Which are the micro, small and medium enterprise (MSME) sectors that would gain from the government's Smart Cities Mission?
We believe MSMEs offering healthcare, information technology and IT-enabled services, education, logistics, transport and urban development-related services such as real estate and waste management will be gainers.
An analysis of more than 340 CRISIL-rated MSMEs in these sectors shows them posting a healthy topline growth of 16-28 per cent in 2014-15.
In January 2016, the government named 20 cities - out of 98 shortlisted for the mission - that would be the first to receive funds to execute their relevant projects.
Being localised and of a relatively low value, we believe MSMEs are best placed to win contracts pertaining to the Smart Cities Mission, given their regional experience and local infrastructure.
The next two years will also see the remaining 78 cities shortlisted, kicking off their projects after receiving funds. CRISIL therefore foresees MSMEs benefiting significantly if the Smart Cities Mission is successfully implemented over the next few years.
Note: This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy. CRISIL has rated over 91,000 MSMEs in India.