Development – Development and Governance

How British Rule changed our Cities and Towns forever

Posted on January 6, 2023 by NASRIN SIDDIQUI

Published in Times of India, Pune in November 2018. Lost and found. Posted here for you.

As one grows older, one realizes that life has no ‘undo’ button. Life happens – and our best intentions and greatest plans finally amount to little. The same is true with the life of nations. We can, at best, understand history – not change it. So even as we lament about the excesses of colonial rule, there is no escaping the fact that British rule had an irreversible and far-reaching impact on the way we live and work in our cities today.

In the pre-colonial days, our cities grew organically from the soil and represented old pieties and practices – so we had temple towns, pilgrim centres, handicraft hubs, agricultural market towns, fortresses and royal capitals studding every corner of India. The British, however, were to greatly change this timeless landscape with the addition of 5 new types of urbanization: port cities, railway towns, cantonments, hill stations and mining centres.

As the British consolidated their dominion over India, the growing railway network provided connectivity and allowed them to centralise their two essential functions of maintaining law and order, and collecting taxes. This required a centralised bureaucracy and the ‘steel frame’ is still with us today – rusty, creaking and neither trained nor qualified to tackle the immense challenges of unplanned urbanization and growing informalisation.

The centralization of power and authority, coupled with a deep distrust of the ‘natives’ was formalized in the mother of all municipal laws – the Bombay Municipal Act of 1888. And its archaic provisions still govern our cities and towns, through the various Acts it has spawned on the sub-continent. Even today, despite modifying the Constitution through the 74^th Amendment in 1992, little or no true power has percolated down to our municipal bodies – which are the third tier of government. Their powers to raise taxes have eroded through the years, with the GST regime dealing the final blow, and State and Central allocations to municipal bodies remain largely arbitrary and politically coloured.

The third deep impact of British rule has been on our town planning and urban land use. With the British nostalgia for creating ‘a green and pleasant land’ in the distant tropics, the planning laws were too short-sighted for a country as densely populated as India where low-form urbanization would be entirely unsuitable. To now densify Indian cities by raising FSI just isn’t practical because there is a limit to how much the existing infrastructure can cope with (water supply, sewerage, power lines) and retrofitting infrastructure is extremely expensive – and chaotic. The result has been urban sprawl – and in the absence of efficient public transport, expensive and time-consuming commuting.

With these planning norms, we also inherited strict development control rules which require such high standards of construction that the poor have no option but to go informal, simply because they build their houses incrementally, as and when they have the resources. Our town plans also do not provide for informal enterprise, hawking areas, or waste collection and processing within the city limits.

We also continue to be bound by that other British gem – the Land Acquisition Act of 1894. Despite attempts to modify it in 2013 and remodify it two years later, its interpretation has been left largely to the discretion of State Governments and is consequently mired in controversies, scams, litigation and land mafias.

Finally, the most ticklish and controversial legacy of the British – Cantonments. And who better to understand the problems this creates for urban governance than the people of the Pune Metropolitan Region, blessed as we are with 2 Municipal Corporations and 3 Cantonment Boards. How can any wizard conjure up a Development Plan for this city without stepping on a thousand toes?

Pune is indeed proud to host so many techno-military establishments, but why can’t these establishments be part of a common urban landscape, availing the services and paying the taxes of a SINGLE municipal body, as other civilian and scientific establishments do? Isn’t it time to ‘trust the natives’ 70 years after Independence? Imagine the CBD that a Singapore planner could develop in that vast swathe of prime urban land from Sachapir Street to the Race Course and from Poona Club to St Mary’s – it is, after all, almost entirely under civilian use, so why can’t it have a civilian makeover? It is said that the cantonments are the lungs of Pune, but there are alternatives. Planned high rise development interspersed with vast open and green eco-friendly public spaces are the modern option in cities across the world, and would sit well with Pune’s hills and dales.

To end, let us give the devil his due: The British formalized urban governance in India, and municipalities were endowed with powers of taxation as far back as 1850. The creation and development of port cities put India on the map for world trade, while industrial technologies and the railways speeded up our modernization. Finally, the legacy of modern education, scientific temper and the English language has put India at the forefront of a globalized world and on a trajectory to the future. All thanks to those firangis…

Development and the Informal Urban Economy

Development, Published Article, Urban Issues

Development should never mean just flyovers and roads

Posted on December 4, 2022December 4, 2022 by NASRIN SIDDIQUI

Published in Times of India, Pune on 4 July 2019. Lost and found. Posted here for you.

Development at its most basic may be defined as ‘directed growth‘. And that direction is decided by the type of government in power and its ideology: some may look upon development as building infrastructure, others as building human capital.

Conservative governments throughout history have looked upon ‘development’ as an opportunity to leave their mark on history and the landscape quit literally. Great kings have built pyramids, palaces, highways, aqueducts, temples, churches and mosques for their sprawling capitals – and in modern terms, when a government has a 5-year timeframe to work in, it makes more sense to build flyovers, than plant trees.

This idea of development as physical infrastructure took root soon after Independence, when heavy industries like steel were in a boom period across the world, and oil was cheap. So, with an abundance of steel one naturally built skyscrapers, bridges, towers and railways.

