Imagine There No Heaven

imagine there no heaven
DEVELOPMENT THEORIES
Darshini Mahadevia
(Course: Theories and Evolution of Planning)
Semester II
Faculty of Planning and Public Policy
CEPT University, Ahmedabad
WHY STUDY DEVELOPMENT THEORIES AS A

STUDENT OF
O PLANNING
A G?
| Planning is for Change and in the modern world we talk

of planned change, through planners.
| Deliberately engineered social change oriented to
specific goals.
| But,
But in development theory,
theory there is also now a new
major strand (stream of argument) that challenges the
assumption of superiority of planned change in contrast
to change through open political debate (negotiations of
the stake holders)
1
CHANGE VS. STABILITY
| IIn history,
hi t over short
h t period
i d off ti
time, one fifinds
d
rapid and continuous change
| On the other hand,
hand over long period of timetime, one
finds long periods of stability
| What is p primary?y Changeg of stability?y
| That depends upon one’s world view, whether it
is optimistic or pessimistic, optimistic view looks
att change
h andd pessimistic
i i ti view
i llooks
k att ‘G
‘Goodd Old
Days’
CHANGE VS. EFFECTIVE CHANGE
| Change is something that is permanent (a

statement that is a paradox)
| Term
T effective
ff ti change
h iis value-laden
l l d
2
AND SO THERE IS ETHICS OF CHANGE

| Most important ethical term associated with
discussion of change is ‘Progress’
| Term
T ‘Progress’
‘P ’ has
h many versions.
i
| There are three versions of term ‘Progress’ (Now
even four from the perspective of the South)
These are: (i) Eighteenth Century version
(ii) Nineteenth Century version
(iii) Post-Second World War
version
Major development theories are informed about

the Western ethics of ‘Progress’ as the Change
g
indeed begun from the industrial societies of the
West. Now, when the developing world is
industrialising, question of ethics has become
i
important
t th here as well
ll and
dhhence thi
this course.
3
| Broadly,
B dl there
th are ttwo main
i positions
iti ffrom
which ‘Progress’ is analysed
(i) Liberal
Liberal-democratic
democratic – Change as evolution,
evolution in
which man viewed as ‘consumer’, that is
humankind is seen acting in selfish wants
(desires) A fairly pessimistic position.
(desires). position
(ii) Radical-democratic – Sees humans as doers
(actors) and humankind acting in light of social
goals,
l arguing
i that
h positive
i i change
h is
i possible.
ibl A
fairly optimistic position.
| Change, Social Change is viewed with two

perspectives (metaphors)
(i)Continuity,
(i)C ti it th thatt iis evolutionary
l ti change
h – Social
S i l
evolution, that is the survival of the fittest, which
Darwin had stated in ‘Biological evolution’
(ii) Rupture, that is radical change
4
EVOLUTIONARY SOCIAL CHANGE PERSPECTIVE
| Very convenient argument for those arguing for a ‘laissez faire’ in

economics, that is those pursuing indiscriminate pursuit of
wealth.
| Summarized in five points
p
(i)The object of enquiry is the whole
(ii) Idea of cumulative change – that there is no sharp
discontinuity
(iii) Idea of endogenous change – that the change arises from
within the system and not through external impetus
(i ) Idea
(iv) Id off increasing
i i complexity
l it – there
th iis shift
hift from
f simple
i l
forms to complex forms
(v) Idea of unitary direction of change.
| Liberal-democratic theories fall here.
RUPTURE AS A PERSPECTIVE OF SOCIAL CHANGE
| Veryy different from evolutionary y

| Predominantly Marxist – Society is inherently build of
groups that have conflicting interests and hence are in
social
i l conflict.
fli t These
Th conflicts
fli t provide
id motor
t for
f
change.
| For example,
example Marxists argue that capitalist
entrepreneurs destroyed the local historically
outmoded social forms and created new forms of social
organisation
i ti iin a society.
i t
| Radical-democratic theories of change fall here.
10
5
Liberal-democratic theories
(i) Liberal-market theories
(ii) Social-market theories
11
| Liberal-market theories – These are earlier group of theories.

