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Urban development, costs of Metro and Indian budget - a perspective

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Metro Rail

In my arguments with regards BRTS, I often bring up the key but neglected and forgotten matter of cost-effectiveness of a given solution to our transportation problems. It should come as no surprise to most who are acquainted with my stance that I hate the idea of spending money without a clear crsip rationale and long term plan.  And the Metro falls under this category as far as I am concerned.

MMRDA officials have in the past replied in agreement to my suggestion that Mumbai Metro will not solve its problems at all. Given the fact that 10000 daily migrants to Mumbai will swell it to a city 30 million plus by 2030, it will be fair to say that whether Mumbai gets sea links or Metro rail, people will still be travelling in quasi or near stampede like situations and roads will always remain clogged.

The above applies to every Indian city as none  has plans on capping growth, if anything the PPP models are ensuring that cities bulge and rip apart at their seams in due course.

The problem is worsened by rhetoric of the DMRC managing director who openly (for the sake of driving business to DMRC) is suggesting that every city with a population of 3 million should have a Metro system.

To get a perspective what this amounts to, I did a quick comilation of available costs (not including Kolkatta as their Metro happened a good while ago).

  1. The Chennai 50 km of Metro rail project is estimated to cost Rs. 11,124 crore, excluding cost escalation and taxes.

  2. The 71-km Hyderabad metro is estimated to cost Rs 12,132 crore.

  3. Mumbai - 146 km at 19,500 Crore Crore (but read here  for some calculations that predict the real cost to be as high as 55,000 crores).

  4. Bangalore Metro Rail Project covering a length of 33 kms in 2 corridors at. an estimated completion cost of Rs. 6395 crores

  5. Delhi's 65-km metro cost the state and central governments Rs 10,500 crore

  6. 'Hyderabad Metro Rail Projects 71 km at the cost of Rs 8760

  7. Pune ~ 10,000 crores at least

    I am not including maintainance and inflation in this figure (neither am I inncluding the higher possible costs suggested for Mumbai) but the estimated total is (and it does not include all phases for Delhi) = 78411 crores

    Now to give a perspective on the above figures -

    1. 2001 census put 72% of India as rural
    2. India's sanitation programme is worth 1200 crores
    3. 12500 crores were allocated to improve rural health services in the Union budget (and lets not forget that one major illness can rip through a well eraning urban middle class families finances)
    4. Mid day meal programme 8000 crores
    5. 34,400 crores for educational sector
    6. Sarva Shiksha Abhiyan 13,100 crores (not long ago, NASCOM reported a worry over stagnation of IT growth because India is not producing enough qualified people, all this money just about gets people literate, even there we struggle).
    7. Farmers debt relief 60,000 crores (60% of India is occupied in this profession, 20% of GDP comes from here, India has second largest cultivable land, but in 60 years has done very little to refomr the sector, research and improve irrigation technology and despite knowing that it will bulge to becoming a 1.5 billion plus country is rapidly giving up farm land in the name of SEZs). 1.5 lakh farmers have committed suicide in last 10 years. In contrast, not many know that IT contribution is under 2% of India's GDP (but there is a myth that the IT is propelling India and hence these mega cities which are IT hubs deserve the best).

    Now the Managing Director od DMRC says every city of 3 million should have a Metro.

    2001 census puts 35 cities in India as 1 million plus cities, many were beyond 1.5 mark. Most Urban cities have grown 40-50% in a decade (so very soon we have 35 cities who may expect a Metro!!, just because neighbours envy owners pride like phenomenon - but then I we are not talking about buying a Onida are we).

    Now one may start calculating the costs of what the DMRC MD is proposing. Plus he suggests that a metro station should be within 500 meters.

    In the name of development and traffic congestion (that does not really exist in most of these cities including Pune) caused largely by poor road infrastructure (rather than lack of roads) and pathetic driving habits, what we are being offered are solutions that will prioritise less than 100 million Indians (rough estimate of current population of the cities currently looking at implementing Metro) over and above 950 others.  Is it any surprising that 10k migrate to Mumbai everyday?

    Build a Metro and expect slums at our doorsteps. No one can stop them from coming, I say they (the rural poor) have every right to come given that they  have no other choice but to starve to death in rural India.  



