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«“Manufacturing cities: Industrial policy and urban planning in India”1 Neha Sami* Shriya Anand ©Neha Sami & Shriya Anand (*) Neha Sami & Shriya ...»

-- [ Page 1 ] --

“Manufacturing

cities:

Industrial

policy

and

urban

planning

in

India”1

Neha

Sami*

Shriya

Anand

©Neha

Sami

&

Shriya

Anand

(*)

Neha

Sami

&

Shriya

Anand,

The

Indian

Institute

for

Human

Settlements

(IIHS),

Bangalore,

India

Paper

presented

at

the

RC21

International

Conference

on

“The

Ideal

City:

between

myth

and

reality.

Representations,

policies,

contradictions

and

challenges for tomorrow's urban life” Urbino (Italy) 29 August 2015.

http://www.rc21.org/en/conferences/urbino2015/

–  –  –

Abstract Policy makers in India are increasingly focused on the critical importance of managing India’s urban transition to ensure the sustainability of the growth and inclusion agenda in the coming decades. India’s economic transition to a middleincome country has been fuelled largely by growth in the services sector, which has failed to provide opportunities for a large unskilled workforce. To address this concern, successive governments have attempted to promote industrialization, with limited success. One of the strategies the Indian government has adopted has been the creation of particular types of industrial settlements and zones to simultaneously meet the goals of industry-led growth and to decongest existing cities.

This model of growth draws on the successes of other East Asian countries such as China and South Korea where particular zones were developed to facilitate exportoriented industrialization. However, the corresponding policy push to develop Special Economic Zones (SEZs) in India, which relied heavily on investment by private developers, met with limited success. This has been replaced by a more recent proposal to develop industrial corridors and regions, in which the state plays a more prominent role. The newly elected government in 2014 has put a renewed emphasis on industrial policy through its highly publicized Make in India campaign that aims to revitalize manufacturing in India.

The corridor policy of the government continues to draw upon the successes of particular East Asian models to promote manufacturing-led growth in India.

However, the particular type of development that such policy aims to promote does not reflect the economic and urban reality of India. India’s urbanization during the past decade has been driven by the emergence of a large number of smaller, more dispersed settlements and not by metropolitan expansion (Denis et al., 2012a). The economy is dominated by the services sector, while most of the employment in the manufacturing sector is concentrated in small, informal enterprises. Through this focus on developing greenfield industrial cities, the state is simultaneously ignoring

–  –  –

the tremendous infrastructure requirements of its existing small and medium towns as well as pushing a model of capital intensive growth which will fail to meet its employment objectives in the medium and long term.

Drawing on work on urban planning and policy, and on economic planning and development, as well as on primary work carried out along the Delhi-Mumbai Industrial Corridor, this paper raises concerns about the feasibility of such policy in the Indian context. In particular, it assesses the aspirations of the state regarding an industrial-led urban transition and the ways in which these are disconnected from India’s urban and economic reality.

The paper begins by introducing the urban and industrial policy environment and the institutional context within which these decisions are being made. This is followed by an examination of the aspirations and assumptions of Indian state actors regarding planning and building these industrial settlements, concluding with questions about the feasibility of such an approach.

Draft: Do not cite without permission

1. Introduction Policy makers in India are increasingly focused on the critical importance of managing India’s urban transition to ensure the sustainability of the growth and inclusion agenda in the coming decades. For the first time since independence, urbanization is becoming an economic and developmental priority as national and state governments in India are actively building policies focusing on urban regions.2 Growth in the Indian urban population (United Nations Population Fund,

2007) has coincided with rapid rates of economic development and the gradual opening up of the economy to foreign investment.

Until the late 1990s, urban India did not feature very prominently in national or regional government policy. The planned approach that the Government of India adopted after independence ignored urban requirements, for the most part.

Following on the heels of the economic reforms of the 1990s that increased private sector investment in Indian cities, several fundamental legislative changes were implemented particularly targeting urban regions (Weinstein et al., 2013). These included the 74th Constitutional Amendment Act (1992) mandating the devolution of power to local governments and municipal authorities and the repeal of the Urban Land Ceiling Regulation Act (ULCRA) that regulated the amount of land individuals were allowed to hold and develop in urban areas. Continuing this trend of urban reform, in December 2005, the Indian national government also launched the country’s most ambitious urban reform program: the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), committing to investing over USD 20 billion in India’s cities over a period of seven years (Weinstein et al., 2013).





The urban development programs implemented by the national government include: the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) the Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT), the Model Municipal Law (MML), the e-Governance Mission, Report Cards on Urban Services, Citizens’ Charter on Municipal Services, the Mayor-in-Council form of government, Municipal Accounting Reforms, Property Tax Reforms, issuance of tax-free Municipal Bonds, and schemes such as Pooled Finance Development (PFDS) and City Challenge Fund (CCF), promotion of private sector participation and community participation. (Aijaz, 2008)

Draft: Do not cite without permission

Over the last couple of decades the Indian national government has also begun to develop specific types of industrial and economic development policies that have led to the emergence of different urban forms. These include the development of Special Economic Zones (SEZs), National Investment and Manufacturing Zones (NIMZs), and new towns in and around existing urban regions that focus on specific types of industrial and economic activities. The most recent, and perhaps one of the most ambitious strategies is the push to develop industrial corridors between major Indian cities, which the Indian national government has embraced as a key development strategy. For example, work on the Delhi-Mumbai Industrial Corridor (DMIC) is already underway while a second corridor between Mumbai, Bangalore, and Chennai is being planned. This follows earlier government policies like the development of the Golden Quadrilateral and the North-South and EastWest corridors that emphasised building transportation infrastructure (chiefly highways) that connected the four major Indian metros (Delhi, Mumbai, Kolkata, and Chennai). The development of these industrial corridors has multiple stated goals, which include improving infrastructure, enabling exports, generating employment, and linking fast-growing regions to relatively poorer regions.