Within these there are three streams:
(a) An eaearly
y UK/UN
U U line ewwhich
c iss heavily
eav y influenced
ue ced by
economics
(b) A line mixed in more sociology with economics, which is
more US product
(c) Neo-classical (resembling early economic theories) which
emphatically asserted the priority of market in human affairs
and sub-ordination of ‘state’
state to market
market.
(State is considered external intervention in market processes)
y Development or progress is equated with economic growth

y Amenable to technical characterisation
y A relationship of super and sub
sub-ordination
ordination legitimated
y Development theories coming from those who are developed,
through experts of the developed countries
12
6
| Social-market
S i l k t theories
th i – Reject
R j t th
the above
b
model and sociologized economics. Progress is not
jjust
s eqequated
ae w with economic
eco o c growth
g ow but w with
planned, ordered, social reform.
| Progress is ordered social reform
| Produced by other than economists and is
pragmatic, humane and plausible
13
| Radical-democrat
R di l d t th
theories
i – Democratic
D ti ethic
thi
and historical materialism strategy of analysis.
Marxist. Historical materialism is: society under
constant
t t change,
h moving
i from
f one level
l l off
material well-being to another, the move carried
out through conflict of classes.
| Human is considered a doer or an actor in this
social change process. Process of change built
around ‘objective
objective conditions
conditions’ of change and
‘subjective forces’ of change.
14
7
| The liberal-market and social-market theories

g
together are called orthodox theories
| They tend to take the whole business of development
as technical or/and obvious.
| Liberal-market see development as a matter of
building appropriate physical, social and economic
structures, largely as a matter of acquiring
characteristics familiar with the experience of
developed nations.
nations
| Social market see development as a business of
organising decent lives for people living in the Third
World, mainly disadvantaged groups among them.
15
| But, the notion of development is not purely

technical and is certainly not obvious (that is
development will take place).
place) It is an ethico
ethico-
political notion. Hence, the process of bringing
change,
c a ge, ‘planned
p a ed change’
c a ge oor ‘planned
p a ed pprogress’
og ess is
s
not technical.
16
8
METHODS OF CHANGE
(i) either through political action by a range of agents

(ii) or through planning intervention for ordered change
17
ACTIONS FOR ORDERED CHANGE
i) State action to secure change – Intervention by the

State. It is the approach of agencies committed to
planning in pursuit of development goal. Pursued by
international agencies linked to UN, by governments
of new nations. Was an influential approach during
early phase of decolonisation
decolonisation. Approach centres around
agencies of planned change.
18
9
ii) Spontaneous through market – Argues for

spontaneous order and development generated
through free market. The markets are self-regulatory
(not regulated by the state) and there is mimimal rule
rule-
setting by the state. Development (economic growth)
through maximization of economic, social, political and
cultural
lt l benefits.
b fit
Institutions promoting this approach are the

international financial institutions such as the IMF,
World Bank, Asian Development Bank, etc.
This approach has failed to promise realisation of

maximum
i benefits
b fi to the
h poor off the
h Thi
Third
d World.
W ld But,
B
has a strong intellectual backing, as development
institutions continue to be dominated by the 19
economists.
iii) Political power for development – Central role

is allocated to public sphere within which rational
dialogue can lead to change
change. The institutional vehicles
for change are the NGOs, charities, and social
ove e ts. In Europe,
movements. u ope, suppo
supportt has
as co
comee from
o media,
ed a,
political activism and academia. Critics point out that
this approach cannot resolve the situation when
conflicts arise.
A radical version of this is Marxist version of class

struggle. But, that does not remain a planned change.
The process to attain state po
power
er becomes a political
struggle which is radical, and subsequent ordered
actions are by the state agencies. 20
10
RISE OF SOCIAL SCIENCE
1 Planning is an extension of Social Sciences

- Town Planning has antecedent (ancestry) in Physical
planning and greatly influenced by
architects/engineers
- Modern, democratic society, we use term urban and
regional planning and not town planning and is seen
as an extension of Social Sciences for the success of the
discipline
- Today, urban and regional planners work in different
capacity than just town planners and hence, this
overview of history of social science discipline is
essential
essential. 21
2 Rise of social sciences is rooted very much in the

European experience, particularly of three
streams through 17th to 19th centuries:
i) English enlightenment – Hobbes and Locke
ii) French enlightenment – Rousseau and Saint-
Simon
iii) Scottish enlightenment – Adam Smith
These efforts resulted in rise of modernist paradigm
(theory) of development and urban and regional
planning
l i emerges as epitome
it off modernist
d i t paradigm.
di
22
11
ENLIGHTENMENT MOVEMENTS IN EUROPE

