The changing policy landscape for urbanisation:

What could it mean for inclusion? iihs

www.iihs.co.in

Aromar Revi & Jessica Seddon

Workshop on Inclusive Cities,

New Delhi, 7-8 July 2011

Vision of a ‘World-class’ future

‘Shadow’ of a colonial past

Aspirations of the Indian State

Pushta

JNNURMNSDPUBSPMNP

Yamuna Pushta: c. 2003

Yamuna Pushta demolitions: Feb-May 2004

20112004

Yamuna Pushta Forced Evictions: Feb – May 2004

Delhi: Demolished Settlements & Resettlement Colonies (1990-2008)

Dupont, 2011

Systematic process of evictions and regularisation defines the land „market‟

Pushta

Demolished Settlements & Resettled families (1990-2008)

Dupont, 2011

A 30+ year process of state-led eviction, demolition and exclusion

Urban exclusion is not only a facet of India‟

historical socio-economic asymmetries.

It could be an unintended outcome of

State „policy‟ and legality

The journey towards inclusive cities (and

villages) starts with responsiveness to the

letter and spirit of the Indian Constitution.

Greater Mumbai:

Key Features

& Slums

Mumbai: the slum ‘capital’ of the world >7 million people

Open Defecation: 0.5 million people per day in Mumbai

A ongoing failure to meet Constitutional obligations / basic human needs

Urbanisation & Income/Consumption Inequality in 4 countries

(1973-2005)

As India urbanises and grows, which trajectory could it take?

2005

2005

2000

2007

Nail House: Chongqing , 2007

A „harmonious society‟ with Chinese characteristics

• Export-led industrialisation

supported by regional urban

impetus

• Massive infrastructure investments

and scale agglomeration

• Financing through land value

realisation and state backed loans

• Hypercompetitive decentralisation

• Enforced hukou residence permits

• Expropriation of peri-urban land

and inner city properties &

privatisation of SoEs: large

numbers of migrant workers

• High income growth and

‘subsidised’ urban living

Trifurcation (?) of the Indian & Chinese Economies by mid-century

China: Population Cohorts by Education Level (2030)

-100 -50 0 50 100Population (millions)

No Education Primary Secondary Tertiary

100 50 50 100

MALE FEMALE

Source: IFs 5.34, 2007; TARU analysis,

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

84-89

90-94

95-99

>100

India: Population Cohorts by Education Level (2030)

-100 -50 0 50 100Population (millions)

No Education Primary Secondary Tertiary

100 50 50 100

MALE FEMALE

Source: IFs 5.34, 2007; TARU analysis,

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

84-89

90-94

95-99

>100

Over 800 million urban dwellers people

with a secondary education engaged in

wage-based manufacturing & the informal

sector

Over 1.2 billion ‘aging’ people living

in rural areas with a primary

education or less

Over 300 million global engaged

knowledge workers living in gated urban

communities and suburban enclaves

Brazil: the favela and helicopter

• Fome Zero

• Bolsa Famalia

• Right to the City

• City Statute

• Minha Casa Minha Vida

• Participatory budgeting

Is Brazil‟ reduction in poverty and inequality sustainable?

South Africa (1960-2010): Apartheid planning & beyond…

Sharpeville

Sharpeville redux: Johannesburg 2009

South Africa: Poverty headcounts by Race (1970-2000)

2011: Black male unemployment in Johannesburg > 55%

Tipping point: when will urban India‟s Singur moment happen?

• “A village, normally speaking,

is backward intellectually and

culturally and no progress can

be made from a backward

environment.”

• Cities are the sites of

colonial exploitation

• India needs

industrialisation, a modern

outlook and scientific

temper

Urban transformation: a return to old debates…

• “What is a village but a sink of

localism, a den of ignorance,

narrow mindedness and

communalism?”