Heavy infrastructure of this kind naturally congregates around big metros, which soon become overcrowded and environmentally noxious. There also comes a tipping point when the old residents begin to curse the newcomers to their city and local governments cannot spare the resources to service fringe areas adequately. As urban sprawl takes over, a planned city becomes slowly unplanned…

Meanwhile the small towns in the surrounding region resent this skewed development and keep sending their young to these overcrowded metros to seek their fortunes, because urban planners concentrate their efforts only in the big cities – and soon we all end up living in urban hell!

This tendency to equate development with roads, bridges and flyovers has several negative consequences:

Firstly, although investment in infrastructure may raise economic activity and thus the GDP, it doesn’t really create secure, long-term employment in the country. Most infrastructure projects are designed and executed by people already in permanent government jobs in the railways or PWD, and the future maintenance of the infrastructure will be in the hands of the permanent employees of the municipal corporation, so no new long-term jobs are created. Only a very few temporary, low-skill jobs may be created during the construction phase, with little or no impact on the labour market.
Secondly, if a government is obsessed with creating just infrastructure, there is always a tendency to bend the environmental guidelines to expedite land acquisition for projects, with disastrous consequences for the biodiversity and natural safeguards of the project area. The draining of the mangrove swamps of Kurla for the Bandra-Kurla Complex is now accepted as the primary cause for the repeated monsoon flooding of Mumbai, and something similar has happened to Nagpur with the unnecessary concreting of all its roads. It is axiomatic that the number of vehicles in a city will rise as the road network of a city expands, and it is the unprecedented growth of roads and fly-overs which has added to Delhi’s breathing problems.
Thirdly, single-minded concentration on infrastructure draws public funds away from basic services like education and health care, which are the true cornerstones of achieving ‘human’ development in a society. Without adequate attention to education, health and nutrition, countries like India risk losing their demographic dividend of a young society. And this only aggravates the schisms and tiers in society as future generations have to compete for every crumb of a rapidly shrinking pie.

It is noteworthy that ALL three of Asia’s tech giants first invested in the universalisation and then the vocationalisation of education, to literally lift themselves up by the bootstraps and resurrect their devastated economies: Japan after WW2, South Korea after the Korean War, China after the Cultural Revolution. Only after attaining a fair and equitable human development did these countries move into mega infrastructure development.

India meanwhile, did build up a welfare state after the ravages of colonial rule, but somewhere in the heady days of the IT revolution of the 90s, we seem to have lost track and opted for more visible and tangible signs of connectivity as development, which has unfortunately only made the rich richer, and left vast swathes of India’s population far, far behind.

Post-Independence, India also had the vision to set up a world class infrastructure for higher education, science and technology, but somehow these elite institutions came at the cost of universal education, and hinterland India had to be satisfied with a Green Revolution.

Consequently, India entered the twenty-first century with a billion-plus cell phones but not enough drinking water in every village. In fact, we have all recently seen villagers pointing to toilet blocks and pavements as proof of the ‘development’ brought in by a, b, or c although their eyes cloud over with doubt if asked about jobs, their children’s future and better livelihoods.

The fall-out of this singularly material approach has been the great Indian tradition of offering last minute freebies just before an election (an approach that ALL political parties are guilty of.)

It’s like keeping an excellent racehorse thirsty the night before a big race, and just before starter’s orders, giving it a large bucket of water which it laps up. The wretched horse will run its heart out in gratitude, but with a belly full of water, it can never win a race.

And the punters who bet against the poor horse will carry their winnings away, laughing all the way to the bank. Such is life!

Infrastructure Projects in India

Development

Whither Indian Healthcare?

Posted on January 1, 2016November 22, 2018 by NASRIN SIDDIQUI

Spending most of December in hospital, fighting a life-threatening disorder like GBS and shedding 11 litres of one’s precious plasma, does tend to focus one’s mind on the necessities of life we so often take for granted – like health care. With 16 days in a private room in a private hospital (including 3 awful nights in intensive care) I was presented with a bill which was over 31 times the average monthly income in India in 2015. Lucky me – I recovered 77% of this from my (private) insurer, but the balance was still a bit of a pinch. But life and health being too precious to put a monetary value on… blah… blah…

So what happens to an average Indian when faced with a health crisis like this? Good question.

Healthcare in India is literally on the horns of a dilemma: with 80% of the health infrastructure in the private sector, the medical insurance coverage is a mere 5%, limited almost entirely to the urban, educated, middle classes in India’s larger cities. So where shall the twain meet? In the last few years, the Government has made it binding upon private hospitals to reserve a certain number of berths for low-income patients, whose treatment will be free and is often subsidized by government. Moreover, subscribers to group insurance schemes like Central Government employees can now be treated at the best private hospitals, unlike before, when they could only go to government-owned facilities.

But this coverage is still extremely inadequate, and likely to remain so, as India still spends only around 4% of its national GDP on healthcare. With the growth of medical ‘tourism’ and the proliferation of large specialty hospitals in the metros, the gap between rural and urban healthcare increases day by day, and this deprivation in rural areas is very debilitating for India, as two-thirds of its population still lives in rural areas. Moreover, even in urban areas with the best medical facilities, the high out-of-pocket expenditure can cause severe hardship especially among the working classes, where an illness within the family can impoverish an entire household, and send it crashing below the poverty line.

