Posted in Poverty

Part II: Why poor people remain poor

As I have devoted a couple of posts already to the distress among farmers and rural communities in India, I think it is time to take a look at the growing urbanisation of poverty in the country.

In developing countries like India, most urban workers are self-employed in precarious conditions or are employed on a casual basis without a contract and access to social security. The ILO terms such forms of employment as informal. In most cases, informal employment procures lower, more volatile pay and worse working conditions than employment in formal arrangements, and these informal sectors form the bulk of the urban poor in any country.

The situation has greatly worsened with globalisation, which has deeply fragmented production processes, labour markets, political entities and societies, creating a plethora of interest groups and lobbies which have undermined the integrity of civil society and its rights and entitlements across the world. As a result, the number of permanent secure jobs (even in the formal sector) have given way to contractual/temporary employment, with downsizing, rightsizing and outsourcing becoming the new business mantras. This infographic from Statista puts it very plainly.



Sadly, recent Indian governments seeking their place in a global market are so keen to attract foreign direct investment, that they have lost the national sovereignty to make decisions that benefit their own people, and surrendered control to highly mobile international finance capital. To placate these foreign investors we have begun the privatisation of precious natural resources and shredded whatever pro-labour legislation existed in India, and virtually annihilated Trade Unions in a way that would make Margaret Thatcher proud. But whereas Great Britain had a social security system already in place (in terms of unemployment benefits, old age pensions, compulsory education for the children and free health care), low and lower middle income countries have no such security net for those in distress.

Ergo, once a household falls to the poverty line, it is very unlikely to rise much above it – and therefore the poor remain poor generation after generation.

The vulnerability of the urban poor is exacerbated by the inadequate provision of basic public services, as well as by policy and regulatory frameworks that govern land and housing supply and property rights.

Most of the urban poor do not have tenure security because their dwellings are built on public land or on private property belonging to someone else, or built on shared title land. Further, most dwellings of the poor are constructed without occupancy or construction permits from the municipal authority, or rented in slums without formal renting contracts.

The situation is exacerbated by the inadequacy of planning tools like master planning, zoning and development regulations, in making land available to keep pace with rapid urbanisation, resulting in insufficient land supply and increases in land prices. Master plans in many developing countries like India are too centralised, take too long to prepare, are inherently anti-poor, and fail to address implementation issues or the linkages between spatial and financial planning.

The Development Control Rules too are outdated and inappropriate, often opting for low form urbanisation, redolent of the colonial era. All recent attempts at densification have remained a pipe dream, because it is virtually impossible to upgrade the necessary infrastructure in thickly populated neighbourhoods. Unrealistically high standards for subdivision, project infrastructure, and construction make it impossible to build low-income housing legally, and the poor simply cannot afford to build to these specifications. Furthermore, the poor and low income groups have little or no access to credit, again because of the lack of a representational system to formalise their assets and holdings.

Some of the ways in which the problem of housing for the urban poor has been tackled in different countries include:

  • Some form of transfer of ownership rights to the residents building upon public land
  • Greater flexibility in building specifications, construction materials and infrastructure norms
  • Decentralisation of urban planning
  • Simplification of building permissions and occupancy certification
  • Easier access to housing finance for the poor
  • And a simple transparent system of ownership title which will enable the poor to use their houses as collateral for loans to expand their income generation capability

The lack of adequate and secure housing ultimately aggravates all other dimensions of urban poverty like education, health and income. If a family has no rights of tenure and may not even know where it will rest the night, how are the children going to register in schools and get an education? How will the parents earn a livelihood? How will the family draw the rations from the Public Distribution System to feed itself? And where will the sick find succour?

As the National Commission on Urbanisation lamented in its 1988 report: “For the poor, there is simply nothing…”


I am a trainer of Government Officials and Elected Representatives, specializing in the urban and municipal sector. I have also written extensively on Urban Governance, Poverty, Development, Social Accountability and Municipal Management in the Indian context, and wish to share these writings with you through this blog.

One thought on “Part II: Why poor people remain poor

  1. Well thought out article. But the solution to the problem is not simple as has been presented. The problem is part of the overall governance failure and the burgeoning human greed. Uprooting of rural people for a variety of reasons and their migration to urban areas is another issue that needs to be addressed urgently. The rate at which this migration is taking place i think any master plan is bound to fall flat. Suresh Kalra


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