Opinion - News Analysis   

Taking cities to the people

People are constantly shifting from rural to urban areas in search of jobs. — Photo: A. Roy Chowdhury.

IN THE first four decades of freedom, the assumption was that the economic benefit of investments in big irrigation projects and heavy industries, and of the State controlling the `commanding heights of the economy', would trickle down to the poor leading to their economic betterment.

Unfortunately, it did not.

The revised mantra since 1991 is that liberalisation and globalisation of the economy will do that trick.

Again, it has not and is not likely to, not in the short or the medium term.

What is needed is a `bottom up' strategy involving an innovative paradigm capable of making a difference to the standard of living of the poorest families in the short and medium term.

We frequently talk of `below the poverty line' (BPL) families, but treat them as a mere statistic for economists to argue endlessly about their exact definition or by what second decimal digit their percentage has increased or decreased in a given period.

Why not, for a change, look at the BPL families as persons in flesh and blood, identify their profile and diagnose the basic cause of their plight?

Inelastic resources

It is axiomatic that every village has only two basic economic resources that have to ultimately provide food, clothing and employment to its population: (i) the extent of cultivable land; and (ii) the quantum of water available for irrigating it. Unfortunately, both these resources are inelastic.

Even during the first half of the 20th century, when epidemics periodically ravaged village populations keeping their growth under check, there were scores of poor families in each village. With the eradication of epidemics, the two inelastic economic resources of villages have become inadequate to sustain the ever-increasing numbers.

It is the landless labourers and the marginal farmers who are the first victims of this inadequacy, and therefore fall into the BPL category.

The result is the inevitable and continuous outward migration of these persons looking for sustenance elsewhere — not as mere individuals but as full families.

Between every sunrise and the next, hundreds of rural BPL families are taking independent, isolated decisions to migrate to the nearest cities looking for sustenance in the new milieu.

`Unemployment' in the context of western countries implies paucity of jobs for youths with education or skills coming out of schools, colleges and technical institutes, and for middle-aged, healthy persons (educated or with skills) who had left their earlier jobs for some reason or other. Jobs for such persons are usually created in industry and in the organised service sector through increase in government expenditure.

In the Indian context, on the contrary, even for eking out a subsistence living, almost every member in the family among the rural poor has to be employed — irrespective of age, gender, qualification, skill, or even state of health.

Industry and employment

The conventional wisdom is that for the creation of jobs massive investment, either Indian or foreign, in large industries is the solution.

But modern large-scale industry is technology-driven and the required skills are progressively built into the machines. Moreover, they only recruit workers who are young and healthy. These industries are capital intensive, and the creation of just one job in them involves an investment of lakhs, sometimes even crores, of rupees.

To cite an example, a major automobile manufacturer's new plant required an investment of over Rs.800 crores and created just about 600 jobs (meaning an investment of Rs. 1.33 crores for each job!), all requiring either a degree or diploma in engineering or commerce.

Since most of those recruited are young (mostly in their early or middle 20s), a vacancy will arise only when one of them resigns or dies; creation of jobs in large scale industries at huge cost is therefore meagre and non-repetitive. Such industries are indeed needed, but their main purpose must be seen as efficient and economical production of a large volume of goods, and not direct generation of jobs for lakhs of persons year after year.

Given that a large number of people are living in abject poverty, and that most of them are no longer resigned to their fates as in earlier eras, why is it they have not risen in revolt against the system in large numbers?

Safety nets

One jargon staple with politicians and economists is the need for creation of `safety nets' for the rural poor. New schemes, with innovative names, are assigned in every budget with allocation of token funds, but they hardly ever take off.

If we keep our eyes open, we can see that a safety net has indeed been operating unobtrusively in the economy, but without the Government playing any role in or making any contribution to it, and that it is this that has kept a possible revolt by the poor masses at bay.

This safety net is the `urban informal sector', which has been generating jobs and income for thousands of migrant families from rural areas — and not just for the heads of these families but for every constituent.

A typical and authentic case is that of Munusamy, aged 58, owner of about three acres of dry land in a village near Vellore. His family includes his 52-year-old wife, an 18-year-old son and a 15-year-old daughter.

In years of normal rainfall, the family earned a net annual income of around Rs.6,000 from its own land and another Rs.6,000 by working in others' fields. They had an inherited house to live in and managed to live just above the poverty level.

Successive droughts for two years made Munusamy decide to migrate to Chennai with his family three months back.