Urban Inclusion

via

Security

Access

Capability

Opportunity

Good Governance

Democratic Deepening

The Dynamics of Indian Urbanisation

(1951-2031)

India‟s Urban Future (2011-2031)

• India will add at least 300 million new people to its cities in 30

years

• This is on top of the current urban population of ~350 million,

of whom over 70 million are poor

• In 2031, three of the ten largest megacities in the world will be

in India: Delhi, Mumbai, Kolkata

• Over 70 other cities will have a population of over 1 million

• This will be the second largest urbanisation in human history

creating huge market opportunities and development challenges

• The way forward is the simultaneous transformation of India‟s

cities, small towns and its villages

1951

> 5

1 - 5

0.5 - 1

0.1 – 0.5

< 0.1

Population Size (millions)

Source: Census of India, 1971- 2001

UN, 2007

IIHS analysis, 2009-10

India

W. Pakistan

E.

Pakistan

Nepal

Tibet

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Urb

an S

ett

lem

en

ts

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Po

pu

lati

on

(in

mill

ion

s)

Kolkata

(6.9)

1971

Mumbai

(5.8)

Large Urban Settlement Growth

Urban Population Growth

> 5

1 - 5

0.5 - 1

0.1 – 0.5

< 0.1

Population Size

(millions)

Source: Census of India, 1971- 2001

UN, 2007

IIHS analysis, 2009-10

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Urb

an S

ett

lem

en

ts

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Po

pu

lati

on

(in

mill

ion

s)

Kolkata

(10.9)

Delhi

(8.2)

Chennai

(5.3)

1991

Mumbai

(12.3)

Large Urban Settlement Growth

Urban Population Growth

> 5

1 - 5

0.5 - 1

0.1 – 0.5

< 0.1

Population Size

(millions)

Source: Census of India, 1971- 2001

UN, 2007

IIHS analysis, 2009-10

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Urb

an S

ett

lem

en

ts

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Po

pu

lati

on

(in

mill

ion

s)

Kolkata

(15.5)

Delhi

(16.9)

Chennai

(7.5)

Bangalore

(7.2)

Hyderabad

(6.7)

Ahmadabad

(5.7)

Pune

(5.0)

2011

Mumbai

(20)

Large Urban Settlement Growth

Urban Population Growth

> 5

1 - 5

0.5 - 1

0.1 – 0.5

< 0.1

Population Size

(millions)

Source: Census of India, 1971- 2001

UN, 2007

IIHS analysis, 2009-10

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Urb

an S

ett

lem

en

ts

0

100

200

300

400

500

600

700

800

1951 1961 1971 1981 1991 2001 2011 2021 2031

Po

pu

lati

on

(in

mill

ion

s)

Mumbai

(28.6)

Kolkata

(22.3)

Delhi

(24.4)

Chennai

(11.1)

Bangalore

(10.6)

Hyderabad

(9.9)

Ahmadabad

(8.5)

Pune

(7.4)

Surat

(6.3)

Kanpur

(5.1)

2031

Large Urban Settlement Growth

Urban Population Growth

> 5

1 - 5

0.5 - 1

0.1 – 0.5

< 0.1

Population Size

(millions)

Source: Census of India, 1971-2001

UN, 2007

IIHS analysis, 2009-10

India‟s Urban Opportunity

(2011-2031)

India: the opportunity of ten simultaneous Transitions

1. Demographic transition: population stabilisation & aging

2. Health transition: infectious + lifestyle disease burden

3. Education transition: elementary secondary tertiary

4. Energy transition: oil + coal gas + renewables

5. Environmental transition: „brown‟ + „grey‟ + „green‟ agendas

6. Information transition: post phone cell phone + www

7. Livelihoods transition: agrarian green + knowledge jobs

8. Economic transition: primary + secondary tertiary-led

9. Political transition: decentralised, youth and urban

10. Urban transition: rural „urban‟

Indian settlement structure (2011):

~ 7,800 urban areas

~5,50,000 villages

India‟s decentralised Settlement structure (2001)

~ 7,800 urban areas and ~ 0.55 million rural settlements in 2011 – opportunity

for decentralised production and consumption systems and economic structure

-

50

100

150

200

250

300

1991 2001 2011 2021 2031

Rs.

Tri

llio

n /

lakh

cro

res

Time (years)

Potential Growth of India's Urban Economy @ 8% CAGR

(1991-2031)

GDP (current prices) Urban GDP

Rs 735 lakh crores

Rs. 1450 lakh crores

What is at Stake in Urban India?

