Tag: the seen and the unseen

India, Urbanization and Poverty

“Mumbai is the wealthiest city in India. It contributes over 6% of India’s economy, 30% of its income tax, 40% of its trade, and 60% of its customs duties. Its per capita GDP in 2015 stood at $5,328, more than 3.3 times that of the country as a whole. And yet, half of the population lives packed into just 12% of the city’s available land.”

That is from a data rich (and yet pleasant to read) essay about Mumbai and it’s mad policies regarding real estate. Those mad policies are nothing new, some of them are more than a hundred years old, and they have been covered extensively in lots of different places. Not getting urbanization right is a sport that all countries play well – although you’ll certainly get a sympathetic nod from me if you argue that we in India play it better than most. Why, I come from Pune, and you need to come visit our city one of these days to understand just how good (bad is what I mean, but you knew that already) we have become in the last four to five years alone.

Please go ahead and read the whole essay, it is full of delightful little nuggets and not-so-little laments. Did you know, for example, that urban planners planned to limit Mumbai’s population to a maximum of 3.4 million by 1980? This is like I planning to limit my weight gain to two hundred grams around the last week of the year, and I have the same success as Mumbai’s urban planners back in the day – we’re at about 25 million for the Mumbai metropolitan area now.*

And here’s another face-palm worthy statistic:

“The 1999 act is a marginal improvement over the original, but still doesn’t provide adequate incentive for investment. The annual 4% rental increase is below Indian inflation since 1999, below current Indian treasury yields, and far below the increase in demand or the increase in per capita GDP. At the allowable annual increase, the value of rent diminishes sharply over time. If the average Indian landlord received 30% of their income in rent in 1999, and received 4% annual nominal rent increases, they would be making only 8% of their income from rent on those units by 2021. Even more starkly, the act does not address the lag in rents from 1940 to 1999. A unit rented out under the 1947 rent act would have its rent pegged to 1940 prices until 1999, at which point a one-time 5% increase would be allowed, and a 4% annual increase thereafter”

But I wanted to focus on one particular thing in today’s post, and it is this excerpt:

However, the greatest beneficiaries of housing liberalization may be those who are least visible — those newly able to move into the city. One estimate found that migrants who move to cities in the Global South report increases in income as high as 30%. A separate RCT conducted in Kenya, meanwhile, estimated that households with family members who moved to Nairobi experienced an over 150% increase in income.

That is, the idiocy of our urbanization policies keeps people in poverty, and has done so since independence. How? By making it more difficult to migrate into India’s cities, that’s how. An unseen consequence of failed urbanization are the unseen poor, and that is an unseen tragedy.

Urbanization is, and remains, an underrated idea in India, and this has deep implications for our ability to overcome our challenges when it comes to eradicating poverty.

*Questions about my weight gain in the last week of the year will be deemed an invasion of my privacy, and will therefore be ignored. Go away.

India: Links for 8th July, 2019

  1. “The stark fact is that, by and large, there are few incentives for people to save water. There are few incentives for urban water utilities — who might lose 40 per cent of the water along the way— to become more efficient. There are few incentives for public investment in water supply. Needless to say, other than at the premium segment and in the unregulated tanker racket, no private investor will get anywhere close to the water supply business. That incentive is called price.”
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    Nitin Pai on one of the most important factors behind solving the water crisis: incentives.
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  2. “I would not be surprised if estate tax is reintroduced. The richest 10% of Indians own 77.4% of the country’s wealth. The bottom 60%, which is the majority of the population, owns 4.7%. The richest 1% own 51.5%. There is a huge gap between the rich and the poor, and estate tax can bring equality in distribution of income and wealth. This could be a significant step in that direction. Aside from the economic agenda, the reintroduction can be also politically guided.”
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    This post is being compiled on Friday, the 5th of July, 2019. The budget will say what it has to, and the estate tax may or may not come about. But this paragraph in particular, has much to unpack within it, as a student of economics. Best get a cup of coffee, sit with friends, and debate this piece threadbare.
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  3. ““I have no Homeland,” BR Ambedkar said to Mahatma Gandhi at their first meeting in 1931, “No self-respecting Untouchable worth the name will be proud of this land. The injustice and sufferings inflicted upon us are so enormous that if knowingly or unknowingly we fall prey to disloyalty to this country, the responsibility for that act would be solely hers.”Images of Ambedkar and Gandhi feature in Anubhav Sinha’s powerful film Article 15 – as in a scene where portraits of the two icons flank the desk of IPS officer Ayan (Ayushmann Khurrana), who is investigating caste murders in a small town.”
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    I have not yet seen this movie yet (although I certainly hope to. But that being said, I enjoyed reading this review, as do I enjoy reading practically anything written by Jai Arjun Singh. Scroll through to the bottom of the post for links to other reviews he’s done about movies related to caste in India.
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  4. “The irony, of course, is that not only that historian from a hundred years ago, but many even today, remain reluctant to embrace this aspect of our heritage and tradition. The colonizing of Indian minds in the colonial era by Victorian sensibilities was severe, added to which is generations of patriarchy—it will take time and patience before change comes to how history is imagined. Clubbing a courtesan with a mahatma may not immediately be understood or approved of by some. But that is precisely where the courtesan belongs, for, in the larger scheme of things and the big picture of our civilization, her role is no less significant than that galaxy of saints and monks we have all been taught to venerate.”
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    One, read this piece. Two, listen to this podcast. Three, buy this book. Each action will yield handsome returns.
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  5. “In 1962, India’s per capita GDP (in 2010 constant dollars) was almost twice that of China. India’s renewable internal freshwater resources per capita (henceforth per capita water), measured in cubic metres, was 75% of what it was for China in 1962. By 2014, the latest period for which water statistics are available, India’s per capita water had become 54% of what it was for China, even as China’s 2014 per capita GDP became 3.7 times that of India.”
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    We started with water in India, and let’s finish with water in India. An editorial from the Hindustan Times about water and how it has been (mis)managed in our country.