With the help of an earlier migrant from the same village, Munusamy secured a job within a week of his arrival in the city as watchman in a new eight-apartment complex. He is frail and not particularly healthy, but his `khaki' uniform deludes the apartment residents on his capacity to keep thieves at bay. He earns a monthly salary of Rs.1,600.

His wife has been able to get employment as servant maid in three of the eight apartments in the complex, getting monthly wages of Rs.400 per apartment. After a month's apprenticeship, the son secured a job as cook in a nearby restaurant. In addition to free food, he gets a monthly salary of Rs.750. The daughter underwent a three-month course in a tailoring school, and is now employed in a garment unit on a salary of Rs.1,500.

This real life illustration exemplifies the potential of the urban informal sector to provide jobs to every member of a rural migrating family in a short time.

Informal sector jobs

Some more illustrations of jobs in the informal sector are: Roadside vendors of vegetables, fruits and flowers; newspaper hawkers; construction workers; street hawkers of various merchandise; domestic cooks; gardeners; employees in petrol bunks, small shops, restaurants, small printing presses, two-wheeler and four-wheeler workshops, electronics repair shops and other such tiny and small industries. Autorickshaw drivers; taxi drivers; lorry drivers and cleaners; mobile `ironing' units; non-medical staff in hospitals; lottery-ticket sellers; rag pickers; porters in bus stands and lorry sheds are others who people this sector.

An important feature of the outward migration of rural families, which can be gleaned from a study of census data, has not received sufficient attention. It is: When a rural family decides on outward migration, it bypasses the nearest town, but heads towards the nearest city. The reason is that the towns are not capable of generating such jobs in sufficient numbers.

Census data of Tamil Nadu shows that the decennial rate of growth of population of mid-level towns is even less than the State's average. An important message this conveys is: There is a critical minimum population that is required for job opportunities in the informal sector to become self-generating.

Empirical evidence from the census of Tamil Nadu suggests this figure as around 4.5 lakhs.

Apart from Chennai metropolis, the other cities in Tamil Nadu whose rates of population growth in the last three decades were higher than the State average are: Madurai, Tiruchi, Coimbatore, Salem and Tirunelveli. Each of them had an initial population of over 4.5 lakhs in 1975.

Such large scale migration, while it provides economic sustenance to the migrating poor families, is not an unmixed blessing because it exerts an enormous pressure on the already inadequate infrastructure of the cities such as their water sources, drainage system, road space, living space, beds in government hospitals etc.

Housing problem

There are not enough housing units in the cities to accommodate these migrating families. So, though the total income of all members of the family may be a few thousand rupees, many of them live on platforms or in sub-standard houses. Thus, while the city economy manages to provide food and clothing to the migrating families, it cannot provide them decent housing.

Two phenomena are thus self-evident: (i) Villages cannot sustain the ever-increasing population with their inelastic economic resources and will continue to disgorge the surplus families into the cities. (ii) But the cities' infrastructure is already too strained to admit of any more migration.

The logical solution to the problem is: Stop these migrating families midway in a milieu which will not only give them economic sustenance in the short term, but will also provide them, in the long term, better living conditions than the cities they are now heading towards, and even wealth.

In other words, build new cities with a projected population of five lakhs each.

Throughout the history of civilisation, human settlements were created near water sources such as a river or a lake. Now is the first time that lakhs of people first migrate to and settle down in an already crowded metropolis and the Government then starts looking for sources of water to fulfil their needs — from even hundreds of miles away (as in the case of Chennai) — at a cost of many hundreds of crores of rupees.

The rational alternative is: Instead of trying to take water to where the people settle down for economic reasons, take the people to where the water is and create suitable economic conditions there.

The new cities should therefore be built near water sources capable of sustaining a population of five lakhs each.

One often hears that India lives in its villages because 60 per cent to 70 per cent of the population lives in rural areas and depends on agriculture.

The history of the past 150 years shows that the economic growth of every western country was concomitant with the reduction in the percentage of the population depending on agriculture. It is irrational to imagine that the Indian economy will be an exception and will improve significantly in the next 20 years even while 60 to 70 per cent of its population continues to depend on agriculture and lives in rural areas. Any plan for the economic development of the nation should therefore provide for an orderly and progressive reduction in this percentage.

Whether the Government plans it or not, such a reduction will inevitably take place, but in a chaotic manner, because of individual decisions taken by hundreds of rural families on outward migration day after day.