Vasanth's picture

Metro proposal has become city planner's fancy nowadays

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Every capital city is only talking of Metro easing the traffic. This can help to reduce the travelling time to the places where Metro connects, but not reduce the traffic overall. The projected growth of population in Capital Cities (with people largely migrating from tier 2 cities and villages) and their vehicles will nullify the traffic reduced by the Metro. Again, Metros connect only few densly populated areas and cannot reach the corners of the city. Usually in the range of 50-100 kms of line within the city. This cost itself is so high and Government is finding difficult to raise funds. But, still people think and propose plans that Metro should go every corner of the city, on all the existing bus routes. As Doc ASJ rightly says it is the poor road infrastructure and very bad driving habits which is resulting in traffic congestion. Also Yesterday's cycle user is using 2 wheeler today, a 2 wheeler user - a car, a car user a bigger car, a bigger car user - a SUV. This is resulting in more and more congestion.This move is proving so costly to the state. Many cities such as Amsterdam and Copenhagen moves mostly on Bicycles. Bicycles doesn't need expensive roads but isolation from other vehicles. Bogota and Curitiba added BRTS to this which has resulted in a highly sustainable transport. This youtube video shows how Copenhagen moves on bicycles:
Naveen's picture

Costs Vs Solutions

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Dear Asj, I read yr analysis with great interest - all that you state are very true. On the one hand, we have cities bursting, in fact exploding with growth as rural folk incessantly migrate to cities in search of employment. On the other, we are left struggling to come up with long-term solutions for daily commuters. To add to these problems, we are further strained by numerous social programs & the many budget allocations for these to uplift the poor & needy, in addition to the very low affordability by the masses. I had known all along that building extensive Metro networks (such as the London underground) to solve commuting problems in our cities cannot be sustained as that would be hugely capital intensive, with probably very low revenues, & at some stage will likely result in financial collapse, since the govt cannot keep pumping funds indefinitely without supporting revenues. Likewise, building elevated roads cannot continue as these are equally expensive. After studying various transport modes, I had concluded that the only sensible option would be about 50-80 km of Metro tracks in the core for the larger cities supported by a much larger BRT feeder network - Indore has already shown us that BRT can be successful, provided planners do their home-work & are committed to the effort. I realize that in each city's core, it would be impossible, if not extremely difficult to run buses alone since they would then need to run almost continuously to take care of commuters, making them inefficient at some stage. Hence, I am of the opinion that a Metro network would become a necessity sooner, than later as many thousands of commuters will need to pass through the core city areas. Whilst DMRC may have failed for Delhi due to it's well spread out terrain & all of it's several outlying CBDs, I think it should work for cities like mumbai where the city is still essentially North-South oriented. I look forward to any further observations from your side.
asj's picture

Wider and longer term perspective is needed

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Dear Navin, It was not very long ago that I though privatisation and capitalism was the way of life. Just over half a dozen years in UK Health service has changed my mindset completely. Its not just about 60km of elevated metro or underground metro, the major challenge is far bigger and entirely hidden right now. It will dawn on us as usual when it is too late. The per capita spend on less than 100 million people living in the half a dozen cities getting reams of money from JNNURM is unjustified when we look at how much is planned to be spent on remaining 950 million Indians. Its not just Metro, Pune intends to spend 20,000 crores as detailed in the Comprehensive Mobility Plan, that is 10k over and above costs of metro rail (ironically only 5km is underground now). These cities are getting investment on every front - better electricity supply, better roads, flyovers, bridges, subways (magic boxes), hospitals, airports, schools, residential enclaves.......the list can go on. Now widen the perspective to see where all the SEZs are located - all are as close to cities as possible. Almost all are on very fertile soil.

