ISSN (Online) - 2349-8846
-A A +A

Smart Cities Need Smart Villages

Shailaja Fennell ( teaches at the Centre of Development Studies and Department of Land Economy, University of Cambridge. John Holmes ( is a senior research fellow at the Department of Earth Sciences, University of Oxford and co-leader of the Smart Villages Initiative. Bernie Jones ( is project co-leader of the Smart Villages Initiative.

The current Smart Cities Mission needs to be linked to India’s villages. The lacuna in the current mission mandate can be filled by directly addressing the opportunities provided by renewable off-grid production to increase employment and diversification in the rural economy, with a particular focus on India’s rural youth.


This article is based on presentations made by the Smart Villages team, in the cities of Bhubaneswar, Gandhinagar, Hyderabad, and Ranchi over the course of 2016–17. 

Prime Minister Narendra Modi announced the Smart Cities Mission in 2015 (>Economic Times 2015), calling for a celebration of urbanisation. He hailed the mission as an opportunity to bring in “smart” interventions to upgrade India’s growing cities. We make the case that smart cities need smart villages, for a spatial shift in India will require higher agricultural productivity, more energy (particularly renewable off-grid energy production), and diversification into non-agricultural income-generating activities (for instance, food processing, construction, businesses, and services) to sustain such a mission.

We argue that current urbanisation trends in the context of the global goal of sustainable energy for all, bringing together the seventh goal of the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change, raise questions for employment and sustainability policies. This important agenda is difficult to achieve due to the lack of affordable finance for companies, and the perverse costs associated with production of electricity and the current set of global energy subsidies. The largest subsidies are accounted for by coal, and it is estimated that reversing the situation by doing away with energy subsidies in both high-income and low-income countries, could increase global government revenue by 3.6% of current global gross development product (GDP) (Coady et al 2015). In the case of India, currently, coal fires more than half of the power stations. A shift to renewable energy could reduce India’s carbon dioxide (CO2) emissions. Furthermore, it could be the basis for expanding job creation in India, and the solar and wind sector have already created nearly 70,000 domestic jobs (The Climate Group 2015).

Policy Implications

Urbanisation in India is no simple matter and it poses challenges and also throws up puzzles relating to data and policy. While India has witnessed increased urbanisation in the 21st century, 69% of India’s population (833 million) still live in rural areas, as against 31% (377.1 million people) in urban areas (Government of India 2011). Projections by the United Nations (2015) for the period 2014–50 indicate that India’s total population will increase from 1.3 billion to 1.7 billion. The median projection is that the urban population is expected to grow by 404 million people, but the number of rural residents is expected to only decline by 52 million (United Nations 2014).1 This implies a very gradual decline in the population living in the countryside, corresponding to only 6% of the current rural population, as 750 million will still be living in rural India in 2050.

This recent increase in the pace of urbanisation also poses spatial challenges for a country that was the least urbanised of the top 10 countries in the world (Chandrasekhar and Sharma 2014). In 2014, 19% of India’s population did not have access to electricity, which disaggregates to 26% of the rural population and 4% of the urban population (IEA 2015). Additionally, while 67% of rural households have access to electricity, up to a fifth of these households do not use electricity as a primary source of lighting (Nathan 2014). Furthermore, rural households face outages of up to four hours a day, often unscheduled, so there is a continued use of kerosene in rural electrified households (Pargal and Banerjee 2014).

Rural Employment

There are further challenges for rural India with regard to youth employment evident from recent demographic data. India’s youth are largely located in rural areas, with 70% residing in villages and the remaining 30% in urban areas (Motkuri 2013). This spatial divide exists against the backdrop of a falling share of agriculture in the national GDP over the previous decade, declining from 66% in 1993–94 to 56% in 2003–04. Furthermore, the employment generating capacity of non-agricultural activities was higher than that for agricultural activities for all workers over the course of that decade (Dev and Venkatnarayana 2011). There is concern that the rural economy is unable to generate jobs with the agricultural sector, resulting in a shift to non-agricultural jobs, particularly severe in the case of youth employment. This is considered to add to the woes of a rural sector that is still home to two-thirds of India’s current population, but where traditional agricultural activities are no longer able to ensure employment for its residents (Basole 2017), while there is no well-devised strategy for diversification into non-agricultural activities.