India: the largest integrated national market of the 2030s

Who manages Urban India?‘Top Management’

• MPs & MLAs 5,300

• Higher Judiciary 650

• IAS & IPS 8,200

• CXOs (top 500 corporates) ~ 5,000

• NGO leadership ~ 1,750

Total 20,900

% educated & trained in urban practice < 5%

„Middle Management‟

• Senior Municipal officials ~ 4,000

• Senior Engineers ~ 8,000

• Active Urban Planners ~ 2,000

Total ~ 14,000

% educated & trained in urban practice < 20%

Massive capacity deficit esp. at middle level

Urban Exclusion:

Addressing Poverty, Inequality & Social Exclusion

Structural change in the Indian economy (1960-2004)

Ghosh, 2010

Structural change in the Indian economy (1960-2004)

Urbanisation is a core driver of structural change in the Indian economy along with an increasing role in poverty reduction

Log Per capita Net State Domestic Product & Urbanisation

for select states (1981-2001)

Regional imbalances are opportunities for future development;

even though some developed states appear to be pulling away

2001

2001

2001

Urban: Rural differential in per capita income (1980-2006)

Ravi, 2010

Urban-rural per capita income differential grown steadily.

Yet migration is constrained

Interstate Inequality (1980-2008)

Steady increase in interstate inequality, esp. as the growth

multipliers of urbanisation, differential investment and global

connectivity flow to more developed states

% of Population below Poverty Line (1973-2004)

Ghosh, 2010

Continuing decline in poverty headcount, but debate on whether a deceleration has taken place post ‘95

Number of People below the Poverty Line (1973-2004)

Absolute number of the poor declining, but urban poor will continue to increase. Urban poverty depth > rural.

How is urban poverty different from rural?• Commoditisation (Moser et. al. 1996)

– Food security: cash for necessities

– Tenure security: urban tenure insecurity worse than rural

– Transport costs: esp. linked to oil prices and exclusionary spatial structure

– Price of illegality and informality

• Differential Environmental Health Burden (Montgomery et. al. 2003;

Satterthwaithe, 2007)

– Sanitation and water supply; Indoor air pollution

– Poor quality housing and Overcrowding

– Differential access to health services/lack of urban primary care

• Social fragmentation– Reduced community resilience

– Exacerbated by evictions, informality & illegality

Changes in Urban per capita expenditure (1983-2004)

Sarkar & Mehta, 2010

Reducing urban poverty has come along with increasing inequality. Limits to its socio and political sustainability?

Urban per capita expenditure CAGR (1983-2004)

Sarkar & Mehta, 2010

Urban winners and losers: extremely poor have seen decline in income growth; upper quartile benefitted

disproportionately

Urban-Rural Wealth gap by Caste (2002) (% of rural wealth)

Zacharias & Vakulabharanam, 2011

Massive concentration of wealth in urban areas with the rich

Urban & Rural Wealth deviation by Caste (2002) (in ‘000 2006 Rs.)

Zacharias & Vakulabharanam, 2011

Urban wealth stratification & disadvantage persists:

Forward Castes>>Non-Hindus>STs>OBCs>SCs

Urban Poverty by Size Class of Settlement (1983-2004)

World Bank, 2011

Urban poverty headcount is concentrated in

small > medium > large towns

Urban Poverty by Size Class of Settlement (1983-2004)

Huge growth enhancing and rural & urban poverty reduction opportunity in small & medium towns

