By Mr. Sunny Katyal, Director, Investors Clinic
For a long period Tier, I or the metro cities were considered the safest bets, as they were the only place developers were looking to invest on. Returns on investment were pretty good in these cities and they got exclusive focus from the developers. This is also inclined to the fact that metro cities were creating most employment opportunities.
This has led to greater inward immigration and a threat of overpopulation in metro cities which in fact has headed to poor infrastructure for the residents.
In 2015, Smart Cities programme was launched aiming to tackle the problems faced by urban area residents with regards to energy supply, transportation, infrastructure, governance and enhanced eminence of life. As many cities have touched their saturation point, remodelling them into smart cities has posed to be a challenging task.
Tier II & III Cities Lead The Charts
Considering all the problems of the Tier I cities, be it lack of resources or infrastructure, the real estate business has been shifting focus to the Tier 2 & 3 cities. The numbers estimated for cities by the end of 2030 are- Tier I with 155 cities in the list, Tier II with 104 cities and Tier III & IV with 331 cities among them.
Strong resurgence and revival of Tier 2 & 3 cities have been recorded with their growth numbers rising up steeply.
A couple of factors for this resurgence are infrastructure development and increased economic activity. These two tiers of cities come with cheaper and more affordable cost of living and real estate prices. Plus the availability of land is also quite better than metro cities.
Real estate development has boosted up ever since these two tiers have come into developer’s focus. This has led to a more uniform development across the country, gradually taking off the pressure from over-burdened Tier I cities.
Shaping Up Smart Cities
The Smart Cities program had been allocated Rs 2.04 lakh crore in Budget 2018. As per the media reports, close to Rs 10,000 crore have been deployed in the program so far. That means, around 95% of the funds i.e. Rs 1.94 lakh crore are slated to be infused into these cities.
The inclusion of smaller cities in the Government’s list of smart cities has given confidence to real estate sector to a great extent.The tier II and tier III cities have more to gain from this project. Many of them have already been showing remarkable results with respect to quality of life and several other parameters, and that’s a good sign indeed.
In overall, the concept of smart cities would bolster infrastructure development in these cities and that will naturally pave way for real estate development too.
Corporate Comm India(CCI Newswire)