Urban Poverty India Report 2009

By: Dr Saraswati Raju
Despite being projected as engines of growth, towns and cities in India have a high incidence of poverty. However, the poverty rates vary significantly across states as also across urban centres.

A large part of urban growth in the less developed countries has historically been linked with stagnation and volatility of agriculture and an absence of nonfarm diversification in the agrarian economy. India is no exception to this phenomenon. This, in turn, has led to out migration of the poor from backward rural areas and their absorption within the urban informal economy. The primary concern in urbanisation-related policies has therefore been finding a solution for these out migrating regions. Although restricting poor migrants to cities may have economic and political repercussions, there is no denial that rural-urban exodus has created serious stress at urban destinations in terms of rising slum population and access to basic amenities etc.

Existing evidences show that the rate of migration has slowed down over the years. Moreover, the better off and relatively more skilled seem to migrate with the unskilled peasantry left behind, warranting migration to be studied in the context of both, sending and receiving regions.

Migration as a process must also be seen as one of opening up of opportunities in cities and towns even as such opportunities are increasingly being appropriated by socially and economically privileged sections of population. It may be argued that urban vibrancy be used as an instrument to help reduce poverty and urbanisation and rural-urban migration must be an integral part of any development strategy in order to meet one of the most important millennium development goals (MDG) i.e., poverty reduction.

Despite their being projected as engines of growth and instruments of globalisation, towns and cities in India have high incidence of poverty. However, the poverty rates vary significantly across states as also across the size class of urban centres. Contrary to popular belief, the metropolises and Class I cities which customarily receive a larger share of the migrants report significant decline in the level of poverty, much more than in small towns.

Migration and urbanisation in India must be placed within the context of emergence of global cities with national and international market linkages. Influenced by macroeconomic factors at the national and global levels, they are no longer strongly linked with the developments in the rural economy or with the rural poverty or deprivation as is the case in other developing countries. Instead, the growth of industries and businesses in a few large global cities attract the inflow of capital from outside the region or country, as also investment by local entrepreneurs. The changing nature of pull factors have brought in a large number of skilled and semi-skilled personnel from small towns and rural areas into these cities. Consequently, the demographic and economic growth in the smaller cities and towns has gone down drastically in recent years.

It would be wrong and dangerous to let the process of urbanisation and migration be planned around a few mega-cities despite their lower levels of poverty, better resource mobilisation, global funds and other institutional resources. Smaller towns lack these and yet they need attention if poverty issues are to be addressed effectively.

It is in this background that the Ministry of Housing and Urban Poverty Alleviation, Government of India, and UNDP sponsored a research study aimed at bringing out a report on urban poverty. The research has since been published by Oxford University Press as ‘India: Urban Poverty Report 2009’. It brings together inputs from eminent researchers, academics and civil society representatives.

Some of the important points that the report make are as follows:

Urban growth, economic development, and the incidence of poverty across states and size categories are interlinked. The conventional wisdom that in-migration into urban areas occurs due to the push factors operating in the rural economy requires rethinking as it is the changing perspective of the urban elite, administration, judiciary, and civil society organisations towards immigrants and slum populations that seem to be leading to exclusionary practices.

Interconnected is the issue of the extent to which migration is poverty induced or can be attributed to the globalising processes. Migrants faring better than non migrants in terms of their consumption expenditures or employment characteristics suggest that mobility linked opportunities are grabbed by better off sections of the population. The failure of the small and medium towns to attract migrants, despite policy statements and programmatic interventions by the government to strengthen their economic and infrastructure base has been identified as a major problem intercepting the process of balanced urbanisation.

  • Urban poverty has to be seen in the context of the growing importance of the unorganised workforce in the country. Given the profile of urban workers who are mostly in the informal sector as casual and self employed, the importance of education and skill in poverty reduction has to be adequately understood for poverty alleviation programmes. Drawing upon city case studies, the Report highlights the heterogeneity of the self employed and the insecurity faced by a large section among them to showcase the marginalisation of the urban poor in the new policy regime.
  • In addition to proper training, skill formation and development of entrepreneurship traits, particularly for the underprivileged and marginalised sections of the urban population, reducing the mismatch between available skills and demands of the market, liabilities can be converted into assets. The Report argues for development of skills among the prospective entrepreneurs for increasing the profitability and sustainability of their businesses. This is not merely viable but also replicable, and an effective tool for poverty alleviation.
  • The credit flows from formal financial institutions to urban centres have increased steadily since the 1970s, but they are concentrated in big cities and large sized credit brackets while the ‘low income-asset holding’ segments have been bypassed despite overall expansion in financial intermediation. Since urban poverty manifests multiple negative experiences, it would be appropriate to design micro-finance systems around multiple objectives and integrate them with the existing service delivery structures in the public sector and with community based system.
  • Poverty concerns have to see the gender dimensions of urban centres closely as opportunities available to them are framed within the societal codes, which restrict their access to productive resources. For example, the incidence of poverty is observed to be high in case of female-headed households. Given this and other employment related issues, the Report proposes for the restructuring and modifications in future poverty alleviation programmes that are gender sensitive and pro-gender.
  • The issue of denial of housing and basic amenities to the urban poor within the larger framework of social security needs attention. Increased privatisation of housing and basic services will reduce their availability to the poor, endangering the long term social sustainability of cities.
  • Cities are increasingly becoming hostile to poor migrant as informal as well as formal institutional structure makes urban spaces scarce, manifested through an ongoing trend towards slum evictions in different cities. Based on a critical examination of the pro-poor programmes and schemes including the recent initiatives of Jawaharlal
    Nehru National Urban Renewal Mission (JNNURM), the Report makes a case for tenure regularisation, backed by the strengthening of infrastructure and the provision of socio-economic inputs through a participatory approach.
  • The urban poor including the marginalised castes and women have dismal access to education and health services, particularly so in large cities. The state sponsored programmes have remained ineffective because of strong powerful transnational business interests that are re-directing policy priorities. The big bang approach by which functions, powers, and responsibilities were transferred from the state governments to the elected local bodies in one sweep, as was done in Kerala has proved to be more successful, compared to the experience of other states where devolution has been incremental and sporadic.
  • Two landmark urban initiatives – the 74th Constitutional Amendment Act and the JNNURM seem to rest on the assumption that an institutional framework designed to empower local governments helps inclusive growth and can serve the interests of the poor. Although these two mark a departure from the earlier programmes of poverty alleviation, there is scepticism regarding their success in bringing in the functional and financial reforms at the grassroots level that are the key motivations for launching the initiatives.
  • Large cities have the problem of elite capture and marginalisation of the poor. Decentralised governance has not really been successful which has led to middle class activism through resident welfare associations. As they become partners in the development process, cities are being ‘sanitised’ with the policing of public spaces. The very mechanism of the functioning of these civil societies is likely to legitimise disparity and strengthen the process of segmentation and exclusionary urban growth.
  • Urban homeless – the most vulnerable group does not get captured in the official statistics and remain outside major interventions. Law and bureaucracy make those at the margins of survival strategies such as cycle rickshaw pullers and street vendors even more prone to poverty through archaic regulations. Initiatives such as the National Policy for Street Vendors or the model legislation for street vendors are largely ineffective due to the absence of political will to back the implementation machinery.

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