i) René Descartes – Early 17th century. A French
mercenary (some one working only for money).
| Descartes gets a dream. The dream says, (a) doubt
everything that presents itself to mind
mind, (b) dissect the
problem into many parts as possible, (c) reconstruct
the whole process through step-by-step inductive
process (reasoning developed from observed examples
or from empirical observations and (d) enumerate and
record everything.
| Descartes sets theh stage ffor abstractions,
b i analysis,
l i
synthesis and control.
| Descartes
Descartes’ss vision was unitary (formed of singular
units added up together), universal and absolutist
(complete and final without any alternative).
23
| He said,
H id there
th iis only
l one answer tto any problem
bl and
d
there is only one truth.
| This is veryy much modernist p paradigm,
g , which stated
that there is only one way development can take place
and there is only one definition of development.
| This is the beginning of scientific reasoning and
rationalism. Prior to that, knowledge was controlled by
theology. Science had not developed.
| By
B mid-20th
id 20th century,
t this
thi Cartesian
C t i vision
i i was att the
th
unconscious level as the fundamental assumption of a
global culture of modern institutions and bureaucratic
d i i making.
decision ki Human
H societies
i ti are abstracted
b t t d as
expanses of space awaiting planning, inputs, and
infrastructure, to be arranged and rearranged according
to circumstances
i andd calculations.
l l i
| Cartesian vision was a very much mathematical and
geometric vision of human society. 24
12
ii) Sir Francis Bacon – Early 17th century.

C t
Contemporary off D
Descartes
t
| Emphasises use of human reason in inquisition of
things, that is use of deductive logic, unlike inductive
methods
th d (empiricist
( i i i t method)
th d) off Descartes.
D t
| Development of logic as a discipline is attributed to
Bacon.
| Bacon argues that h the h method
h d off understanding
d di
anything is to analyse it by breaking it into pieces, and
by due process of exclusion and rejection lead to
inevitable conclusion.
conclusion The purpose is not to win
argument with academician (like Indian philosophers
have been portrayed doing it), but for commanding
nature in action.
action
| He suggests that only with the division of labour and
specialisation “men will begin to know their strength,
when instead of great numbers doing all the same
things, one shall take charge of one thing and another
of another.
25
| He emphasises instrumental role of reason and

knowledge (Once again,
knowledge. again in theology controlled system
of knowledge – one where India is now moving to –
reason has no place and the knowledge is given).
| For Bacon acquisition of knowledge is for purchasing
everything, including power. Bacon’s vision of modern
knowledge was one of power, of domination of nature
and domination over others ((those lacking g knowledge).
g )
(This indeed was stated by many colonialists, for
example, Sir Cecil Rhodes who conquered and created
a country called Rhodesia – now called Zaire – said
th t th
that throughh hi
his k
knowledge,
l d h
he wanted
t d tto civilize
i ili the
th
barbarians.)
| Bacon argued that what makes some humans (men)
g d over others
god th is
i the
th invention,
i ti the
th ttechnology.
h l g
Hence, Bacon is called prophet of technocracy.
| In Bacon’s vision, the knowledge and technology are
only in the hands of the few
few. His knowledge is equated
with utility (control over nature and people) and
power.
26
13
ENGLISH ENLIGHTENMENT - ISAAC

NEWTON (1643-1727)
( )
| Defined parameters of western science. Later half of
17th century was a period of unprecedented scientific
discoveries, and setting up of British Royal Society and
French Academy y of sciences. ((This was also a p
period of
setting up of state-sponsored institutions to promote
economic development and Bank of England, first
national central bank founded in 1694.)
| Newton moves Aristotelian metaphysics to modern
physics,
h i the th move ffrom religious
li i anddA
Aristotelian
i t t li
reasoning about world to modern stress on attention to
natural world as route to knowledge.
knowledge 27
Move from
- theistic to materialistic explanation of nature of human
and other living creatures’ existence,
- medieval scholasticism to modern rationalism and
empiricism as nature of knowledge
- abstract theoretical reflection to the use of experimental
method
ethod of ge
generating
e ati g k
knowledge,
o ledge and
a d
- contemplative acquiescence (acceptance) to generating
knowledgeg to a notion that effective action flows from
the deployment of practical reasoning.
The Newtonian science gets tied to the rise of bourgeois

(middle-class) mercantile (commercial) capitalism. The
new rising bourgeoisie needed natural science against
the church-led
church led feudal status quo.
quo The French
Enlightenment shrugged off religion completely from
public sphere.
28
14
FRENCH ENLIGHTENMENT
| French Enlightenment produced a series of thinkers who were
committed
itt d tto political
liti l change
h iin F
France and
d th
they saw th
themselves
l
as in alliance with the rising bourgeoisie in France.
Rousseau (1712-78)
R (1712 78) is
i one known
k face
f off French
F h Enlightenment.
E li ht t
- Rousseau affirmed general rationalism and determinism.
(Determinism is theory that actions are determined by forces
independent of will,
will that is actions are a result of objective
conditions and not subjective will).
- He argued that human freedom depended on clear understanding
of the laws of nature and society
society. And any deviation form these
laws would have negative impact on the individual.
- He looks for an ideal moral/social order.
29
- He believes that the social contract,, that was originally