The public sector is handicapped by poor infrastructure in rural areas, unwillingness of trained medical staff to serve in villages, absence of standardized diagnostic procedures and information systems, and an underdeveloped medical devices sector. There are various panaceas on offer, depending on your ideological stance: the free market enthusiasts see immense opportunities for the private sector in healthcare in everything from insurance, to pharmaceuticals to diagnostics. Those with a more pro-poor bias call for much greater government investment and regulation, so that private insurance companies do not set the agenda for India’s healthcare, as they already do in the USA.

I personally believe that the Nehruvian mix of a public sector conscience and private sector expertise may be the honourable middle road towards a more just and equitable healthcare system in India – and out of its present quagmire. A happier and healthier 2016 everyone!

Development

Business as usual – and damn the environment!

Posted on August 8, 2015November 22, 2018 by NASRIN SIDDIQUI

Two stimuli for this post: the first being John Grisham’s searing novel Gray Mountain, about the havoc wreaked by Big Coal on the environment and people of small town Appalachia, in the United States, aided and abetted by unscrupulous law firms and corrupt politicians; and Donald Trump’s smug assertion that he has been ‘buying up’ politicians for years as a ‘donor’ to campaign funds, in anticipation of seeking their help in his business in the future.

This is termed clientelism and when the clients are big industrialists and businessmen, it soon leads to capture of the economy to favour the rich. This deadly combination is popularly termed as crony capitalism.

Some form of clientelism exists in all democracies where election campaigns are funded by private donations, and is therefore considered ‘legitimate’. However, when the donors call in the favours, that’s when it begins to undermine the very institutions of governance. And that is why clientelism and capture as part of the political culture are more pernicious in the long term, than overt corruption and bribery.

India for the first time in its democratic history has in power a party which makes no bones about its links with big business, and boy are they in a hurry to call in the favours! So first, we had the amendments to the land bill, which virtually gives government carte blanche to acquire any land anywhere to be handed over to private parties for ‘infrastructure’ development. However, for once a united opposition has partially stymied moves to do away with the consent clause and the socio-economic surveys, mandatory in the unamended Act. I say partially, because the Centre can now pass the buck to State Governments, and as its party or allies are in power in the most industrialised States in India, the amendments can still sneak in through the back door.

Already, the State Government of Maharashtra is contemplating an IT Policy offering greater incentives to IT Parks, like a Floor Space Index, or FSI (built-up to open land ratio) of 3 as against the 1 for commercial premises, and 2 for IT Parks. The proposed policy has also diluted the concept of IT-enabled services (ITES) to such an extent that every business which uses computers (practically everyone these days!) can claim ITES status and buy premises in these IT Parks, and get the benefits of lower stamp duty, utility charges and taxes.

The question is ‘cui bono?’ Who benefits? Those self-same industrialists who were granted vast swathes of urban land in industrial zones at throwaway prices a few decades ago, and have let their manufacturing units go under with the influx of cheap Chinese imports. Well they can now build swanky IT Parks on their industrial land, get extra FSI, get tax concessions and sell their offices to alleged ITES companies and make huge profits. Something similar is also in the works for the private Special Economic Zones in the country.

At the rural and tribal level, the government is also taking a much tougher line in dealing with those fighting for the land rights of indigenous people, branding all dissent as a ‘law and order’ problem, and even terrorism. And infrastructure projects are being cleared with such alacrity that environmental concerns are being pushed aside in haste.

The latest sleight of hand comes in the form of the Compensatory Afforestation Fund Bill, 2015, which was introduced in the Lower House of Parliament on May 8, 2015. It essentially allows use of land in a Reserved Forest or Protected Area for infrastructure projects, upon the payment of a levy, which goes into a Compensatory Afforestation Fund, allowing for the planting of trees in another location, to compensate for the area of forest lost. But as every schoolkid knows, trees alone do not a forest make. What about bio-diversity? Or the displaced forest dwellers? Or the wildlife? The environmentalists can shout themselves hoarse, but who cares, so long as the area has a new power plant, a new 6-lane highway, or whatever…

The rest of the world has closely scrutinised and criticised China for such development policies, but as the major beneficiaries of India’s ‘development’ are likely to be western MNCs, the global environmental and human development community is suspiciously silent.

In fact, in a recent infographic on the world’s 15 most polluted cities (based upon data from the World Economic Forum), Statista expressed surprise that these cities are not in China, as every westerner expected, but in India and Pakistan!

So tell me about it!

Development

Beyond the Millennium Development Goals

Posted on May 2, 2015November 22, 2018 by NASRIN SIDDIQUI

In developing countries, 2015 is a year of particular interest because it is the deadline for achieving the various targets under the Millennium Development Goals. To recap, the United Nations Development Programme (UNDP) saw a new hope for global action in the dawn of a new millennium, and this took the shape of the 8 Millennium Development Goals, which have shaped the development policies of many a nation for the last decade and a half.