These employment prospects occur at a time when India’s education levels for youth (5–29 years) have been rising, and current urban and rural youth literacy rates are 86% and 71%, respectively (NSSO 2014). The 2011 census data indicates a fall in the gender gap compared to 2001: literacy rates in urban India were 89% for men and 79% for women, while for rural India they were at 78% and 68%. The opposing tendencies in the trends of increasing educational achievements of rural youth, and the falling contribution of agriculture in creating jobs for rural youth, makes the entry of renewable energy opportunities in rural India a potentially important source of employment for youth as well as the larger working population.

A View from the States

The challenge of electrification in rural areas is even more evident at the level of individual states—the average rural household electrification rate stands at 53%—in addition to the fact that not all households in an electrified village have access to electricity (Pugazenthi et al 2016). There is a large gap between the official figures on renewable energy, where the current provision is 7% of the total power production, and the larger objective is to raise it to 19% in 2022 (Nathan 2014). There is an even greater chasm between the estimated potential for renewable energy, where the states estimated to have the greatest potential for generating renewable power face a long stretch: Rajasthan is in the lead at 17% (1,48,518 megawatt [MW]), and Gujarat at 8% (72,726 MW), while the current levels of grid-integrated renewable energy for these two states are currently only 4,386 MW and 4,717 MW (MoSPI 2016).

There are challenges with regard to the availability of conventional thermal power generation from coal, as coal deposits are located in the greatest abundance in the eastern and south-central parts of the country: Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana, and Maharashtra account for 99% of the total coal reserves in India, with a quarter of the reserves being found in Jharkhand (26.4%) and another quarter in Odisha (24.7%) (MoSPI 2016).

Jharkhand and Gujarat provide useful contrasts in relation to their current rural access to electricity as well as their natural resource base for generating conventional as well as renewable electricity. It is worthwhile examining their opportunities for cogeneration of renewable energy and rural employment in the current environment.

Jharkhand: Jharkhand is the state where mining and quarrying activities contribute the highest share to the state output, accounting for 14.3% of the gross state domestic product, as compared to 2.3% for the rest of India (World Bank 2007). This vast resource base could become the basis for developing a business development programme around the power sector in Jharkhand, where the plentiful availability of coal could be the basis for low-cost power generation. However, the state administration seems to be already addressing renewable energy as the road that must be taken to ensure that the state is less susceptible to climate change. The recent cause for concern was that Ranchi, 651 metres above sea level, saw the mercury rise to above 40°C for the very first time in the summer of 2016. The state has also experienced drought for the last seven years. These features were addressed by the principal secretary for the Ministry of Environment, Forest and Climate Change last summer (Dey 2016) and are also echoed in the state’s own report on climate change (Government of Jharkhand 2014).

There is concern that the state’s vulnerability to climate change will only grow with any future increase in the rate of exploitation of its mineral resources (Government of Jharkhand 2014)2 making the state a big emitter of greenhouse gases (GHGs). The Jharkhand Action Plan for Climate Change, 2014 makes the case that even if current development policies continue, the net GHG emissions will reach 105 million tonnes of CO2 equivalent, compared to the current 44 million tonnes (estimates for 2010–11). The report opts for the road to renewable energy to increase existing power generation capacity in the state: currently 20 watts per capita, while the national average generation is 100 watts per capita in 2011.

Gujarat: Gujarat is the state that has the highest solar radiation, from 6.0 to 6.4 kilowatt hour per square metre daily, and is a leading state in the delivery of rooftop solar energy systems. Gujarat, Rajasthan, Madhya Pradesh, and Maharashtra account for 75% of currently installed solar energy capacity. Furthermore, rooftop solar systems have the potential to become an even more prominent part of India’s solar portfolio where it can reduce or even replace diesel-powered back up generation (IEA 2015).

The current pattern of energy production and consumption in Gujarat poses both economic as well as environmental conundrums. Despite having no domestic coal reserves, Gujarat is the second highest coal-consuming state in India. It currently accounts for 66% of the nation’s petroleum imports, 36% of coal imports, and 98% of liquefied natural gas imports; while 77% of petroleum, oil and lubricant exports and 100% of coal exports are also shipped out of the state. There is clearly a win–win opportunity here, as pushing for a greater share of energy production from renewable sources, such as solar energy, would reduce the need to import petroleum for domestic usage, while increasing domestic energy production (Integrated Research for Action and Development 2015).