g y
designed to protect members has become twisted into
inegalitarian forms. He argues for a social reform for the
citizenship in republican democratic politics. (Republic is
where the supreme power is held by people or their
representatives). Notion of equality brought.
- Rousseau is considered the theorist of the French Revolution.
French Enlightenment was followed by French Revolution,

which incidentally was very bloody. There was time in Europe
when ppeople
p who considered themselves as democrats were
viewed with someone who had blood on their hands as a
consequence of French Revolution. It gave way to Napoleon
and through who bourgeoisie came to power and there was a
gradual shift to industrial liberal democracy through the
nineteenth century.
Same thing happened in UK and liberal democracy began with

the beginning of the industrial societies. In USA, with an open
continent, economic growth and liberal democracy went
straight into practice.
30
15
SAINT-SIMON – THE FIRST PLANNER (1760-1825)
| Saint-Simon – a French count, named Claude Henri de

S i Si
Saint-Simon.
- Mission to work for the improvement of humankind.
- Material industrial production
Material, production, and technology would
be the means to accomplish this improvement, and for
him, these three words became synonymous.
- Thi meant totall reorganisation
This i i off society.
i
- Saint-Simon was truly the modernization project.
- Like Descartes and Bacon,
Bacon who displayed desire to
control nature, Saint-Simon, believed in it and not only
that he did not find anything wrong with it. He declared
“d i tto d
“desire dominate
i t which
hi h iis iinnate
t iin all
ll men h
has
ceased to be pernicious, or atleast, we can foresee an
epoch when it will not be harmful any longer, but will
b
become useful”.
f l” 31
- Saint-Simon and his followers envisaged g a society y

reorganised to channel human aggression into massive
development projects and incessant industrial growth.
Theyy envisaged
g g government as applied
pp economics,, and
politics to be replaced by technocratic, instrumental
reason, by science of production.
- Key to this transformation was to be the organisation
of all material activity in the society through a unitary
and directing bank, which would be depository of all
riches total fund of production
riches, production. This bank would
oversee, credit institutions that would be responsive to
localised production needs.
- He
H can b be called
ll d th
the fi
firstt d
development
l t planner.
l H
He
travelled to USA to participate in American
Revolutionary War in 1783. Then he went to Mexico to
unsuccessfully
f ll convince
i the
h SSpanish
i h Viceroy
Vi to invest
i
in plan to construct a canal across Isthmus of Panama.
- He proposed European unification. 32
16
- After his death, his followers initiated a journal, Le

Globe which was read over whole of Europe
Globe, Europe.
- Saint-Simon had a vision of creating a ‘Supreme
Council of Newton’, in which 21 men of science and
artists would govern the world and assume the moral
authority, which was at that time was with the
Church. Saint-Simonians, too floated a vision, through
Le Globe,, to have economic and political
p union of
Europe and Far East, linked together by a system of
railroads and canals and to be financed by new
industrial development banks. (Does this sound
f ili ?)
familiar?)
- Many Saint-Simonians were engineers, graduates of
École Politechnique in Paris, as we as chemists,
g l gi t and
geologists d fi
financiers.
i IIn hi
history
t off E
European
development, particularly with respect to railroads
and banking, their influence was immense.
- Saint-Simon
Saint Simon unleashed a technocratic utopia,utopia
(technocratic faith or what one now calls
modernisation ideals).
33
- But
But, they also had realised that in fulfilling these
ideals, private property and inheritance laws came in
the way. Thus, Le Globe invented the new philosophy
‘ i li ’ iin 1832.
‘socialism’ 1832 And
A d the
th Le
L Globe
Gl b took
t k a tturn
towards socialist principles, mainly based on the
gy of abolition of p
ideology private p
property.
p y ((Remember
that the French enlightenment movement considered
owning of private property as a natural law, which was
getting challenged somewhat later in France
France, through
the ideology of Siant-Simonians.
- Tremendous influence of Saint
Saint-Simonians
Simonians is found in
the leaders of the Third world, after the independence
of these countries from European colonial rules.
(Which we will see later.)
later )
34
17
ADAM SMITH (1723