What is needed is converting this inevitable process into a `guided migration' away from agriculture and into urban milieus, which have self-generating job opportunities.

Basically, the present Indian towns are overgrown villages, and the present Indian cities are overgrown towns. It is not possible to upgrade any of them to the infrastructural standards of a western or a Japanese city or Singapore. It is however possible to build new cities of international standards on greenfield sites in India.

According to modern town planning standards, a population of five lakhs requires an area of 10,000 acres, equivalent to about 16 square miles (1 sq. mile = 640 acres) or roughly 4 miles x 4 miles.

On an average, it should be possible to locate one such area in each district with a proximate water source (or a combination of sources) capable of meeting the needs of a population of five lakhs.

In Tamil Nadu, for instance, such new cities can be built within the proximity of Chembarambakkam, Madurantakam, Sathanur, Krishnagiri, Vidur, Veeranam, Mettur, Grand Anicut, Manimuthar, Bhavanisagar, and Vaigai and Amaravathi Reservoirs. Their present ayacuts will not be adversely affected since the domestic requirement of water for a five lakh population is a negligible percentage of the committed irrigation needs.

A house-site does not just mean an earmarked land area of 1,500 to 2,500 sq. feet. It must be touched by a road, and must have water, sewerage, drainage, power and telephone connections at its doorsteps, and must be proximate to schools, hospitals and shopping areas and to places where the residents can find job opportunities.

The average cost of acquisition of one acre of dry land (43,560 sq.ft) in a greenfield site can be assumed as Rs.20,000. This is less than 46 paise per sq. ft.

In modern town planning, 50 per cent of the total extent of land will have to be set apart for public use such as roads, parks, bus stands, burial and cremation grounds etc.

The `raw' cost of a house site in the future city therefore works out to an average of just 92 paise per sq. ft.

When this raw land is `processed' and converted into house sites in an urban milieu, its value can easily rise to a minimum of Rs.100 per sq. ft (approximately Rs.2.44 lakhs per `ground' of 2440 sq.ft), or by more than 10,000 per cent.

The value of land in designated commercial and industrial areas and in elite residential areas will be many times higher than this figure.

(A house-site in a developed neighbourhood in Chennai, Madurai or Coimbatore costs between Rs.1500 and Rs.2000 per sq.ft now, while commercial sites cost even more.)

In no other industry does one see such a large ratio of the value of the finished product to that of the basic raw material. Big Indian corporates or even foreign companies will be interested in investing in such an enterprise.

Land acquisition

But private developers will not be able to purchase contiguous large extents of land because many owners may refuse to sell their land within the designated area citing various reasons, thereby creating unplanned enclaves within them. It is only the government which can make compulsory purchase of such large extents invoking the Land Acquisition Act.

The average cost of acquisition of land for a single new city will be Rs.20,000 x 10,000 acres, or Rs.20 crores. For 500 new cities in the whole of India, the investment will be Rs.10,000 crores, to be incurred over a period of two or three financial years (because land acquisition involves a rather slow procedure). This is well within the financial capacity of the Governments.

Having acquired this land, it will be the Government's role to finalise the detailed plan for the city to the last detail providing for roads, parks, sites for public use (such as bus stand, government offices, temples, churches, mosques, courts, schools, colleges, hospitals, NGOs, shopping areas, water and sewage pumping stations, electricity substations, petrol pumps, burial and cremation grounds etc.)

The plan should also earmark industrial and commercial sites as well as house-sites of different sizes for various economic categories of residents.

The plan should also incorporate, to the last detail, the size, design and location of water supply mains, sewage lines, storm water drains and underground power cables reaching the doorstep of each plot.

Land development

The city area must then be divided into viable blocks, and separate tenders invited for each block for developing the stipulated infrastructure in it. The condition in the tender should be that, after such development, the areas earmarked for public use and for allotment to poor families will revert to the government, while the other areas, including other house sites, commercial areas, industrial areas, sites for private hospitals, private educational institutions etc can be sold by the developer in the open market.

Instead of Government paying for the development of the infrastructure, the tenderers for each block should be asked to specify how much money they will pay to the Government for this right. The tenderer offering the highest amount to the Government will get the contract.

This proposal is not as outlandish as would appear at first glance. In fact, such contracts are being entered into day after day by owners in our major cities in what is known as `joint development' arrangement.