The corridor policy of the government draws upon the successes of particular East Asian models to promote manufacturing-led growth in India. However, the particular type of development that such policy aims to promote does not reflect the economic and urban reality of India. India’s urbanization during the past decade has been driven by the emergence of a large number of smaller, more dispersed settlements and not by metropolitan expansion (Denis et al., 2012a). The economy is dominated by the services sector, while most of the employment in the manufacturing sector is concentrated in small, informal enterprises. Through this focus on developing greenfield industrial cities, the state is simultaneously ignoring the tremendous infrastructure requirements of its existing small and medium towns as well as pushing a model of capital intensive growth which will fail to meet its employment objectives in the medium and long term.

Draft: Do not cite without permission

Drawing on work on urban planning and policy, and on economic planning and development, as well as on primary work carried out along the Delhi-Mumbai Industrial Corridor, this paper raises concerns about the feasibility of such policy in the Indian context. In particular, it assesses the aspirations of the state regarding an industrial-led urban transition and the ways in which these are disconnected from India’s urban and economic reality. Focusing especially on the relationship between central and state governments in facilitating industrialization, we find that while state governments play an important role in industrialization, especially in the implementation of policy, the national government takes on the visioning and planning of certain types of industrial infrastructure as in the development of SEZs and industrial corridors. However, there are severe constraints on the availability of supporting regional infrastructure such as transportation and power and little co-ordination between various line ministries that have important functional overlaps in planning these settlements.

1.1. Economic Planning in India: A brief history At independence, the Indian national government adopted a planned approach to development. The Five-Year plans were framed around economic sectors, and outlined specific measures that the government could undertake to promote particular areas of the Indian economy: for example, agriculture and heavy industry formed a significant proportion of the earlier plans (Corbridge and Harriss, 2000). The first three of these National Five-Year plans concentrated almost exclusively on economic and financial planning while largely ignoring the relationship between economic development and spatial planning (Jakobson and Prakash, 1967). Subsequent plans did focus more on urban development, but within a sectoral framework. A review of the Five-Year plans shows that a large proportion of new urban settlements in India emerged as a result of the decision to promote industrialisation in backward regions of the country, and that urban planning and policy for these settlements followed much after industrialisation.

Moreover, since the Five-Year plans had a sectoral outlook, the little that was

–  –  –

granted to urban development fell through the cracks between different sectors (Chandrashekhar, 2010; Sivaramakrishnan, 1978).

As a result of growing concerns around urbanisation and related issues, the Planning Commission established the National Commission on Urbanisation (NCU) in the late 1980s to study various aspects of Indian urbanisation. The NCU published its final three-volume report in the late 1980s. The report focuses on several key areas, which remain concerns till today, such as the spatial structure of urbanisation, urban poverty, land and housing, and the planning, finance, and management of urban settlements (Mehta and Mehta, 1989).

1.2. The changing nature of India’s urbanisation Since the economic reforms of the 1990s, there has been a renewed focus on urban India. The majority of these economic reforms benefited urban areas in India (Shaw, 2007). As Indian economic policy encouraged privatisation, urban regions emerged as key sites for economic growth (Dupont, 2011; Sankhe et al., 2010).

Following on the heels of the economic reforms, several fundamental legislative changes were implemented, particularly targeting urban regions: the 74th Constitutional Amendment Act (1992) mandating the devolution of power to local governments and municipal authorities, and the repeal of the ULCRA that regulated the amount of land individuals were allowed to hold and develop in urban areas. In recent times, the urban has started to command a place of priority in policy and economic development.

The nature of Indian urbanisation itself is changing. During the last decade however, as Figure 1.1 explains, nearly 30 per cent of urban growth was, in fact, due to ‘in-situ’ (Pradhan, 2013) or ‘subaltern’ urbanisation (Denis et al., 2012b), i.e. the reclassification of existing settlements into ‘census towns’ according to Census of India criteria, and not because of rural to urban migration, or growth in the larger

Draft: Do not cite without permission

Indian cities.3 The share of migration in driving urban growth has stayed fairly stable, at around 22 per cent. However, the share of natural increase in urban growth dropped from 59 per cent between 1991 and 2001 to only 44 percent between 2001 and 2011.

Figure 1: Components of urban growth.

–  –  –

Source: (Anand et al., 2014b); Figures for 1971–81 to 1991–01 are from High Powered Expert Committee (HPEC) (2011), figures for 2001–11 are from Pradhan (2013) However, a large number of the settlements that have now been reclassified are urban in character, but lack the governance structures that urban areas require.4 Moreover, the census towns are only one kind of urban settlement that has emerged in India over the last decade. The Government of India has also begun to promote specific types of industrial and economic development policies over the last couple of decades that have led to the emergence of different kinds of settlements; the idea is that these will simultaneously meet the goals of industryled growth and create alternative urban settlements, which will help decongest The Census of India criteria for being classified as a town are that the settlement has population greater than 5,000; density greater than 400 persons per square kilometre; and at least 75 per cent of the male main workforce is engaged in non-agricultural pursuits.



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