(1723-90)
90)
| Known for economic thought,

thought called classical
economics
| He affirmed Newtonian method of proceeding from
first principles to reconstruct the complexity of the
observed world.
35
Key ideas of Smith’s economic system are:

a)Division of labour, where specialization in production
coupled with technical innovation allows vastly
increased production and economic growth.
growth
b)The notion of market, where products are offered to
consumer and which acts as an institutional structure
where the buyers and sellers meet and agreements on
price of land (through rent), labour (through wages)
and capital (through profit) give signal to all parts of
the economic system of how the future is to be
rationally ordered.
c) The postulate of economic rationality, the ideas that
the buyers and sellers are rational agents (actors) who
know their wants.
wants
36
18
d) The notion of spontaneous order whereby the

pursuit of individual satisfactions generates via the
mechanism of the invisible hand optimal societal
benefit. The invisible hand is the social structure.
e) The idea of economic progress over time as the
market freed of mercantilist restriction worked to
secure wealth of the nation.
nation
Smith’s work pre-dates industrial revolution and
does not anticipate industrial society.
society
37
Impact of Smith’s work on social sciences is that:

a)The sphere of market can be investigated
naturalistically
li i ll b because iit iis the
h realm
l off economic i
causes and effects
b)Th ttechnical
b)The h i l knowledge
k l d off economic i science
i will
ill
enable actors to order their activities better.
c) His notion of rational economic man is still used in
economics as an ideal type whereby economic activity
y
can be analysed.
38
19
Adam Smith
Smith’ss theory articulates the interests of the
rising industrial capitalists. They were attracted to the
following arguments of Smith:
i) The free pursuit of private gain can act to raise the
levels of living of the entire community.
ii) How individuals in a community can be pursued to take
up activities that would benefit both the individuals as
well as the whole community.
With regards d to
t wages off the
th workers,
k he
h says that
th t the
th
wages should be natural wages. Natural wage was a rate
that just allowed the workers to survive and reproduce.
If wages fell below subsistence levels than the workers
would die and there would be fewer workers whose
wages would then have to increase and by that wage
rates would increase.
increase If more wages then improvement
in living standards and more workers (either by more of
their children surviving as he said or more becoming
workers),), that would bringg down the wage.
g 39
Smith was also father of Public Finance, which was

then picked up by Pigou. Smith did say that there
was role of government. He said how the
government could raise its revenues.
revenues That was done
to generate high economic growth rate. That was to
be done through taxation. He laid down four
maxims/
i / rules
l for
f ttaxing
i theth public:
bli
(i) Taxes should be proportional, every one should pay
the same proportion of their income as taxes (unlike
today as many of the taxes are progressive) (when
Smith was writing, most taxes were regressive and
a proportional
ti l tax
t would ld h
have reduced
d d th
the ttax
burden on the low income families)
40
20
(ii) Tax payers should not be kept in dark about their

taxes, they should know in advance how much they
have to pay and that the tax laws should not be
changed radically from year to year.
(iii) Taxes should be levied at a time and in a manner
that
h iis most convenient
i ffor people
l to pay. Eg.
E
Current practice of levying capital gains tax when it
realised and not when it is accrued is best example
of this maxim.
(iv) Best tax was the one that was least expensive to
collect.
41
Smith s political economy

Smith’s
i) There is increasing interdependence of people within a
society as the production system advances.
ii) W l h was derived
Wealth d i d from
f creative
i h human llabour
b
working on available natural materials in order to
produce useful objects. (Labour theory of value
subsequently
b l d
developed
l dbby M
Marx).) Th
The value
l off goods
d
traded in the market place derived from the labour
embodied in them.
iii) The key to increase in wealth of nations is the rise
in labour productivity associated with the increasing
division of labour.
labour As the tasks of production are
broken into specialist parts on the basis of advances in
productive techniques and machinery then both the
overall output of the economy increases and the
interdependence of the various elements of the
economy increases.
42
21
iv) How were these individual actions ordered (organised) so

that
h there
h was no anarchy h andd the
h overallll harmony
h was
maintained? That was through the market place, through
the rewards of land, labour and capital.
v) How are the prices of each of the factor of production,
land, labour and capital determined? Aruges Smith,
through what is the social circumstance of each of the
actor
t ini concerned,d the
th labour,
l b the
th capitalist
it li t and
d the
th
landowner. Smith is dividing the population into different
classes and analysing their position in the overall
economy (This class analysis,
economy. analysis Marx takes forward to give
his analysis of society and social change.) Orthodox
economists look at individual behaviour and not classes.
Smith’s economics is called classical economics. From

there the term neo-classical comes, one who pick up the
market
k t partt off Adam
Ad S
Smith’s
ith’ th
theory andd nott th
the political
liti l
economy part. (The classical economics grapple with the
grasping of structural dynamics underlying surface
market phenomenon).
phenomenon) 43
Neo classical economists or what is called the New