1. Absolute poverty has reduced (except for possible 2009 drought and downturn impacts)

2. Absolute number of rural poor have decreased, but absolute number of urban poor has increased

3. Urban poverty has deepened and is more widely distributed across states and within states

4. Regional divergence and urban rural differentials have increased

5. Urban consumption inequality has increased(potential underreport)

6. Urban wealth inequality has increased

7. Social exclusion and stratification by occupation is still strong

8. Urban caste and social wealth stratification is still strong

9. Human poverty asymmetries appear intransigent

Urban inequality trends: 1990s and 2000s

Enabling Urban Inclusion

Environmental Sustainability

Social Transformation

Unified & Robust Polity

Inclusive Economic Growth

Reduced Poverty and Inequality

Catalysing five national outcomes by the 2030s

Addressing Urban Exclusion

• Political participation

• Identity and access to justice

• Addressing the missing middle : S&M towns

• Labour market

– Manufacturing sector

– Construction sector

– Other services

• Land and Housing markets

– Mobilisation & Access

– Regulation

• Mobility

• Education access

• Health care access

• Infrastructure and public service delivery

• Social safety net

• India lives in its villages for a while but adds economic value in its cities

• India votes based on its villages but not for long in some states

• Rural prosperity and reduction in inequality is linked to urban access

• Development planning/delivery systems are ‘rural’ in conception

• Massive asymmetry in urban and rural development infrastructure

Addressing the anti-urban Political bias

1. Steady 8 to 9 percent growth expected, based on investment rates of 35%, largely driven by urban output and savings

2. Key policy constraints: macro-economic stability, inflation, subsidy rationalisation and addressing global environmental space

3. Agricultural growth turnaround effected, but may not cross 3%. Non-farm diversification will imply strong urban linkages

4. Manufacturing growth at 10-12% essential to meet targets, generate employment to absorb new workers and surplus from primary sector Linked to urban development, regional infrastructure & services

5. Global constraints could depress services growth to 11%, bulk of this will come from urban areas. Informal service sector linkages and multipliers essential to inclusion

Current macro-Policy Environment - I

6. Infrastructure and service delivery serious constraint. Shortfall to be made up by private and PPP route, implementation and service efficiencies critical esp. for energy, water, transport and telecom

7. Vulnerable groups and regions need to be addressed for political, internal security and socio-economic reasons

8. Land conversion and markets are a critical constraint to infrastructure, urban and manufacturing development apart from its welfare impacts on the poor

9. Education, skill development and innovation are priority areas for human development. Returns to scale in urban areas strong driver.

10. Public investment priority to rural development, health and education.

Current macro-Policy Environment - II

281

206

143

7663 58

44 35 28 23

0

50

100

150

200

250

300Allocation (Rs. ‘000 Crore)

Realisation (Rs. 1000 Crore in 2006-07 Prices)

Sectoral Resource Allocation XI Plan (‘000 crores)

Rural Development > 10 x Urban Development allocations

Planning Commission, 2011

A. Importance of urban transition recognised. Underexplored

B. Urban development will receive residual public investment requiring recourse to user charges, property taxes, private and PPP financing

C. Strong investment and infrastructure focus

D. Subsidiary service delivery, reform and capacity building focus

Central Urban Sector policy orientation

1. Recognition of urban contribution to aggregate growth and rural poverty reduction

2. Urban centres as catalysts of manufacturing sector growth

3. Linkage between land & labour market development and urban growth, development and poverty reduction

4. Halting mal-development as constraint to inclusive development

5. Decentralisation and ULB political and regulatory reform

6. Sustainable livelihood development

7. Aggressive urban poverty reduction orientation and targeting of poor non-migrant residents

Central Urban Sector policy Opportunities - I

8. Role of small and medium towns in growth, urban and rural poverty reduction

9. Migration as a poverty reduction and growth enhancing strategy

10. Regional imbalance correction via urban and infrastructure development and market creation

11. Urban environmental services and pollution: going beyond water and air pollution

12. Education, skill and urban capacity building linkages

13. Pre-emptive social safety net development

Central Urban Sector policy opportunities - I

The unintended consequences of

modernist „slum free‟ planning

Chandigarh: informality meets modernity (1952-2011)

“Let it be the first expression of our creative genius flowing on our newly earned freedom. Let it be a new town symbolic of the freedom of India unfettered by the of the past and expression of the nation's faith in the future…”

(Jl. Nehru, 2nd April 1952)

Chandigarh ‘Masters’ Plan

1972

1989

2000

2011

Conclusions• Cities and urbanisation far from being the challenges they are seen to

be are tremendous opportunities to redirect the future of India and its people

• To seize this opportunity, a wider, more strategic cross-sectoral view is useful beyond the necessary but relatively narrow investment, infrastructure, basic services and poverty-focus we have got used to

• The policy environment is open to this possibility but a compelling case of the opportunity, and a viable set of strategies, programmes, institutions and instruments to effect is only just being made

• Inclusion is the fulcrum around which political and popular acceptability and implementability will pivot. This rather than growth or investment alone could make this possible and enable the gains to be felt in the lives if ordinary people