The original Millennium Development Goals, and their targets, were:

GOAL 1: ERADICATE EXTREME POVERTY AND HUNGER

Halve, between 1990 and 2015, the proportion of people whose income is less than $1.25 a day

Achieve full and productive employment and decent work for all, including women and young people

Halve, between 1990 and 2015, the proportion of people who suffer from hunger

GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN

Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015

GOAL 4: REDUCE CHILD MORTALITY

Reduce by two thirds, between 1990 and 2015, the under-five mortality rate

GOAL 5: IMPROVE MATERNAL HEALTH

Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio

Achieve, by 2015, universal access to reproductive health

GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES

Have halted by 2015 and begun to reverse the spread of HIV/AIDS

Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it

Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

GOAL 7: ENSURE ENVIRONMENTAL SUSTAINABILITY

Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources

Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss

Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation

Achieve, by 2020, a significant improvement in the lives of at least 100 million slum dwellers

GOAL 8: DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT

Develop further an open, rule-based, predictable, non-discriminatory trading and financial system

Address the special needs of least developed countries

Address the special needs of landlocked developing countries and small island developing States

Deal comprehensively with the debt problems of developing countries

In cooperation with the private sector, make available benefits of new technologies, especially information and communications

As almost all the MDGs deal with different dimensions of poverty, the question to be asked here is how well (or badly) have the two demographic giants on the planet fared? Because the MDG targets basically dealt with halving this or that indicator, the expectation never was that poverty would indeed be eradicated in 15 years. It has been tackled with vigour in both India and China, and yet they have a long, long way to go:

While China has largely secluded its poor in the countryside, India’s poor are everywhere – on street corners in the big metros; among the ill-educated and underemployed of the small towns, living lives of quiet desperation; amidst the small and marginal farmers with an anxious eye on the next monsoon which could spell the difference between choosing to live and choosing to die; and the poorest of the poor in the tribal districts of the country, with no private land to till, and all community resources lost to the greedy contractor.

Many, like this blogger, have been trying to get the present government to look at the state of the nation’s poor, rather than posturing abroad to gain foreign direct investment – but to no avail. Well, if they don’t listen to us, they may perhaps listen to the 7.3 million people worldwide who are saying precisely the same thing. This was the number polled by UNDP in setting the goals for the next 15 years for all the countries in the world.

Given the global concerns with issues like growing carbon footprints, climate change, and unsustainable development, the new goals targeted for 2030 are known as the Sustainable Development Goals, and are more than twice as many as the original MDGs. They are:

End poverty in all its forms everywhere
End hunger, achieve food security and improved nutrition, and promote sustainable agriculture
Ensure healthy lives and promote well-being for all at all ages
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Achieve gender equality and empower all women and girls
Ensure availability and sustainable management of water and sanitation for all
Ensure access to affordable, reliable, sustainable and modern energy for all
Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all
Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation
Reduce inequality within and among countries
Make cities and human settlements inclusive, safe, resilient and sustainable
Ensure sustainable consumption and production patterns
Take urgent action to combat climate change and its impacts
Conserve and sustainably use the oceans, seas and marine resources for sustainable development
Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification and halt and reverse land degradation, and halt biodiversity loss
Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
Strengthen the means of implementation and revitalise the global partnership for sustainable development

Lest we forget…

The Indian electorate does have a proclivity for throwing out governments which contemptuously ignore the poor – at the State level, and the Centre. Smart cities and busy expressways just don’t cut it with the village mother whose child has to trudge 10 kilometers to school – through rain and shine…

Development

Putting Children First

Posted on March 25, 2015November 22, 2018 by NASRIN SIDDIQUI

It was very disturbing to read that in the USA, the world’s largest economy, the miniscule super rich are steadily growing richer, while child poverty is on the rise. And there has been a lot of finger pointing, as the US is now the only country in the world which has not ratified the UN Convention on Rights of the Child.

So what exactly is the Convention on Rights of the Child (CRC), and has it been followed both in letter and spirit in the countries where it was ratified, with such alacrity, nearly a quarter of a century ago?

The CRC is based on other Human Rights Conventions, and a wide range of indicators are regularly measured to make sure that all children’s rights mentioned in the Convention are being realized. The source agency for this data is, of course, UNICEF.

So let us take a quick look at what the CRC expects, and the reality on the ground:

CRC: Birth registration and migration: Every child has the right from birth to a name, a nationality and to know and be cared for by parents.

Fact: Worldwide, 79 per cent of the richest children under the age of 5 have their births registered, but only 51 per cent of the poorest enjoy the right to an official identity. And while 80 per cent of children living in cities are registered, this is true for only 51 per cent of those living in the countryside.

CRC: War: States Parties shall take all feasible measures to ensure that persons who have not attained the age of fifteen years do not take a direct part in hostilities.

Fact: Africa has had a long and sad history of child soldiers for several decades now

CRC: Poverty: Every child has the right to an adequate standard of living

Fact: The richest 20 per cent of the world’s women are 2.7 times more likely than the poorest 20 per cent, to have a skilled attendant present at delivery. In South Asia, the richest women are nearly four times more likely than the poorest to have this benefit.

CRC: Child Survival, Health, Vaccination, Immunization, Water and Sanitation: Every child has a right to life. Governments should ensure that children survive and develop healthily. Every child has a right to health and health services

Fact: The poorest 20 per cent of the world’s children are twice as likely as the richest 20 per cent to be stunted by poor nutrition and to die before their fifth birthday. Children in rural areas are at a similar disadvantage compared to those who live in urban areas.

Fact: Nearly three quarters (or around 1.8 billion) of the 2.5 billion people around the world who still have no access to improved sanitation, live in rural areas. Data from Bangladesh, India and Nepal, for example, show little progress between 1995 and 2008 in improved sanitation coverage among the poorest 40 per cent of households.