Neo-classical
Right emerges from the Adam Smith’s theory of free
market. This is a misleading treatment of Adam
Smith. They make an overarching claim that the free
markets maximize human welfare. They argue that:
i) Economically,
E i ll free
f markets
k act efficiently
ffi i l to distribute
di ib
knowledge and resources around the economic system
and that leads to maximization of material welfare
(The current regime of IPRs do not efficiently
g )
distribute knowledge)
ii) Socially, as action and responsibility for action
resides with the person (individual), then the liberal,
individualistic social system ensure that the moral
worth is maximised.
44
22
iii) Politically, as liberalism offers a balanced solution

to problems of deploying, distributing and
controlling power then liberal polities ensure that
political freedom is maximised.
maximised
iv) As the whole package is grounded in genuine
positive scientific knowledge then in such a system
there would be effective deployment of positive
knowledge.
Free market comprises of atomistic individuals who
know their own individually arising needs and
wants and who make contracts with other
individuals through the marketplace to satisfy their
needs and wants. The market is a neutral
mechanism for transmitting information about
needs and wants and goods that might satisfy them.
45
According to the New Right, this model is a

satisfaction-maximising asocial mechanism in which:
)
a)There is legally
g yg guaranteed p
private ownership p of
means of production,
b)There is pervasive perfect completion amongst the
suppliers who operate in complex division of labour.
Perfect market is where there is abundance of
suppliers
li andd consumers, there
th iis perfect
f t iinformation
f ti
of buyers and sellers and commodities and there is no
monopoly.
monopoly
c) The suppliers are aiming to meet the demands of
sovereigng ((independent)
p ) consumers
d) Everything is ordered through the market.
46
23
Track record of the New Right. The World Bank and the IMF are
part of this New Right.
Right
i) In UK and USA, that has led to unemployment, reductions in
general welfare, declining manufacturing production and
mountains of debt. ((Something g that has begun
g to happen
pp in
I di )
India).
ii) Other alternative models have succeeded, such as social market
system, which is based on consensus-centred corporatism, or
east Asian experiment of state
state-assisted
assisted development, the latter
being particularly being cites as a great success.
iii) In the third world, post-1980s, the neo-classicism has governed
the policies of the government, which was not so immediately
after the second World War
War, when the newly independent third
world country governments were aware of their political-
economic, social-institutional and cultural weaknesses.
iv) Increase in hungerg ((see Africa)) through
g ppermanent damage g done
to the
h fragile
f il economiesi off the
h Third
Thi d World.
W ld (Susan
(S George’s
G ’
work)
These programmes of liberalisation

liberalisation, have usually
required parallel programmed of political repression. (In
India, it is accompanied by communalism, a method through
which political freedom get curtailed, of the minorities directly
and of the majority through shrinking of political space.)
space ) 47
KARL MARX
- Dialectics of Historical Change
Dialects is investigation of truths in philosophy. The

dialectal method assumes that everything is under
constant change g and only y thingg that is the final truth
or universal or permanent is the constant change.
(This sounds paradoxical). And hence, there is nothing
that is given. In contrast, there is opposing view in
philosophy
hil h that
th t says that
th t there
th are certain
t i truths
t th ththatt
are permanent (constant) and which do not change and
one of that is ‘God’. ‘Dialectics of Nature’ written by
Fredrick Engels
Engels, talks about this constant process of
change in the daily processes of nature. At the end of a
process of change, a thing transforms itself into its
pp
opposite. ((Dayy becomes night,
g , hot becomes cold,, and so
on)
48
24
- Materialism ((Historical Materialism))

Materialism as a science argues that there is material
basis for everything. That is, the people make their
lives in their routine productive activity. This
productive activity is taken to be the central business
of human social life and around it more abstract
concerns, such as law, religion, art, etc. cluster.
49
“In the social pproduction of their life,, men ((and women))

enter into definite relations that are indispensable and
independent of their will. relations of production which
correspond to a definite state of the development of
their material productive forces. The sum total of these
relations of production constitutes the economic
structures of society, the real foundation, on which rise
a legal and political superstructure and to which
correspond definite forms of social consciousness
consciousness. The
mode of production of material life conditions the
social, political and intellectual life processes in
general.l It is
i nott th
the consciousness
i off men th
thatt
determines their being, on the contrary, their social
beingg that determines their consciousness” ((In preface
p
to A Contribution to the Critique of Political Economy
in 1859) by Karl Marx).
50
25
Religion is the superstructure

superstructure, that he calls is opium of
the masses.
Know a person through his/her actions and not words

as the true identity is in the material being (material
actions) and not in consciousness.
Marx has a materialist conception of History, where is