Lets look at the SEZs a bit more -

  1. Just over 46% of India is under agricullture.
  2. Commerce ministry says SEZ take up only 0.000012 of arable area - but in real terms this can amount to a lot in terms of crop production.
  3. Through the 90s and this decade, 21 lakhs of it has become NA. While this feels like a small figure, this amount of land can cultivate 57 lakh tonnes of wheat, feeding 4.3 crore hungry people, year after year after year.
  4. Kerala now has 3.5 lakh hectares of agri land compared with 10 in 1980s.
  5. 90k hectares was diverted on outskirts of HYD htrough the90s
  6. Whitefield paper SEZ in AP is in the Godavari basin, not only is agri land lost, huge amounts of water will be diverted for sake of industry (so the impact is far reaching and not restricted to just the SEZ in question). Watre use from reservoirs in Orissa is up 30% - all diverted to industry. Mundra Port SEZ - sucks up 6 million litres per day from Narmada........this list can go on.
  7. Singur - was on cultivable land.
  8. Pen - Reliance SEZ - again on land which is very fertile and even better irrigable now due to Hetavane dam completed only recently
  9. Tata's left Singur, where do they end up - 30km from Ahembdabad taking 1000 acres from Anand Agricultural University
  10. Jeetha SEZ, Punjab - 400 acres of cultivable land
  11. Take most of the other SEZs and the story repeats.
  12. Now this is despite over 150 lkhs of unclutivable land in India.
  13. The Corporate however does not want to go far flung, they want to be close to cities, where instead of building required infrastructure they will gain from existing infrastructure to which they contributed nothing.
  14. The Corporate is getting all this at throw away prices - every where farmers are unhappy as price offered for land is a good 4-5 times less than asking price. Many will end up with half a million or so -  but with no employment, no where to live, how long will this money go?
  15. Add to this the tax sops - 100% tax free for five years, no duties on imports...........The Finance Minstry has raised concerns over this - its estimated that 1,74,000 crores is at stake due to tax concessions - Put this figure in the context of amount spent on health, mid-day meals, education, sanitation, housing..............this is nothing but a psychotic giving away of public money and assets to a small group of companies. Why exactly do corporates like Tatas, Ambanis, MIttals, Infosys, Wipro need any more tax sops? There is no evidence to suggest that FDIs will not flow without such tax sops, FDIs go where there are markets, and India is a 1.5 billion people market, they will come with the money, tax or no tax.
  16. The 500 odd SEZs (although many still await permission) have been rightly described by one expert as 500 odd princely states that India once had. Todays Nizams are the Tata's and Ambani's
  17. Now, huge chunks of the acquired land is not for the actual industry - up to 40% is up for residential and commercial developments. What does this mean in real terms for our cities that are already under pressure - on the outskirts millions will come to live and no transport infrastructure in any city will cope. We are setting ourselves up for massive failures.
  18. Take the Baner-Balewadi land grabd (I have published a separate post on this) - land reserved for schools, hospitals, parks and even fire brigade - they want to de-reserve it all and just develop, build and build (even land reserved for crematorium is on line).
  19. Take the 550 acres of Dharavi slums in Mumbai, it houses 6 lakh families - now try looking up information on the slum re-development scheme - 60k families will be re-housed in to dwellings as small as 225 sq feet. If we say each family has 4 or 5 people, still almost half will have no where to go. Why cram 5 people in 225 sq feet when the norms are 100 sq feet for first person and 50sq ft for every additional person - the developers are keen on massive real estate development. FSI of 4 is already in place, but blog posts and articles from building industry constantly are asking for more (arguing that Singapore and NY have FSI of 30).
  20. Bush is quoted to have said to US citizens - 'its important to for our Nation to be able to to feed our own people'. India has still not managed to curtail population explosion, we still grow at 1.4% annually, we will be going well past 1.5 billion mark. With so many mouths to feed, it may not matter if we never send a man to the moon, but it will matter if we lose our food security. Imagine having to import food and rely on it (we will be at complete loss when it comes to our ability to manipulate on International issues). I have said it before and say it again, we have not evolved as humans to a point where we can survive on pentium chips.
  21. The rural India will be ignored as usual, it is estimated that 400 million will be forced to leave rural India for sake of survival - is it hard to imagine where they will all go? They will be in these very cities where we think 60 km of underground metro will work wonders, it may, for a couple of years, but the capacity will be outstripped by demand in no time.
  22. Our PM despite al his education has been at the helm of a very destructive policy.
  23. The Corporate are nothing but selfish capitalists who care very little for the country. They have no morals, they have outsourced land grabbing to anti-social and corrupt politicians to retain their clean image (Singur being an example where they just walked away holding their head high).

Embedding a picture of Mumbai Locals, nothing will change even after all phases of Mumbai Metro is built as population will have gone past 25 million and eventually go well beyond 30. Other cities will suffer similar fate.


srkulhalli's picture

The best solution to Mass Transport

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To me the best solution is to lay tracks on the surface, by whatever name you call it, commuter rail, suburban or at grade METRO This is very cheap, we already have thousands of km across india, has great capacity, much more than a BRTS system can ever hope to acheive, good sppeds. At periodic intervals (a km or so) we need to have sufficient underpasses or overhead brides so that it does not clog the road traffic. It still works out much cheaper. The only issue with it is it needs to be planned up ahead. Once the urban densification has happened, we have to go to the highly expensive elevated or underground METRO (8 to 12 times) We are lost now on the inner areas of the big cities. But we can plan for peripherial areas of big cities and as a solution for Tier 2 cities right away ! In fact we should make it a mandate for all cities to include this in their Comprehensive Development Plans' For some reason, this just does not figure in any discussion, including the ones on this forum.