CRC: Children with disabilities: All children with disabilities should enjoy a full and decent life, in conditions that ensure dignity, promote self-reliance and facilitate the child’s active participation in the community

CRC: Female genital mutilation/cutting (FGM/C): States Parties are obliged to take all effective and appropriate measures to abolish traditional practices prejudicial to the health of children.

Fact: Adolescent girls are more likely to be married or in union by age 19 than their male counterparts, and less likely than boys to have comprehensive knowledge of HIV. In South Asia, boys are almost twice as likely as girls to have this knowledge with which to protect themselves.

CRC: Education: Every child has the right to an education

CRC: Corporal punishment in schools: Every child has the right not to be subjected to torture or other cruel, inhuman or degrading treatment or punishment.

Fact: Nearly 9 in 10 children from the wealthiest 20 per cent of households in the world’s least developed countries attend primary school – compared to only about 6 in 10 from the poorest households. The gap can be dramatic even in lower-middle-income countries. In Nigeria, for example, 94 per cent of children in the wealthiest house- holds attended school, compared to 34 per cent of children in the poorest households.

Fact: Regardless of wealth, girls continue to be held back from schooling. For every 100 boys enrolled in primary school in West and Central Africa, only 90 girls are admitted. The exclusion is worse in secondary school, where only 76 girls are enrolled for every 100 boys.

CRC: Participation: When adults make decisions that affect children, children who are capable of forming their own views have the right to express those views freely in matters affecting them, and adults will take those views into account, in accordance with the age and maturity of the child.

CRC: Sport and play: Children have the right to rest and leisure, to engage in sport and play and recreational activities appropriate to the age of the child, and to participate freely in cultural life and the arts.

CRC: Child labour: Every child has the right to be protected from hazardous or harmful work and from economic exploitation.

My own country, India, has a rather sorry record in matters dealing with children, in comparison with other BRICS countries, a group it is very proud to be a member of:

And as we talk of development all the time in this country, just how many new programmes has the present government announced to realize the rights of the child? ZILCH.

Footnote: When I returned from my first visit to China, I was asked by my friends about the people and their attitude to life. Most Indians picture the Chinese as inscrutable, unsmiling automatons, living rigidly controlled lives of quiet misery, despite their shining cities. What could I say? It had been the month of August, the annual school break, and there were Chinese children everywhere – on the Great Wall, in the Shanghai Tower, in the myriad malls, on Nanking Street, in the museums… Laughing, healthy and happy children cheekily practising their English on us, and clicking selfies with their exotic neighbours from across the border… And it broke my heart to see the hungry, dirty street kids begging at every traffic light when I returned home.

What is so wrong with India that a little real ‘development’ and compassion cannot mend, I wonder…

Development

Development and the informal urban economy

Posted on November 13, 2014November 22, 2018 by NASRIN SIDDIQUI

The term informal economy was coined by social anthropologist Keith Hart in 1971, while working in West Africa. It is:

The survival economy of the poor, whose individual economic transactions do not ever rise to the taxable limit;
The grey zone of commercial exchange, where the worker offering his labour allows the mainstream economy to subsidise itself.

It should be remembered that the informal economy thrives and grows, only because the formal economy finds it the most cost-effective means of earning profit. In reality, being undocumented and unregulated, the informal economy weakens the national economy in the long run:

By pushing more and more of its practitioners deeper into poverty
By dissipating India’s age advantage, as deprivation leaches away at the human potential of generation after generation, denied access to education and skill building
By operating below the tax radar and denying taxes to the local, State and Central Governments
By untold damage to the urban environment, as a consequence of little or no monitoring or regulation

The informal economy in large cities manifests itself in 3 ways:

Informal INDUSTRY
Informal ENTERPRISE
Informal HOUSING

Informal INDUSTRY is usually based upon an investment of a few thousand rupees, seldom exceeding one lakh. Thus the assets created are too meagre to warrant capital financing by banks in the formal sector. Moreover, as the eminent Peruvian economist Hernando de Soto pointed out, the reason that poor countries (like India) remained poor is:

“… the absence of a representational system that converts every asset, every liability, every land, every building, every inventory and every business into a property document, thus making it visible to the larger formal economy.”

In the absence of such a representational system, the assets of the poor in the informal sector cannot become fungible assets and remain as dead capital, unable to benefit their owners. With conservative estimates putting 60% of India’s economy in the informal sector, these assets if formalized, can become an immense national resource, besides bringing millions into the formal economy, easing poverty and augmenting India’s tax collection by a huge quantum.

Informal ENTERPRISE can benefit greatly through changes at the local government level. The current policy on street vendors is nebulous to say the least, and only results in endless harassment for this segment, whose contribution to the retail trade is grossly underestimated. Well-meaning efforts to provide hawkers’ zones have failed, primarily because they overlook the Unique Selling Point (USP) of street hawking in India – the mobility of the hawker, as he passes through one neighbourhood after another providing his services and wares on demand, when needed and where needed.

Imagine how difficult domestic life would be without the periodic visits of the raddiwala or the knife grinder! Local Government can act as facilitator by marking parking spots for street vendors, with a built-in time limit; providing basic facilities like toilets and electricity to weekly street markets; and providing licenced premises for those entrepreneurs with wares to sell from a fixed outlet.

