduction in population.
3. Reducing the load in the existing capital cities would reduce land and real estate prices to affordable and sustainable levels, thereby reducing inflation. Middle class could then afford to buy homes in these cities thereby increasing the quality of their lives.
4. Developing new capital cities would increase the demand for various manufactured goods required for building infrastructure (achieving Make in India vision), bring foreign investments and FX in multiple manufacturing sectors with positive impact on Rupee strengthening , would create new jobs in abundance (significantly reducing unemployment and poverty) and finally increasing the GDP and economic growth for the country.
5. Apartments in average localities (as compared to Bungalows in acres in posh places) with necessary facilities can be built in the new capital cities for most of the Politicians – Ministers, MPs, MLAs, reducing the impact of VIP culture. In a low-income democracy. An MP or Minster housing in a 1-Acre Bungalow (valued at 100 Crore) in posh Delhi locations, does not justify a poor or low-income India. They are public representatives and need to live within public vicinity.

b) how would the government fund the infrastructure, real estate development in the new capital cities : 

1. The government sells up to 50-60% of its properties in these 30 capital cities at the current prices.- Government land, Minister’s / MP’s massive bungalows (current market valuation of 1 bungalow in Delhi is over 100 Crore), Government Offices, Museums / Heritage Properties in posh locations (CP in Delhi, Nariman Point in Mumbai)
2. It will then generate enough money to build over 250-300 modern and smart cities (my estimate of the properties prices between posh locations in capital cities and developing/under-developed cities is at 20: 1, assume 10 times conservatively). 1,000 acres of Government properties in posh Delhi localities alone is estimated to have a conservative value of over Rs. 1,00,000 Crore. 650 Bungalows in Central Delhi alone for Ministers, Secretaries and other VVIPs could value anywhere between 50,000 -1,00,000 Crore. This is the blocked opportunity capital for the government. Similar properties can in new cities can be built at less than 10% of the cost and hence the balance can be used to build infrastructure, smart cities and to reduce the government’s fiscal deficit. Similar capital cost can be released in all the capital cities.
3. Since we need to build 30 smart capital cities, the balance funds can be used to significantly reduce the government’s debt which is over 60% of the GDP (65-70 Lacs Crore).