In Chennai, for example, a 5,000 sq. ft urban plot (in areas such as Anna Nagar, Adyar, Mylapore, Kilpauk) is currently valued at about Rs. 1 crore. Its present owner might have bought it for just about Rs. 20,000 about 30 years back and built an independent house on it with a plinth area of about 1,500 sq.ft.

The town planning rules allow the construction of 7,500 sq. ft of plinth area on such a plot. Since its owner does not have either the financial means or the technical know-how to develop it in this manner, he enters into an agreement with a professional developer who pulls down the existing structure and constructs 7,500 sq. ft of plinth area divided into eight apartments in a four-storeyed structure.

The owner is given back four of these apartments (with a total plinth area of 3,750 sq. ft) free of cost in exchange for his original house of 1,500 sq. ft, and the developer sells his share of four apartments at around Rs. 2000 per sq. ft, realising a substantial profit for his efforts.

What is proposed here is only an extrapolation of such an arrangement: Government hands over the `raw' land to the developer, he builds the detailed infrastructure as per plan, returns a designated part of the developed area to the Government, and sells the rest in the market making a net profit therefrom.

But mere conversion of a greenfield land into residential, commercial and industrial plots does not convert the place into a vibrant city. Simultaneous steps are needed to populate it with families belonging to various economic strata — lower middle class, middle class, upper middle class and the rich.

This can be done through measures such as:

(i.) Shifting or bifurcating existing government offices and locating them in these new cities. Result: migration of government servants.

(ii.) Bifurcating the jurisdiction of existing courts and locating the new ones in these cities. Result: migration of lawyers.

(iii.) Establishment of schools, arts, science, engineering, medical and management colleges both under government and private managements. Result: migration of teaching and non-teaching staff.

(iv.) Establishment of branches of financial institutions such as banks and insurance companies. Result: migration of financial professionals.

(v.) Encouraging the establishment of industries — large, medium and small scale in various sectors including IT and BPOs — and modern hotels. Result: migration of engineers, computer scientists and other professionals.

(vi.) Establishment of world-class hospitals in the public and private sector: Result: migration of medical and paramedical personnel.

Even while these developments are taking place, traders of various types will automatically migrate to the city.

Labour intensive

The process of creation of basic infrastructure that converts a greenfield site into a modern city is labour-intensive, and will generate many lakhs of man-days of employment both for skilled and unskilled labour during the initial period of three to four years. Simultaneous and subsequent construction of buildings — by government, private sector and individuals — will continue to provide even more lakhs of man-days of employment for the subsequent five to 10 years.

Simultaneously and progressively, thousands of jobs will get generated in the informal sector.

The projected population of five lakhs (about one lakh families) in a new city will require the equivalent of one lakh house-sites of an average area of 2,000 sq. ft per family.

Of these, 20,000 sites must be earmarked for the poor migrant families employed in the development of the infrastructure, and allotted to them on deferred payment terms. Remember that the initial cost to the Government of a 2,000-sq.ft site was just about Rs.1,800.

While the steel, cement, brick, electrical and sanitaryware industries will be the direct beneficiaries of the construction of the new cities, all other industries will also get a fillip when the purchasing power of lakhs of today's BPL families improves dramatically, thereby increasing employment opportunities all across the board.

The costs of not acting

Some of the consequences of not implementing such a programme will be:

(i.) The unbridled migration from villages to the existing cities will continue unabated, straining the already meagre infrastructural facilities of the existing cities.

(ii.) The existing cities will have to look for newer sources of water in progressively farther distances at greater and greater costs.

(iii.) The gap between the requirement and the availability of homesteads for the ever-increasing population will continue to widen.

(iv.) The attainment of higher levels of human development indices by the country will continue to remain a pipedream.

(v.) The gap between the urban rich and the rural poor will continue to widen.

This article gives only a conceptual outline of a most ambitious plan to physically rebuild India through guided migration of a population of 25 crores in a timeframe of five to 15 years. Though it may look formidable at first sight, it is much easier to implement than the much-touted proposal of linking of major Indian rivers.

What is required on the part of today's governments is the type of vision and determination of a Jawaharlal Nehru that enabled the successful completion, in the nascent years after freedom, of mammoth projects such as Bhakra Nangal, Nagarjuna Sagar, Parambikulam-Aliyar, Damodar Valley and the city of Chandigarh, even though the Government's financial resources in those days were a minuscule percentage of what is available today.

(The author is a retired IAS officer of the Tamil Nadu cadre. His email address is ksramakrishnan@yahoo.com)

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