Gujarat has an action plan for addressing climate change focused on the need to reduce vulnerability, defined as ‘‘the degree to which a system is susceptible to, or unable to cope with adverse effects of Climate Change,” faced by households with the greatest exposure to future climate shocks (Government of Gujarat 2014). This plan indicates that this is a high priority as the state has a coastline of 1,600 km, with both rural and urban settlements that are highly prone to inundation from rising sea levels.

These state-level objectives, with regard to renewable energy objectives, fit well with the opportunities provided by the new renewable energy options set out in the National Renewable Energy Act, 2015 to address the need to mitigate climate change. The ambition is to ensure that 10% of power will come from renewable sources, and that 165 gigawatt of renewable energy capacity will be installed by 2022 (Ramamurthi 2016).

Youth Employment

The Smart Cities Mission focuses on smart grids and devices to generate economic growth, create wealth and sizeable demand for rural and agricultural products, thereby enabling the shift from subsistence to commercial agriculture (Government of India 2016). The smart villages concept set out by the Smart Villages Initiative3 argues that the use of renewable energy as a development intervention would be a catalyst for education, health and empowerment programmes, utilising both human and technical networks, to sustain growth and to promote the convergence of living standards between rural and urban locations.

The provision of renewable energy in rural areas is particularly important for increasing employment opportunities for rural youth completing secondary school education. The provision of targeted skilling programmes to install and maintain renewable solar home systems, will provide young people with a new skill set, whether they stay on and work on renewable energy projects in the new smart villages or whether they move to cities, attracted by service provisions in the smart cities; that is, Gujarat’s six designated smart cities of Gandhinagar, Ahmedabad, Surat, Vadodara, Rajkot, and Dahod, and in the smart city of Ranchi in Jharkhand.

In the case of Gujarat, which has the highest figure of intra-state migration and with 6.5% of its urban households being formed by migrant families (NSSO 2008), this targeting of energy-related skill development can reduce educational inequalities between rural and urban youth: where the rural school enrolment rate for both boys and girls is 17% below that of their urban counterparts (Government of India 2011).

In Jharkhand, which had one of the lowest levels of urbanisation in the country, there has been rapid urbanisation. The city of Ranchi has already tripled in size between 1970 and 2010, and is likely to become more attractive as it develops all the characteristics of a smart city. The objective set out by the government of successfully electrifying 93% of Jharkhand’s villages, would demand a huge increase in coal-based energy production, while renewable energy could reduce vulnerability and catalyse education, health and women’s empowerment as well as reduce educational inequalities between rural and urban areas, for, currently, in Jharkhand the rural enrolment rate for girls is 20% below that of their urban counterparts (Government of India 2011).

Sustainable Development

The current policy framework for power that emphasises renewable energy as a strategic policy to reduce GHGs in India (Ministry of Power 2016) is ambitious, and requires a strong link between state-level policy and the provision of off-grid electricity to all rural households. This can be provided by developing a policy model that builds on smart cities–smart villages linkages. The provision of renewable electricity, both accessible and of adequate quality, to rural households should ensure that it brings together emerging and established public and private businesses in the energy sector (Bazilian and Pielke 2013). If such innovative energy policy plans are harnessed to cogenerate employment opportunities, then energy access initiatives can be integrated with investment in productive enterprises to expand economic production and enhance productivity. This is essential if the SDGs are to be achieved.


1 The United Nations (2014) median projection is based on calculations that the bulk of the rise in urban population will be largely due to population growth within the existing urban conurbations as well as the growth in small towns (urban agglomeration). There is likely to be a very small reduction in rural areas due to a slow rate of urbanisation in India, largely due to the continued levels of high fertility in rural India; while in China, it is projected that 300 million will leave rural areas and move to the cities by 2050.

2 India’s per capita emission is estimated to be 1.38 tonnes and is far lower than those of the developed countries. India has to voluntarily reduce its emissions by 20%–25% by 2025, as compared to its 2005 level.