asj's picture

Spot on

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Suhas, You are spot on. While I am not aware about Bangalore, Pune has commuter rails and even a local train service between Lonavala and Pune Station, tracks further go towards Solapur. I have challenged the PMC in not considering within their grand scheme of things the use of exsisting infrastructure. I must add here, that within my detailing of how urban spending is irrationally outstripping rural spending I have not mentioned the facts that the Metroo rails systems as also BRT (in Pune) is being planned using PPP. No private enterprise spends money unless they have to gain. The only way they can gain is to make the most of FSI along the metro rails and BRT - a FSI of 3 is on offer in Pune. So the very people planning these systems are ensuring that for their own profits the cities spiral out of control. Further, the spendthrifts are doing this with complete denial of India's fiscal deficits, debts as well as trade deficits - all these parameters will only get worse. ASJ
idontspam's picture

BRTS + Trams

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I have noticed another practice in Europe is to have BRTS like corridors which are use by both trams and buses. The trams run on the street corridors and are used to connect the metro stations where they branch off from the street and use the rail infrastructure as though they were trains. The people just change platforms into a regular metro train. When the trams stop on the street corridor people just have to get off and wait at the same platform for the bus to pick them up. The buses on the other hand use the tram corridors and share the station platforms and then branch off on to regular streets to connect places not reached by trams. So the buses dont always have to be in the corridor but get the benefit of the corridor. The rolling stock used for both trains and trams are similar.
murali772's picture

perhaps 'karma capitalism' holds the answer

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"It was not very long ago that I though privatisation and capitalism was the way of life. Just over half a dozen years in UK Health service has changed my mindset completely. Its not just about 60km of elevated metro or underground metro, the major challenge is far bigger and entirely hidden right now. It will dawn on us as usual when it is too late."

Doc ASJ - I don't get it. Where does privatisation and capitalism come in here? What we are seeing here is the result of skewed government policies. As the government policies change, the capitalists will look for newer opportunities. Now, if the point you are making is that it is all driven by the private sector capitalists, I agree, there may be some truth to it. But, what do you say when the likes of Mr Sreedharan of DMRC also pitches for such mega projects, right across some 30 odd cities in the country? India is today more in the grip of 'babu capitalists' than say the likes of the Ambani's. Check:

Well, ENRON was amongst the biggest financiers of George Bush. But, when it came to the crunch, neither could he save them. Lehman Brothers, Merryl Lynch, etc played dirty, and are now all wound up. Atleast the US capitalist system finds ways to correct itself, even if after paying heavy costs. Also, a total overhaul seems to be now in the offing with Obama poised to take over. Democracy seems to be asserting itself there to keep a check on unbridled capitalism. And, I think they will come far better off from the present crisis. Perhaps, they will go for 'karma capitalism' about which a number of Indian industry leaders have been talking of. Atleast, I would like to think that way.

As compared to that, Russian, Chinese and other so-called Socialist/ Communist regimes don't even seem to have a clue as to what is happening.

The government healthcare system in UK may be in good shape. But, out here, it is just dismal. And, what is becoming increasingly clear is that the organized private sector players in the healthcare sector have today come of age, and are in a position to take care of the needs of even the poorest of poor in the country. On the other hand, the (dis) services provided by the government hospitals are becoming increasingly costly, in terms of negligence, apathy, mamools (no longer small as the term may imply), fresh infections due to unhygienic conditions, and not in the least life itself on account of these and many other factors. It is time the government re-looked at its role.

I have written extensively on that at

Muralidhar Rao

Muralidhar Rao
asj's picture

Hand in glove

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Murlai Sir, The forces of evil are one and same. There in increasing evidence of how greedy capitalists are failing Nations. Across the globe, they use Governments to get themselves free from having to pay tax. There are company boses in EU who pay virtually nothing, their cleaners pay more tax. DMRC and the likes of BSNL, VSNL etc these are all back door entrants to the same game. Health care repeats the story, focus and provide to paying customers, exorbitant charges and they run away from paying full taxes by running in the guise of 'charities'. I know many 5 star hospitals doing this for donkeys years. While a whole Nation awaits better and affordable and ideally free healthcare the corporate hospitals are after a slice of healthcare tourism. I have read your blog, but the mess is huge, the corruption is at such levels that ............. hope to do a review on this. Most politicians are running these big businesses. Who owns the franchise for Sai Service in Pune (and benefits from pot holed roads and pathetic road discipline) - Mr Kalmadi. Who owns todays private teaching Institutes on land acquired for the price of dal-chana? And the same people get voted every 5 years. ASJ
kbsyed61's picture

No ideology is 100 percent ideal !

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"Well, ENRON was amongst the biggest financiers of George Bush. But, when it came to the crunch, neither could he save them. Lehman Brothers, Merryl Lynch, etc played dirty, and are now all wound up. Atleast the US capitalist system finds ways to correct itself, even if after paying heavy costs. Also, a total overhaul seems to be now in the offing with Obama poised to take over. Democracy seems to be asserting itself there to keep a check on unbridled capitalism. And, I think they will come far better off from the present crisis. Perhaps, they will go for 'karma capitalism' about which a number of Indian industry leaders have been talking of. Atleast, I would like to think that way."