Or like China, we could remove the vendors of trinkets from the streets by building mini-malls on public land like the suburban railway station in Shenzhen, where Indian tourists flock to buy Gucci rip-offs.Examples of such markets/malls abound in India in the ubiquitous Gol Markets found in all our defence establishments. Shops in these malls can be leased out at a reasonable rent for, say, 10 years, which is a reasonable time of security to educate the next generation and enable an entire household to move upwards on the social scale. It is this secure breathing space which will move millions of urban poor from the struggling classes to the aspiring classes – so eagerly wooed by all our politicians, come election time.

That this great social change is achievable, is borne out by the experience of our blue collar workers who went and sweated their life’s blood on the desert sands of the Gulf in the 80s and 90s, so that their daughters and sons could become neurosurgeons and IT engineers. Within the span of a decade, the community changed from blue to white collar.

Informal HOUSING (or ‘slum’ as it is derisively called) has become the hallmark of all metros in the developing world, from Rio to Lagos to Nairobi to Mumbai. The evolution of slums in post-Independence India is the stuff of legend, on which many a career in New Wave Cinema of the 1970s was built….

Several studies during this period revealed that the typical migrant to urban areas was a semi-skilled or skilled male, 18-35 years old, who sent a major share of his earnings back home to support his family. Housing was a low priority for such a person and he was ready to squat or settle at any location which cost him the least of his hard earned money. The social vacuum created by a separation from rural roots was compensated by congregating along ethnic, caste, linguistic and regional lines, and such arrangements provided a strong social support system to compensate for the break-up of the rural extended family.

The downside of this has been ghettoisation, which not only enhances strife and bigotry, but provides easy mobilisation in violent crises – be they communal riots, industrial unrest, or underworld gang wars.

In planning terms, the assumption that slums and urban poverty were co-extensive and coterminous led to numerous ad hoc ‘slum improvement’ schemes at this time, where it was naively assumed that upgrading living conditions in slums in a piecemeal fashion, would eliminate the scourge of poverty from our towns and cities.

But as the research and information base has grown, it has become clear that the relationship between urban poverty and slums is both tenuous and complex – especially as a second generation of slum dwellers, with few choices and little upward mobility, begin to emerge on the urban scene. They can look forward to a life only in the informal economy of the city, and given our antediluvian civic laws, even a new-born child in such a household, breaks a dozen laws as he draws his first breath… (Hope to share some interesting insights on slums in Census 2011,in a future Post)

During the 1980s, urban slums could no longer be seen as extensions of rural poverty and became more or less autonomous. As thriving, self-sustaining social systems in their own right (Dharavi being an example), urban slums were no more synonymous merely with urban poverty. Thus while urban poverty incidence has declined between the early 1970s and the late 1980s, there is no evidence of any decline of the slum population. As a result, fewer people have access to safe drinking water and nearly 70% are reported to be without basic sanitation. Poor housing, infrastructure and urban services are the problem, not poor people.

It is the failure to perceive this key point that has undermined most poverty alleviation programmes. As a UBSP Benchmark Survey (NIUA:1997) rightly points out …

“Since it is assumed that those living in slums are poor, there is very little effort to affect cost-recovery for improvement work or collect user charges for services when provided, even though the capacity to pay may exist among a substantial proportion of the slum dwellers. This reduces the resource potency and the scope for expanding the coverage to include those who are at the lower side of the poverty ladder.”

The consequences of regarding urban poverty and slums as co-extensive and coterminous have been largely negative:

Once a slum is recognized as such, subtle political forces prevent it from ever becoming de-notified and this has stigmatised entire communities of urban poor, doomed to be labeled ‘slum-dwellers’ for generation after generation
As a result, slums become powerful vote banks and can be mobilised for various anti-social activities like crime, extortion, land grabbing, strike breaking and communal violence
The various slum upgradation schemes set up an unsustainable regime of subsidies, inculcating the same dependency syndrome among beneficiaries, which was earlier seen only in Indian villages
Providing basic services in slums was made synonymous with poverty alleviation, and the neglect of health and education in urban slums continues to eat away at the human potential of slum populations, pushing them further and deeper into unemployment, under-employment and the informal sector
On the side of local government, there is a tendency to underestimate the ability of the urban poor to pay for services and they have to learn to ‘do without’ these services
Slum schemes with their emphasis on shelter and basic services, neglect informal enterprise, and compound the problem by making no effort to integrate the informal slum economy within the larger city economy
Almost all housing schemes continue to neglect the key issues of access, security of tenure, and affordability and it is this – the most visible housing dimension of urban poverty - which continues to scar Indian cities
Finally, with the entry of private commercial interests into slum rehabilitation projects as under Maharashtra’s SRA, there is a danger of encroached government and municipal lands passing forever into private hands.

Perhaps Indian cities can take a leaf out of Singapore and China’s public housing and long-term lease policies to ensure development with equity. Summarising, one sees endless opportunities for doing something to formalise India’s growing urban informal sector, but these measures will take a long time to produce results, and a polity in its eternal 5-year rat-race is highly unlikely to take the trouble.

Especially one so notably in favour of the rich that it is willing to cast even the formal sector workers’ rights on the dust heap; change land acquisition laws without a thought for the rehabilitation of those affected; and dilute environmental strictures – all in the name of ‘development’!

