India and her cities

In the previous week, Livemint published an excellent article, titled “Why India has the fastest-growing cities“. Today’s post is a rumination on that article, and associated thoughts.

Urbanization, I unequivocally hold, is an good thing. This belief has come about as a consequence of learning development economics over many years. It has also come about because I have had the opportunity to read many great books about the topic, of which I think Ed Glaeser’s ‘The Triumph of the City‘ is by far the best one.

The reason I like that book so much is because it is an unapologetic paean to urbanization. It not just defends urbanization, it actively reveres it. And there is something to be said for that argument. Cities, when designed well, are worth revering! Watch this lovely TED talk by Jeff Speck, for example. The talk is ostensibly about how to make cities more walkable, but it covers a lot more ground than just that.

Here’s the most important reason, I think, that cities ought to be revered. It is because of their most important feature, and their most appropriate definition: they are labor markets, first and foremost.

What are cities?

Cities are simply a lot of people packed into a relatively tight space, most whom happen to be open to new job opportunities. That’s a paraphrased definition, and it is certainly not mine. The best way to truly understand what this means in practice is to read a lovely (but by Indian standards, prohibitively expensive) book by Alain Bertaud, called Order Without Design.

As I said, the book is expensive, but I can recommend three freely available online resources that you might want to read, listen and watch instead.

When I quit my job in the analytics industry in 2009, it was because I wanted to switch over to academia. Switching over to academia meant that I had to come to Pune. Now, Pune is my hometown, and I love it to bits, but the reason I had to come to Pune is because there were many more jobs in academia in this city than any other city in India.

Conversely, if you are looking to set up a college, a student exchange program or a university, Pune is the best place to do so, precisely because of the paragraph that precedes this one.

That’s what Alain Bertaud means when he says this:

“Sometimes when I read the papers of my fellow urban planners, I get the sense that they think cities are Disneyland or Club Med. Cities are labor markets. People go to cities to find a good job. Firms move to cities, which are expensive, because they are more likely to find the staff and specialists that they need. If a city’s attractive, that’s a bonus. But basically, they come to get a job.”

“All the jobs are in the cities” is a phrase that you will hear often enough in India, but reading Alain Bertaud’s book helps you understand that the statement is actually tautological.

But, if you think about it, and to the extent that you agree with what is written above, we’re committing a moral crime by not glorifying urbanization. Strong words? Maybe. But, I would argue, true words as well.

Urbanization in India

But then how come urbanization in India is only 31%? If all the jobs are in the cities, and people in India are crying out for jobs, why aren’t they all moving to India’s cities?

There are three responses to that.

First: we make it difficult, expensive and to begin with, potentially unremunerative for people to migrate to India’s cities. Difficult because of a whole host of laws and regulations that hamper and hinder the development of efficient urban labor markets. Expensive because of poor urban planning which means housing and transport are not cheap for first generation immigrants into India’s cities. And potentially unremunerative because a lot of our welfare schemes require their targeted beneficiaries to be citizens of rural, rather than urban India.

Second, they are too moving away from villages! Hop into an Uber in your city, and take the time out to speak to your driver. More likely than not, your driver is likely to have the following characteristics. He will be a he, he will have a parcel of land back home in his native village, and he’ll have come to the city in search of a job. That he is a he is an indictment of our culture and our labor market. That he has a parcel of land back home is an indictment of our lack of reforms when it comes to land. And the fact that he is working as an Uber driver (services) rather than in a factory (manufacturing) is an indictment of our lack of reforms when it comes to labor and land market laws. But, to loop back to the start of this paragraph, people are certainly leaving India’s villages.

Third, in spite of it being difficult, expensive and potentially unremunerative, they are migrating, but to areas just outside our country’s cities. And therein lies a trifecta of tragedies: of policy design, of incorrect measurement and therefore of a poor urban experience.

The Livemint article…

 

… has been written by three people: Kadambari Shah, Vaidehi Tandel and Harshita Agarwal. All three of them work at the excellent IDFC Institute, located in Mumbai. One reason I use the word excellent that is relevant to today’s blog post is the fact they produced a very interesting report, a somewhat abridged version of which is this article, that came out in Livemint a while ago.

In that article, they gave us India’s original definition of urbanization, as it was defined in the year 1961.

“India’s three-tiered census definition of ‘urban’—at least 5,000 inhabitants, density of 400 people per sq. km or more, and at least 75% of male working population engaged in non-farm activities—was first framed in 1961 by then census commissioner Asok Mitra.”

By this three-tier definition of urbanization, we’re at 31%. That is, roughly one-third of our population is urbanized, and the remaining is not.

But does that mean that the remaining is rural (and somehow agrarian)?

No!

Because of what we discussed above, in the section “Urbanization in India”, folks migrate out of villages, but not to India’s cities. They migrate to areas just outside of India’s cities: the so-called satellite towns.

So what’s the big deal?

Well, if you stay out of the local municipal corporation’s limit, it is not obligated to provide you the following services: “town planning, slum improvement, public amenities including street lighting, parking lots, bus stops, solid waste management, building regulations and fire services.”

Sure, of course not, you might think. It won’t be, for example, the Pune Municipal Corporation’s job, but that of the satellite town’s corporation. Ah, but because it is a town (a census town, to use the government’s definition), it will not be covered under the definition of an Urban Local Body (ULB). It will, instead, be a Regional Local Body (RLB).

And the RLB doesn’t need to provide (you might say cannot provide, given financial and other capacity constraints) the services mentioned above.

So What?

So:

  • Urbanization is good, even great
  • We don’t have enough of it in India
    • Because we make it difficult for people to move
    • When they do move, we make it difficult for them to find jobs
    • They still move, but we don’t measure the movement well enough
  • We don’t measure it accurately enough because our approach to the measurement is wrong, and woefully out of date
  • As a consequence, when (and if at all) folks attempt to urbanize, they don’t get the kind of urban amenities that they so desperately need.
  • All of this is assuming, of course, that urban amenities are provided, and ably so, by municipal corporations – but a blog post should only be so long, hey?

On the first Monday of March, we’ll come back to the topic of urbanization and India once again.

 

 

 

 

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