My apologies for my strong tone and emotions in this post. But I can not hold on any more.

Murali Sir, whether you accept it or not, the truth is there is no system in the world that is ideal that suits everybody. The treatment is to adopt the best of the ideology that suits the need and time. This is what the 2008 Nobel Economics Prize winner Paul Krugman,suggests,

His lessons for India during the Asian crisis suggested during his visit to the country was adequately capitalising banks, closing down weak ones and leaving the convertibility programme where it is.

“It (closing weak banks) may sound hard-hearted, but you cannot keep unsound financial institutions operating simply because they provide jobs. There can be a huge amount of damage a bad bank can create. There is a cruelty to our market system, but that cruelty cannot be eliminated. The alternative is fraught with danger, that of carrying on with the weak banks,” he said

On the impact of the Asian crisis on India, Krugman had said India had avoided the worst partly in the fact that the restrictions discouraged both inflows and outflows of short-term capital.

“No developing country with large-scale mobility in short-term capital is immune to these crises. India, fortunately, did not make the same mistakes. Had the crisis come, there would have been economic devastation, and the crisis would have fed on itself,” according to Krugman.

About prospects of currency convertibility in India, Krugman’s advice was “leave currency convertibility where it is. It’s an extremely dangerous world out there. The risks of getting caught in the pinball game are too high."

Each system comes with its inherent strengths and weakness. Its all depends on who and how one uses the systems. Sitting in one part of the world it is easy for us to give an opinion that market forces will correct the current economic turmoil. The real test of this is with the general public who has to endured the price of greed and lust of the proponents of free market without any regulation, without any social responisbility. Lehman's and MerryllYUnch might have gone under, but the impact they have left on the nations economy is very hughe that ordinary citizens will pay for? How do you think, will pay for the bailout of 750 billion US$? Lehman and Merryl Lynch's CEO's? Public representatives? No sir. It is the ordinary souls who slog every day for 2 square meals. In order to feel this pains and anguish one needs to ask these ordinary souls? Ask the hundreds of workers who are loosing thier jobs, houses and driving them nuts. Sir, the price they are paying is huge and they don't deserve such punishment. They are not responsible for their fate today.

Recently, due to my oversight, i delayed on paying a bill for $107/- by 2 months. The result was it got recorded on my Credit Report. My Credit limits were just cutdown to couple of thousands from about 50K. Not that I make use of 50K limit. But the price I am paying for a small mistake of $107 is huge. But none gets accounted for billions of $s that gets scammed in the corridors of power and businesses lunches. Due you think that it just happenned overnight and nobody know about it?

Now you and me can crtiticise the Nehruian model of building PSUs, huge govt employee network? We can go on hammering Nehru's socialism in the name of free economy and privatization?

But we ever dare ask a question - How did we didn't have to pay thru our noses for higher education? How it is OK to have housing layouts from govt agencies at the throw away prices? Did we ever ask a question, did we pay the market price for all that we enjoy? Did the thousands of young educated work force just came out of blue? Didn't the socialist policy of affordable universal education helped India produce such huge amount of young work force? We may have found new love in "Privitization" and it is fashionable to critisize our past leaders. At least they gave some thing based on thier conviction and love to this nation. They left something that nation can work on to build further. Can we measure up to them in any manner?

Lets not get bogged down by our myopic vision, rather adopt what suits our need and time without prejudices against any one ideology. Lets not carry forward our lives only on ideologocal basis.


navshot's picture

Private healthcare

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I created a forum topic here, just yesterday on healthcare. I don't think private guys are anywhere close to providing affordable healthcare for the urban poor. There maybe exceptions, but they are just that now and is not widespread.

-- navshot


-- navshot
psaram42's picture

call spade a spade

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This is a reply to your article dated nil (there are no dates) titled “Urban development, costs of Metro and Indian budget - a perspective"

You have started off by saying “In my arguments with regards BRTS, I often bring up the key but neglected and forgotten matter of cost-effectiveness of a given solution to our transportation problems.”

 In the very next paragraph you say” MMRDA officials have in the past replied in agreement to my suggestion that Mumbai Metro will not solve its problems at all. Given the fact that 10000 daily migrants to Mumbai will swell it to a city 30 million plus by 2030…………….”

After all the rambling thoughts your article ends with:

“Build a Metro and expect slums at our doorsteps. No one can stop them from coming; I say they (the rural poor) have every right to come given that they have no other choice but to starve to death in rural India.”