makesk h human production
d ti tto analysis
l i off human
h life.
lif
The history is interpreted through physical evidences
found and not from the epical works written by saints,
etc.
t H He argues that
th t human
h beings
b i make
k ththeir
i own
patterns of life. (A book called Man’s Worldly Goods by
David Liberhan that is the materialist interpretation
off hi
history).
) Thi
This materialist
i li thesis
h i off history
hi is
i now
widely and routinely accepted as a basis of social
science exceptp the religious
g fundamentalists of all hue,
51
Hindu, Muslim, Christian, etc.)
- Marx gave a philosophical and economic critique of the

capitalist economic system, which was the economic
y
system of his time. The new industrial economic
system was based on capitalism. He uses his
materialist philosophy to argue out that capitalism is
not the
h final
fi l economic i system and
d it
i was not given.
i It
I
is bound to change and move towards socialism.
(Remember socialism as a philosophy had come into
(Remember,
being in France with the work of Rousseau and then
Saint-Simon followers). )
52
26
- Marx’s critique of capitalist economic system is that in

thi system,
this t th labour
the l b b
becomes a routine
ti f t
factor off
production and the worker’s labour is controlled by the
others. Because of the division of labour, work
specialization routinization of work,
specialization, work and the external
control of labour, the worker gets alienated from the
product of his labour (that is alienated from the
product he makes).
p ) This leads to destruction of human
creativity. And hence, worker becomes an element in
the capitalist production system. And hence, the
labour goes to work for wages and not because he/she
id tifi
identifies with
ith this
thi work.k This
Thi alienation
li ti off worker
k
from the work is the essence of capitalist system of
production. Also human beings are alienated from
their ‘species
species being
being’ as capitalist social relations
degrade the collective human creation of self and
society. Thus, there is an overall alienation that takes
place in the system.
p y
53
- But, this alienated labour in the capitalist system is

nott voluntary,
l t b
butt in
i a sense iis fforced.
d
(This alienation process, in the current world is
addressed by law and order machinery. In the earlier
f
forms off society,
i t it was ththe id
identity
tit off iindividuals
di id l with
ith
the production system and by that with each other,
that kept society in stability. What we now call social
controls )
controls.)
But, this alienation also frees the labour from societal
controls. The labour becomes a free labour, not tied to
land or any asset.
asset Labour becomes a proletariat (those
earning from wages by selling their labour).
Proletariat having no other asset but their own labour
power to sell.
p
- According to Marx, the production system in
capitalism is social, that is through social
division of labour,, (no ( one individual produces
p any
y
single
i l commodity di or product),
d ) but
b the h value l
produced through labour is appropriated (taken
by force) by individuals, that is by capitalists, the
owners of capital.
capital 54
27
Marx’s economic analysis,y , that is analysis

y of economic
dynamic of capitalism. The main features are:
i) Capitalism is historically novel because in it the
production is oriented not to the satisfaction of social
or human needs but to the requirements of the market
exchange of commodities.
ii) Each co
commodity
odit ha
has a use
e value
al e (the ffunction
ctio of
commodity) and exchange value (the value of
commodity in market).
iii) Value is created by expenditure of labour (like
Adam Smith).
iv) In a day
day, the labourer sells his labour (calls labour
power) at the market price produces a surplus over his
replacement needs.
v)A
)A labour (worker)
( orker) sells his power
po er to labour and hence
it is the labour power that has value and not the
worker who has value.
55
vi) A labourer (worker) gets the price for his labour

power that is just enough to provide the labourer’s
conditions of existence (food, housing, basic welfare,
and so on).
on)
vii) The labourer gets the wages that are much lower
than the value created by the labour power of that
labo e That iis, the labo
labourer. labourer
e ccreates
eate value,
al e oover
e aand
d
above value required to subsist that labour.
viii)) The additional value created by y the labour in this
process is called surplus value of labour and that is the
basis of profit in a market place, which is earned by
the capitalist,
p , one who deploys
p y capital
p in the
production system.
ix) The capitalist system therefore is inherently
exploitative Ratio between labour necessary to
exploitative.
reproduce labour (called necessary labour) and surplus
labour, is called the rate of exploitation.
56
28
x)Capitalist system is competitive and thus technically

innovative. In the process, the system reaches a stage
where the technical innovations lead to more and more
deployment of capital and becomes capital-intensive.
capital intensive
The labour is replaced by capital. On one hand, the
p
addition of surplus value of labour decreases by y this
and hence the profits fall. On the other hand, the
labour are squeezed and their wages (value given to
the labour)) ffall due to surplus labour in the market. It
leads to reduction in purchasing power of commodities
by the labour.
labour This leads to a situation of
overproduction in the capitalist system. This leads to
g , closure of factories,, production
fall in wages, p decline
and thus depression. The great depression of the
thirties is the result of the over production in the
capitalist
i li system.
57
This overproduction leads to capitalist seeking newer and

