Saugata Dasgupta

Urban Specialist

India Resident Mission

Context

Smart cities development

Cities will be locus and engine of economic growth

Making cities competitive, livable, sustainable & bankable

Make in India

To make India a global manufacturing hub by creating enabling business environment and infrastructure

Opening up of new manufacturing sectors in India for private sector investment and foreign direct investment

Karnataka Vision- 2020 Make Karnataka a globally competitive destination

Employment-driven economic development

Sustainable and orderly industrialization and urbanization

Why Bangalore Metropolitan Region(BMR)?

Unprecedented spatial and population growth

Mostly concentrated in Bangalore city so far

Pivotal role in achieving Karnataka’s Vision 2020

Bangalore already exhibit some semblance of economic clusters

Prevalent economic activities

Potential to achieve enhanced growth and employment-driven economic development, if enabling business environment and infrastructure is created

Bangalore is more service oriented economy- opportunity to lead industry-oriented development & accompanying urbanization in outer areas

The State’s reform willingness

Potential for replicability

ADB’s long association with the State in the urban Sector

The Proposed Project

Objective

To increase competitiveness of BMR Region in a way that also promotes inclusive and environmentally sustainable growth

Key outputs/pillars to achieve the objective

Strengthen regional and metropolitan planning

Upgrade key economic and social infrastructure

Enhance urban governance to create a better business & investment climate

Key Information BMR Bangalore City

Area

8000 square km 1220 square km (15% of BMR)

Population 11.7 million 8.4 million (72% of BMR)

Workforce participation rate

52% -highest compared to all other metros

Economy 85% (3.98 million) are engaged in services as well as manufacturing sector Tertiary sector is the biggest economic driver (63%)

Key sectors 1. IT (alone provide 800,000 high paying job) 2. Aerospace and Aviation industries (10,000 jobs and

accounts 65% of aerospace business in India) 3. Biotechnology 4. Electronics System Design and Manufacturing 5. Automotive 6. Textile and garments 7. Manufacturing 8. Floriculture

Key Features Planning Approach

Cluster-based city economic development

Financing

Leverage project fund ($459 million) for private sector investment

Structuring of new financing modalities

Implementation Strategy

Multi-stakeholder demand-based infrastructure development

Use of purpose specific special purpose vehicles

Promoting sectoral coordination and convergence

Phasing of key reform actions

Establishing a strong partnership between public & private sectors

Planning Approach Phase 1A (Completed)

A City Competitiveness Assessment

Identification of key Economic Sectors and clusters

Assessment of Policy, Institutional & Legal Framework

A Strategy for Urban Clusters that will drive the economic growth of the region

Development of criteria for selection of potential clusters

Multi criteria analysis to identify potential clusters

Phase 1B (On going- December 2014)

Technical Pre-feasibility Studies for selected Urban Clusters

Detailed Investment Programme

Phase 2(Yet to Start- June 2015)

Urban Cluster Business Plans for priority clusters

Project Structuring and Feasibility studies

Related to Competitiveness of BMR (Based on Multi Criteria Analysis

and Perception Survey):

Weak regional planning framework and local government institutions

Lack of sustainable infrastructure

Land cost and availability

Related to Project

Structuring appropriate institutional framework

Securing long-term effective coordination mechanisms at state and city level

Timely implementation of business-oriented and other key urban reforms

Securing private participation

Processing the Project by 2016

Key Challenges

Thank you

Rapid Urban Growth

50 Km

Bangalore Metropolitan Region

Investments trends in BMR

-

50

100

150

200

250

300

350

400

450

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mill

ion

USD

Aerospace Textiles inc apparel Biotech Electronics Gen Eng IT-BPM Automotive IT Parks

The BMR – Primarily a Service Economy

3.8%

35.7%

60.5%

2.8%

33.7%

63.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Primary Sector Secondary Sector Tertiary Sector