This is a stark reality.

Do you suggest that “The city of Munbai should ban any more influx in to the city?” Your Government rightly wants on the other hand non Maharashtrians like Amitabh and Kannadigas (on earlier days) to vacate Mumbai. You want to have a constant progress of x% and yet have no impact on cities capacity to sustain such a development. You want to have the cake and eat it too. Let us stop being naïve and call spade a spade.

Kindly see my article on Traffic Flow


kbsyed61's picture

Mixing Oppurtunism with anguish,

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Psaram42, You are right, we need to call spade a spade. Poitics is politics. Development is development. Seems you are mixing the oppurtunism of regional politics with the anguish and a truthful confession. No body can stop anybody from migrating to Mumbai or any other city. Neither it is possible nor feasible. How can you and me stop another fellow citizen to pursue a dream of improving his present condition? Nobody can. What ASJ noted in his post is about utter lop sided development policies pursued from governments - Local to Central, NDA to UPA. Where hundreds of thousands of crores are spent on City infrastructure, look at the amount on spent rural development. Do you think people will migrate to cities if there were enough opportunities to him at his village/Kasba? No sir. In order to understand this lopsided development, all you need to do is get some first hand information on Silk business in Karnataka? Go to Ramanagaram, Channapatna and find out the stories of Riches to Rags. Go to places like Anantapur District's Kadiri and its surrounding villages(A.P State). Poverty and helplessness will stare you in your face. What needs to happen is, the focus and intensity of development should migrate from urban areas to rural areas. Our villages need a functional primary health care facilities,High school/College level education facilities to every child,Road and transport infrastructure to support the agriculture marketing, reasonable and affordable credit facilities, and list can go on. India doesn't leave in urban areas. It also lives in rural areas. In fact majority leaves in villages. Also don't be under the impression that only the urbanites contribute to the economy or GDP. Sir, rural economy contribution is as equal to urban if it is not less.
asj's picture

Calling Spade a Spade

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kbsyed61 - Thanks for clarifying my stance lucidly. PSA, you have not understood me, worse still you have plucked out bits and misrepresented my views. BTW, every city has development plan (DP) set for 20 years at a time (no development outside these plans is legal). Further every city has development control regulations (DCR). Now, is it constitutional to stop migration? No. But is it constitutional to let people live in squaler? Yes. Basically every city has limits, withiin the limits are finite land and resources. The DP and DCR are based on principles of town planning as well as other nationally agreed norms - number of schools per 1000, colleges, hospitals, parks, fire brigade, creamatorium, vegetable market, police stations, etc - for everything there are norms. So if a city was 100 sq km (for sake of argument), certain amount of land is to be reserved for all these public utilities. Land thus has to be rationally distributed across these priorities including roads (or other modes of transport). So for sake of argument, lets say 50sq km has to be reserved - we are left with the remaining half which can be used for residential facilities. This has to cater to all (rich and poor, but again there are norms on per capita space). Now add to this equation the land celing Act, which stipulates FSI limits. The DCR will also stipulate off-setting between buildings, between buildings and roads / highways etc. In short, one can calculate if one wanted to the precise number of legitimate households in a city. The situation we find ourselves in is the lop-sided urban focus which has left rural India so improvished that people have no choice but to leave for the cities. When they come, where do they live? They squat on land reserved for much of the above. There are two ways to stop this - send people forcibly back to villages and let them die (but before that happens there may be a huge revolt). Clearly the above is impractical. The next option is to spend heavily in rural India and let people have a decent life in rural settings, this makes move to urban locales less attractive to many (one only has to look at countryside farmers in Europe). The final option is to set up SEZ but not the way its done now. Right now, SEZs are a near extension of cities, they are close by. Reliance in Pen is close to Mumbai, close to a future airport and sea ports. But all this infrastructure was built by tax payers money and is now being handed over with 100% tax rebates for 5 years plus no duties. If we have to give tax sops, I would think these SEZs should be on barren land (there is lots in India) and entire cities may be allowed to be developed from the scratch, from roads to railways - that makes more sense. This is much better than constantly shifting goal posts, raising FSI in cities, increasing the population, then building elevated multi-storey roads, then raising FSI, then getting a metro, then raising FSI again for those who funded the metro, and the cycle continues until we find ourself on trains as crowded as those in Mumbai. ASJ
murali772's picture


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I don't think you have got me right.

I have never stated that Capitalism is the panacea for all evils. All I am saying is that it is far better than the kind of 'Socialism' India has been burdened with by our politicians, particularly Indira Gandhi downwards. Capitalism will in its wake bring in its own problems. But, very much as the late Sri C Subramaniam had stated, atleast we will be battling new problems and not the same old ones for which we could not find solutions in the past sixty years.