3 The Smart Villages team, based at the universities of Cambridge and Oxford in the United Kingdom (UK), was established by the Cambridge Malaysian Education and Development Trust (CMEDT). Key partners in the project were the national science academies and their networks, together with Practical Action in UK and the Energy Resources Institute in India, two organisations with wide experience of implementing village energy projects. Funding for the first phase of activities (2012–17) was provided by the CMEDT and the Templeton World Charity Foundation.


Basole, Amit (2017): “What Does the Rural Economy Need? Analysis of the Promises of Rural India,” >Economic & Political Weekly, Vol 52, No 9, pp 40–43.

Bazilian, Morgan and Roger Pielke (2013): “Making Energy Access Meaningful,” >Issues in Science and Technology, Vol 29, No 4, pp 74–79.

Chandrasekhar, S and A Sharma (2014): “Urbanization and Spatial Patterns of Internal Migration in India,” Working Paper 2014–16, Indira Gandhi Institute of Development Research, Mumbai.

Coady, David, Ian Parry, Luise Shears and Baoping Shang (2015): “How Large Are Global nergy Subsidies,” IMF Working Papers 15/105, International Monetary Fund.

Dev, S Mahendra and N Venktanaryana (2011): “Youth Employment and Unemployment in India,” Working Paper 2011–09, Indira Gandhi Institute of Development Research, Mumbai.

Dey, Sanjoy (2016): “‘Switch to Renewable Energy to Check Environmental Damage,”Hindustan Times, 6 June,

Economic Times (2015): “PM Narenda Modi Launches Smart Cities Vision,” 26 June,

Government of Gujarat (2014): “Gujarat State Action Plan on Climate Change,” supported by the Energy and Resources Institute and GIZ, Climate Change Department,

Government of India (2011): Census of India, Office of the Registrar General and Census Commissioner,

— (2015): “National Renewable Energy Act,” Ministry of New and Renewable Energy,

— (2016): “Building a New India,” Ministry of Urban Development,

Government of Jharkhand (2014): “Jharkhand Action Plan on Climate Change,”

Integrated Research for Action and Development (2015): “Environmentally Sustainable and Integrated Energy Strategies for Gujarat,” submitted to Energy and Petrochemicals Department, Government of Gujarat and Gujarat Power Corporation Limited, Gandhinagar,

IEA (2015): >India Energy Outlook, 2015, Directorate of Global Energy Economics, International Energy Agency,

Ministry of Power (2016): “National Electricity Plan,” Government of India,

MoSPI> (2016): “Energy Statistics,” Central Statistics Office, Ministry of Statistics and Programme Implementation, Government of India.

Motkuri, V (2013): “Caste and Youth in Rural India: Education, Skills and Employment,” MPRA No 48593, Munich Personal RePEc Archive,

Nathan, Hippu Stalk Kristle (2014): “Solar Energy for Rural India: A Misplaced Emphasis,”Economic >& Political Weekly, Vol 29, No 50, pp 60–67.

NSSO (2008): >Migration in India, 2007–08, National Sample Survey Office,

— (2014): “Social Consumption: Consumption, 71st Round,” National Sample Survey Office.

Pargal, Sheoli and Sudeshna Ghosh Banerjee (2014): >More Power to India: The Challenge of Electricity Distribution, Directions in Development–Energy and Mining, Washington DC: World Bank.

Pugazenthi, D, Gopal K Sarangi, Arabinda Mishra and Subhes C Bhattacharya (2016): “Replication and Scaling Up of Isolated Mini-grid Type of Off-grid Interventions in India,” >AIMS Energy, Vol 4, No 2, pp 222–55.

Ramamurthi, Pooja Vijaya (2016): “Political Economy of Renewable Energy Deployment in India,” >Economic & Political Weekly, Vol 51, No 38,
pp 21–24.

The Climate Group (2015): “The Business Case for Off-grid Energy in India,”

United Nations (2014): >World Population Prospects, Population Division, Department of Economic and Social Affairs, New York.

— (2015): >World Population Prospects, 2015: Revision, Population Division, Department of Economic and Social Affairs, New York.

World Bank (2007): >Jharkhand: Addressing the Challenges of Inclusive Development, Poverty Reduction and Economic Management, India Country Management Unit, South Asia.

Updated On : 26th Mar, 2018


(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top