This is what I meant about the direction of growth we are now stuck with, at the start of these series of posts…. Hope to look at Governance next time round…

Development

Development and the Rural-Urban Continuum

Posted on November 10, 2014November 22, 2018 by NASRIN SIDDIQUI

A nation which has forgotten its history is doomed. That is why, if we are to understand why Indian towns and cities are the way they are, we need to go back at least to British colonial times…

Every schoolchild knows that the East India Company was here primarily to trade, and stayed on to rule. Therefore the urbanization of India (as in other colonies) concentrated on the development of port cities at Madras, Bombay and Calcutta; Cantonments for the mobilization of the army to maintain law and order; and railway towns to move goods and soldiers as required.

The British were never interested in developing the hinterland – only in exploiting it – and concentrated all facilities like Universities and Hospitals in the cities and towns they created and inhabited.

Meanwhile, the pre-colonial towns and their hinterland went into steady decline, and millions died in the regularly occurring famines in India. The situation is best summed up by that consummate and accessible historian, and our first Prime Minister, Jawaharlal Nehru in The Discovery of India:

“With the developments in industrial techniques in England a new class of industrial capitalists rose there, demanding a change in policy. The British market was to be closed to Indian products and the Indian market opened to British manufactures…The Indian textile industry collapsed, affecting vast numbers of weavers and artisans…

The liquidation of the artisan class led to unemployment on a prodigious scale. What were all these scores of millions, who had so far been engaged in industry and manufacture, to do now? Where were they to go? Their old profession was no longer open to them, the way to a new one was barred. They could die of course; that way of escape from an intolerable situation is always open. They did die in tens of millions. The English Governor General of India, Lord Bentinck, reported in 1834 that ‘the misery hardly finds a parallel in the history of commerce. The bones of the cotton weavers are bleaching the plains of India.’

All these hordes of artisans and craftsmen had no job, no work, and all their ancient skill was useless… So they became a burden on the land and the burden grew, and with it grew the poverty of the country, and the standard of living fell to incredibly low levels… India became progressively ruralized.”

Couldn’t have said it better myself!

The Census of India in 1961, defined an urban area as:

– Firstly, those settlements that were given urban civic status, like corporation, municipality and cantonment by the State Governments, and were recognised as ‘statutory’ towns.

– Secondly, ‘census town’, applied to areas which met the following criteria: (1) population size of 5000 or more; (2) density of at least 400 persons per square kilometre; (3) at least 75% of the male workers to be engaged outside agriculture.

As urban development is a State subject in the Constitution of India, there is quite a bit of variation in identifying Statutory Towns across States, making comparisons difficult. State Governments have been declaring overgrown villages as municipalities with great alacrity, often in the neighbourhood of existing metros. As these metros expand, land-owners on the periphery acquire overnight wealth and in order to match their new economic clout with political power, displace the traditional landed elite by the simple expedient of having their home village declared an urban area.

According to the Government of India Census 2011 there are 7,935 urban centres or townships that house the 377 million urban citizens of the country. Of these, the 53 million-plus urban agglomerations account for 160.7 million persons (or 42.6%), and the remaining 217 million – or more than half of the total urban population of India – live in small and medium sized towns.

For example, in Maharashtra there were 26 Municipal Corporations with population > 3,00,000; 12 Class A municipalities (1,00,000-3,00,000 population) ; 61 Class B (40,000-1,00,000 population);152 Class C (< 40,000) and 13 Nagar Panchayats, as notified.

There is news today that the Government is planning to develop these small towns by opening BPOs! Of course, where they will find the manpower in such places to make a success of it, does not trouble the policy announcers! Nor can mowing down these towns as part of developing ‘industrial corridors’ provide sustainable livelihoods – it will only bring displacement of native populations, loss of agricultural land and water and air pollution.

Can we not, therefore, look at the larger picture and convert our small towns from the problem to the solution?

Even the most cursory survey will show that no more than 40% of the adult population of the ‘C’ Class municipalities is employed in non-agricultural activities (which, incidentally, contravenes the 75% criterion for urban areas outlined in Census 1961). Already, these smaller towns are intimately tied to the agrarian foundations of the country, informally networking tens of thousands of villages with regional and national markets.

It is argued that with adequate resource allocation and infrastructure development, this network could be formalized, and extended into the global arena. Such a network would sustain the agricultural economy regionally and globally, and also become the base for the industrial, manufacturing and service sectors by providing competitive labour. Such a development would not only lead to more balanced economic growth, but also prevent distress migration to the metros, by tertiarizing rural economies.

With 60% of the population of the smallest of these municipalities already engaged in agriculture, they provide the ideal hubs for the tertiarisation of the rural economy through the development of agro-industries and food processing and storage. Once the agro-industries sector is well developed, we can consider FDI in retail without jeopardising rural livelihoods.

Where handicrafts are the main industry, this networking could be developed on the basis of workers’ collectives. There is the classic case of a village in Rajasthan, where the main industry was the manufacturing of mojri shoes. Thanks to the initiative of a development agency and local NGO, a workers’ collective was created, the entire manufacturing process was streamlined and standardised, and the collective was soon flush with export orders from places as far afield as Japan and the US!

The success of sugar cooperatives in Maharashtra (like Warananagar and Baramati) is strong evidence of the success of cooperative farming, food-processing units, workers’ collectives and SHGs in making these places the hub of India’s growing food and agro-industry. That is the way to prosperity and elimination of local poverty and eventual prevention of emigration to bigger metros.