And, I am certainly not belittling the damage caused to the common man by the economic melt-down. I have a number of nephews and nieces in the US, who I am sure have been hit hard too. I myself have lost quite a bit, but I am not cribbing since I very well accept the dangers of the market place. But, I had placed fairly safely, and am not too badly off.

Well, as for Nehruvian Socialism, I'll subscribe to what Sashi Tarror has stated in todat's STOI - check A handful of Syedbhai's may have benefited from the government's largesse. But, not the multitudes. If we had perhaps followed C Rajagopalachari's path, perhaps the multitudes would have earned their livelihoods with dignity. Anyway, I'll not hold it against Nehru. Atleast, he was genuine. But, after the kind of damage his daughter did to the country, the word Socialism has lost its original meaning, and it cannot possibly be redeemed now.

I had originally thought of giving a more elaborate reply. But, Sashi Tarror has eased my job. It's easily the best commentary on the current scenario, and the lessons thereof for India.

Muralidhar Rao

Muralidhar Rao
kbsyed61's picture

It is people who are given charge

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Murali Sir, It is not the ideology that fails, but the people who use it for reaching the pulpits of power. Otherwise how do you explain the failing of HMT PSU where as at the same time Maruti Udyog becoming profit making PSU and a Navratan PSU? Sir, it is the people who were given charge of running these institutes who has failed the nation. Not the ideology. And no ONE ideology is the panacea for all the evils. Sir, this is true for all the projects, schemes that are announced and implemented in past 4-5 decades. Imagine if GOK and GOI representative on BIAL project had played their role right? But look at the fight put up by so called concerned citizens. we are after the private partner, instead of bring these public representatives to task and accountability first. That would have made the case against the private partner. We are neither learning from past mistake, nor would like to tread the correct path. We have a long way to see this happening. For that we need to elevate from "what best suites me" to "What suites best to my nation".
Naveen's picture

The (Mis) Use of Freedom

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I read Shashi Taroor's article too in today's TOI - an excellent summary - could'nt agree with him more ! When the Asian Tigers (Singapore /Taiwan /S.Korea) were leap-frogging their way into the ranks alongside developed states, India under Indira Gandhi was busy nationalizing banks /transport & throwing out the likes of Coca-Cola out of the country. This "License-permit raj", which suited the leaders & government well, became even more deeply engraved whilst the masses were forced to be heavily dependent on the state, full of inept, incompetent & inefficient officials. Hatred for anything business-like was fashionable & termed "greedy". India had become blind & never saw the western models, being copied successfully by the newer eastern nations, & today, we are behind & may never be able to catch up as problems have multiplied many-fold. Even now, the path that is being followed is fraught with danger as the appropriate corrective steps are not being taken, despite 17 years of liberalization. FDIs permitted into the country should be with a singular focus on improving infrastructure, such as airports, harbors, power, water, telecom, roads, waste mgmnt, transport, etc. but we find the likes of toyota, hyundai, samsung, chanel & georgio armani marching in. As I had mentioned previously, privatization has still remained under-developed & competitive mechanisms are pathetic. One wonders how & when this "Indian Rope Trick" will mature & be in a position to race alongside the community of other nations - the task seems out of our hands & it might need something like a miracle to steady the course, if ever we can do that.
asj's picture

Lets learn from all of 60 years

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Tharur will be first to agree that we need to learn from not just the mistakes of our first 40 years but all of 60, including the 20 years of economic liberation. Indeed he joins many others in rightly challenging the way the rehab of 550 acres of Dharavi slums is planned, click here

 The 60 years that have gone by do not equate as failure of the model that proposes social welfare state to stand alongside capitalism. Its best described as a failed Nation thanks to corruption, selfishness and greed. The EU has enough number of countries that pove that socialism and social welfare states alongside capitalism can co-exist happily.

Todays SEZs are nothing different from the licnse raj and subsidy of years gone by. Todays Nizams are being given thousadns of acres and return the state gets almost nothing, in fact its 5 years of tax loss amounting as pointed above to money (177,000 crores) is 20 times more than today's infrastructure costs across all cities - the Nation could be transformed. Instead, the SEZ owners by virtue of their proximity to cities are not having to throw a dime towards roads, rail, shipping or air transport (all this is in place). And then, we will lose agricultural land - something so vital for food security of 1.5 billion (eventually) people. But how does one place value on agricultural lnd that can feed 4.5k crore people year after year after year (perpetually if its looked after), not to mention that it has fed 1000s for centuries already. And any one who argues that SEZs will bring lots of jobs is yet to study the impact of automation - to give an example - Bajaj produced 2.5 million vehicles with 10500 workers in 2005 as against 1 million in 1990s with 24000 workers. Agriculture in India today occupies 60% of the country, many very poor farm workers but its a sector that feeds every mouth in this country. Bajaj produced 2.4 million vehicles in 2005 with 10,500 workers. In 1990s they used to make 1 million vehicles using 24,000 workers.