BMR GDP (share of total) FY 2005-06 BMR GDP (share of total) FY 2011-12

Employment Location Quotients

27.0

3.9

19.3

2.5

22.3

4.1 3.2

7.7

1.5 0.3

4.2

1.0

7.6

22.6

6.0

15.1

4.0

27.2

5.9

3.4

8.9

1.7

0.7

5.1

0.9

11.7

-

5.0

10.0

15.0

20.0

25.0

30.0

Loca

tion

Quo

tient

Employment LQ - 2011 Employment LQ - 2005

Employment Shift Share Analysis

Employment & Economic Impact

187%

89%

159%

70%

364%

75%

118%

22% 41% 41% 43% 39%

52%

100%

0%

50%

100%

150%

200%

250%

300%

350%

400%

Concentration of Key Sectors Across BMR

Forming a Cluster Key considerations in demarcating a Cluster

Semblance of economic activity – KIADB Industrial Area

Land capability – Structure Plan recommendations

Existing urban centre – ULB/CT

Villages – workforce

CLUSTER

ULB/CT

Industrial Area

Villages

Potential land for

development

Urban Clusters for Evaluation

Devanahalli/Int.Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakapura

Harohalli

Bidadi

Ramanagaram

Channapatna

Magadi

Nelamangala

Dobbaspet

DoddaballapurVijayapura

1

2

3

4

14

5

13

9

11

1210

6

7

8Urban Clusters

for Evaluation

MANDYA

Cluster Evaluation Criteria

A total of 18 evaluation criteria were developed under four policy goals

GOAL 1: Economic Growth

GOAL 2: Balanced & inclusive

Urban Development

GOAL 3: Efficient

TransportGOAL 4: Sustainable Utilities

Pillar (Output) 1 Pillars (Outputs) 1 & 3 Pillar (Output) 2 Pillar (Output) 2

Home or proximity to existing dynamic

and successful economic clusters

Land availability for significant urban

development

Location on Major

transport CorridorSource of Water Supply

Proposed new economic sector in

urban cluster

Likely to support social inclusiveness

& equity

Future Road

Connectivity potential

Potential to reuse tertiary

treated water

Existing or proposed KIADB/LPA

Industrial Area

Existing High level Educational &

Health facilities

Existing or proposed

Freight HubsSewerage Network Coverage

Accessibility to Bangalore Int. Airport Land pricesPotential rail based

public transport corridorScientific disposal facility

Availability of industrial incentives &

concessions

Sensitivity of environment of potential

expansion areas

Urban Cluster Evaluation: Summary of Development Potential

Economic Growth Potential

Balanced Urban Development Potential

Efficient Transport Potential

Sustainable Utilities Potential

Dobbaspet High High High Very Low

Nelamangala Low High High Very Low

Doddaballapur High High High Very Low

Devanahalli/Int. Airport Very High Moderate Very High Very Low

Hoskote High Moderate Moderate Very Low

Bommasandra-Sarjapura High Moderate High Very Low

Anekal High Moderate High Very Low

Kanakpura Moderate Moderate Low Moderate

Bidadi High Moderate Very High Low

Harohalli High Moderate Moderate Low

Ramanagaram Very Low Moderate High Moderate

Channapatna Very Low High High Low

Magadi Very Low High Very Low Very Low

Vijayapura Very Low Moderate Very Low Low

Urban Cluster Evaluation: Summary of Development Potential

0 50 100 150 200 250 300

Dobbaspet

Nelamangala

Doddaballapur

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakpura

Bidadi

Harohalli

Ramanagaram

Channapatna

Magadi

Vijayapura

Urban Cluster Evaluation: Goal 1 Economic Growth

0 10 20 30 40 50 60 70 80 90 100

Dobbaspet

Nelamangala

Doddaballapur

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakpura

Bidadi

Harohalli

Ramanagaram

Channapatna

Magadi

Vijayapura

Urban Cluster Evaluation: Goal 2 Balanced Urban Development

0 10 20 30 40 50 60 70 80 90 100

Dobbaspet

Nelamangala

Doddaballapur

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakpura

Bidadi

Harohalli

Ramanagaram

Channapatna

Magadi

Vijayapura

Urban Cluster Evaluation:

Goal 3 Efficient Transport

0 10 20 30 40 50 60 70 80 90 100

Dobbaspet

Nelamangala

Doddaballapur

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakpura

Bidadi

Harohalli

Ramanagaram

Channapatna

Magadi

Vijayapura

Urban Cluster Evaluation:

Goal 4 Sustainable Utilities

0 10 20 30 40 50 60 70 80 90 100

Dobbaspet

Nelamangala

Doddaballapur

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakpura

Bidadi

Harohalli

Ramanagaram

Channapatna

Magadi

Vijayapura

Potential Clusters

Devanahalli/Int. Airport

Hoskote

Bommasandra-Sarjapura

Anekal

Kanakapura

Harohalli

Bidadi

Ramanagaram

Channapatna

Magadi

Nelamangala

Dobbaspet

Doddaballapur Vijayapura

MANDYA

Potential

urban Cluster

City Competitiveness Assessments

• ADB – Survey of 39 cities in SE Asia 2011, Bangalore 3rd – second to Mumbai

in India

• World Bank “Doing Business in India” 2009, Bangalore 13th out of 17 cities

• India Competitiveness Report, 2013, Bangalore 8th in a survey of Indian

cities

• Economist Intelligent Unit, based on 32 indicators, placed Bangalore 94th

out of 120 cities worldwide. Mumbai was 51st & Delhi 69th

• But this relatively poor competitive showing does not mean that IT in

Bangalore is not internationally competitive;

• Nor do strong clusters make a city competitive – indeed the effect of the

success of IT is to drive up costs for other economic sectors.

Perception of the Business environment in BMR

0.690.67

0.730.69

0.730.69

0.710.710.710.67

0.73

0.600.630.63

0.790.830.83

0.670.67

0.77

0.84

0.790.790.76

0.800.76

0.69

0.20

0.61

0.40

0.80

0.20

0.40

0.200.20

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Institutional Options

One ULB co-terminus with the area of the Cluster – will, however, require extensive capacity building and regulatory amendments for empowering ULB

Formulate an SPV with private sector participation by positioning the Cluster as an National Investment and Manufacturing Zone