In my next Post, I hope to touch upon the larger cities and ways to stem informalisation, and address at least some of the issues arising from the growing urbanisation of Indian poverty…

Development as directed growth

As Mr Narendra Modi has managed to sell the development mantra to two of the most economically important States of India – Haryana and Maharashtra – we need to take pause and reflect on what exactly this development implies.

At its most basic, development is ‘directed growth’, so while economic growth qua growth seems a laudable objective, the direction of this growth is most important, if development is to provide sustainable livelihoods to all Indians.

Isn’t that what the aspiring classes aspire to?

Immediately after Independence, India’s growth was headed in the right direction where food security in the famine riddled countryside became the top national priority resulting in the Green Revolution. Simultaneously, new industries took shape in the public sector and the new steel plants became the new temples of Modern India.

It was Nehruvian vision that also saw the creation of IITs, IIMs, TIFR, BARC and several institutions of higher learning, which were to provide India with the necessary manpower in time for the information revolution and the nuclear age. (Ironic indeed that the beneficiaries of Nehru’s vision are today so eager to write him off the pages of India’s history!)

However, this vision became somewhat blurred in the post-Nehru era and things spiraled out of control in both the rural and urban areas throughout the 1970s and 80s, culminating in the near bankruptcy of the country in 1989. The economic reforms that followed in 1991 – and have become the common guiding light of both the Congress and BJP – did succeed in creating a high consumption middle class, but also sharpened the socio-economic divide to the point that there is no serious discussion today on poverty alleviation and subsequent human development, at either end of the ideological spectrum.

While the post-Independence development strategy averted a major crisis in the tenability of the idea of India, it had TWO long-term effects on the sustainability of development:

Firstly, the stress on agricultural production during the Green Revolution relegated the rural economy to the primary or extractive sectors, effectively preventing its tertiarisation, thus making RURAL growth unsustainable in the long run;
Secondly, the neglect of urban areas and the emphasis on elitist rather than universal education led to the spiraling informalisation of the urban economy, making URBAN growth unsustainable in the long run.

The Garibi Hatao philosophy of the 1970s spawned programs like IRDP, which were essentially a transfer of subsidies to those below the poverty line, and this practice has continued in one form or another through the Jawahar Rozgar Yojana, the SGSY, and MNREGA. That the main beneficiaries of these subsidies were the big land-owners, is another story…

While, there are many reasons for the indifferent impact of these schemes, they have collectively created such a culture of dependency among the rural poor, that individual enterprise and self-help has become rare enough to be eulogised in management textbooks as a ‘best practice’… Anna Hazare’s Ralegan Siddhi being a case in point.

The continuation of similar subsidies by the present government, directly or indirectly, will only perpetuate this dependency and fuel further distress emigration to urban areas.

The failure to move rural economies to the secondary and tertiary sectors also means that rural households do not have an alternative source of income, and a single crop failure can tilt the balance towards utter desperation, leading at worst to farmers’ suicides; or at best to emigration to the nearest metro.

This exclusive dependence on agricultural livelihoods also skews the societal landscape of the village, where the amount of land one holds decides everything from one’s status to access to basic services and one’s political clout.

The eminent social anthropologist M N Srinivas rightly asserted that the politics of rural India is the politics of Dominant Caste. He defined Dominant Caste by 3 criteria:

– Firstly, numerical strength
– Secondly, a place not too low in the ritual hierarchy
– Finally and most importantly, LAND OWNERSHIP

And because land ownership is almost entirely hereditary, it forecloses all opportunities for social mobility for those born into landless households. Is it any wonder then, that the majority of India’s poor (67%) live in the rural areas, and the poorest of the poor are landless labourers, who tend to belong to Scheduled Castes and Scheduled Tribes, who are the worst off, because tribal societies have historically had communal, rather than individual, ownership of land and its resources.

Dominant Caste politics also enables the powerful to deliver an entire village, district or region to a single party come election time, and we saw this phenomenon (of the ultimate vote banks) at its greatest potency in Uttar Pradesh in 2014.

How can a country where the future of a majority of its citizens is decided by an accident of birth ever become a world leader? Isn’t Development meant to break these social barriers – like gender and caste?

It should be understood that poverty implies not only denial of basic necessities like food and shelter but also denies or limits access to basic social services like education and health, which are in any case extremely inadequate to start with, because we never made the investments needed in social infrastructure for the world’s second most populous nation.

Added to this is a virtually non-existent social security net – and chronic deprivation, low life expectancy and the world’s highest malnutrition is the sad reality of India today.

The urban landscape has hardly fared better. It is estimated that almost 68% of Mumbai’s economy now falls in the informal sector while the figure for Chennai and Delhi hovers around 60%.

With the proposed dilution of labour laws and added incentives to small and medium enterprises, this figure is sure to grow, bringing in its wake exploitation, tax evasion, deregulation, higher levels of industrial pollution, overwhelmed civic services and infrastructure and greater urban poverty through unsustainable livelihoods.

The continuing and growing informalisation of cities is directly linked to higher unemployment, more crime, and bigger slums through informal housing; as also more black money transactions in daily business… and even a 100 new smart cities will not shine in the increasingly desolate, polluted, drought-ridden, power-hungry and informal landscape that is fated to be the future of Urban India.

Perhaps some direction for tackling both rural and urban poverty may be sought by revisiting India’s recent urbanization, as I hope to do in my next post…

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