At a time when the Govt should be raking in revenues via taxation and also starting a mandatory National Insurance scheme for providing health care for all free along with housing and subsistence, we are only ensuring that billions of Rupees are pocketed by select few.


murali772's picture

let's dream

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I am reproducing below the concluding para of Tharoor's essay:

In the last 15 years, India has pulled more people out of poverty than in the previous 45 - averaging some 10 million people a year in the last decade. The country has visibly prospered, and despite population growth, per capita income has grown faster and higher in each of these years than ever before. The current financial crisis, far from prompting us to retreat, is an opportunity to safeguard those gains and to build on them. For more than four decades India suffered from the economics of nationalism, which equated political independence with economic self-sufficiency and so relegated us to chronic poverty and mediocrity. Let us not condemn Indians again to repeating the mistakes of that unlamented past.

So, the economic liberalisation of the last 15 years has done a lot of good actually. Admittedly, there have been many distortions, and they need to be corrected, and that's where government's efforts needs to be concentrated. They should be framing policies whereby TATAs and TVS would be encouraged to operate efficient and affordable bus services, instead producing cars and mobikes; Mukesh Ambani gets into harnessing solar power and making it available to common man at affordable rates, rather than indulge in the vulgarity of his 'Antilla'; Anil Ambani builds a world-class football team from out of the boys playing at Cooperage in his backyard, instead of trying to buy out Aston Villa (or whatever), Nandan Nilekani makes India the knowledge capital of the world instead of having to worry about how to get the cars of his staff to reach office on time; Dr Devi Shetty leads a consortium to take over all the government hospitals to offer affordable healthcare to aam aadmi rather than saving just a child here or there; Hiranandani builds affordable housing for the Dharavi lot rather than just the fancy flats for the super rich in Powai; ITC transforms the agrarian economy rather than just operate a few e-chaupals here and there.

I would like to believe that many of the Indian industry leaders would welcome such policy initiatives from the government, and the present economic melt-down I am sure will make the others also review their approaches. Now, it's for the government to get its act together, and fast.

To quote Gurudev Tagore - to that heaven of freedom (and prosperity), my father, let my country awake.

Muralidhar Rao

Muralidhar Rao
asj's picture

Whats stopping them

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UN changed the norms for poverty line recently in keeping with cost of living, effectively nulling any gains and pushiing those below poverty in India to 48% - so much for poverty eradication. You are right, when you wonder why they indulge in the vulgarity of 'Antilla'; Anil Ambani builds a world-class football team from out of the boys playing at Cooperage in his backyard, instead of trying to buy out Aston Villa (or whatever), Nandan Nilekani makes India the knowledge capital of the world instead of having to worry about how to get the cars of his staff to reach office on time; Dr Devi Shetty leads a consortium to take over all the government hospitals to offer affordable healthcare to aam aadmi rather than saving just a child here or there; Hiranandani builds affordable housing for the Dharavi lot rather than just the fancy flats for the super rich in Powai; ITC transforms the agrarian economy rather than just operate a few e-chaupals here and there. But I disagree when you place the onus solely on the Govt because as far as I know there is nothing stopping the FDI and SEZs going to BIMARU states. In fact Bihar gets about 1% of the FDI - why? Who is stopping Tata's from going to barren lands of Rajasthan and building the Nano plant there? To add to your Tagore quote, I quote Gandhi who said 'when everyone does what they can do, this would be a different country'. So let the Ratanbhai, Anilbhai, et al start cuffing up the taxes rather that shop for tax free resorts. ASJ
kbsyed61's picture

Is poverty in India coming down?

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The thing about statistics is how you want to look at it. It is more like half filled and half empty conversation. There may be truth in that last 2 decades, quality of life in India has improved considerably. But real question is, has the poor improved his condition or remained poor or became more poor. Here is an article from NDTV,

Copurtsey - NDTV

Is poverty in India coming down?

I agree with doc ASJ on, for real prosperity, we all need to do what we are supposed to do. Otherwise no ideology would be able to help us. It's time we stop running after ideologies. It's time we stop bashing ideologies and the past proponents just because somebody misused it. Let's look at the realities and find solution to problems that works and works fine for INDIA. comment guidelines

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