newer marketk (which
( hi h the
h colonialists
l i li did through
h h capture off
the third world). By the First World War, the globe was divided
by the colonialists in their colonies. Germany was the new
entrant
t t in
i th
the capitalist
it li t system
t by
b earlyl 20th century.
t A
And
d so
was Japan. To be able to have a share of the global cake of
colonial countries, Germany wages the Second World War,
under the leadership of Hitler.
Hitler
Today’s system is also a crises of global capitalism. There is

overproduction
d i off various i goods
d and d services,
i iincluding
l di ffood,d
but, there are no buyers. People do not have adequate wages to
buy even food, which leads to hunger deaths in many parts of
th world.
the ld T
Today’s
d ’ technology
t h l has
h reachedh d a stage
t that
th t it can
produce everything in abundance, but, the economic system is
such that there are no adequate buyers of these goods. (Hence,
the system of privatisation in services,
services e.g.
e g of water supply,
supply
sanitation, etc. in cities, would lead to situation where there
would be no buyers of these goods)
58
29
xi) The crises in capitalism on the other hand causes

misery for the proletariat, which fosters class
consciousness in them and which would ultimately
lead them to organising to over throw capitalism.
xii) The basic contradiction in the capitalist system is,
as mentioned,
ti d th
the production
d ti iis social
i lb
but,
t th
the profits
fit
and property ownership is private. Through
g
organisation, the labour would overthrow such a
system and remove this contradiction, and create a
system where there is no private ownership of
property.
property
59
Marxian view of state,, party

p y and revolution
Each dominant economic class of any system, has the state
through its law and machinery, working in the benefit of the
dominant economic class. And the ideology or the theory of that
dominant economic class becomes the ideology or the theory of the
state. This is why, in the pre-industrial periods, the feudal classes
and then the mercantile classes had theories to support their
dominance. Which, Adam Smith overturned and whose theory the
rising industrial class made their own.
Thus, executive of the modern state is a committee for managing
the common affairs of the whole bourgeoisie. “State is a machine
in the hands of the few wealthy to oppress the majority in the
process of appropriation (taking by force) the benefits produced by
the majority.” Lenin, the father Russian Bolshevik Revolution
gave this theory of state and used the same in establishing
proletarian state in Russia. It is argued that the overthrowing of
the bourgeois state is the only way to establish a state of the
proletariat. And this overthrowing of bourgeois state would be
necessarily violent. (Overthrowing of feudal state in France was
through French Revolution, that established the power of
industrial capital over the feudal lords).
lords) The theory of state gets
the name Marxism-Leninism, implemented in a new way in
China by Mao-tse-tung.
60
30
Impact
p of Marxism
i) This Marxist approach to analyse a societal system is something
that is new and has captured the social scientists. That is, looking
at the system as a whole and analysing the society from the
perspective of class analysis.
analysis The system of exploitation as
inherent in the capitalist system is the beginning of the economic
analysis of a society.
ii) Role of state was what has gripped the planners. Only in socialist
countries the cities are planned as the way planners have
countries,
planned.
iii) The middle path between socialist state and capitalist state
is the welfare state where the state acts as a welfare distributingg
mechanism,
h i thereby
h b capitalist
i li k keeping
i the
h controll off state and
d
thereby over the private property whereas ensuring that the
labour are not pushed to such a stage of penury that they
g
organise on class lines to over throw the state.
iv) Marx’s work encompasses a body of social scientific ideas
and related subsequent social movements. Social movements
often do not take place spontaneously. Leaders, that is, subjective
forces are required for any social movement to take place
place. An
organisation is required to carry out social movement. The
leaders and cadres in such organisation come with this new
understanding of the social reality, the reality of exploitation,
that leads to a social movement. 61
v)) Marxism has been a very yppowerful ideology

gy that has attracted the
oppressed, the Third World Countries (all national liberation
struggles in the third world were led by leaders influenced by
Marxist ideology of socialism and communism), the labour
movements and even women’s
movements, women s movement.
movement Within each
movement, women’s movement, environmental movement, which
has led to changes in development paradigm globally, there is a
very y strong
g presence
p of Marxists.
vi) Academics, throughout the world, especially in Europe and
the Third World, have been influenced by these ideas. A stream of
social scientists, called the structuralists emerge from the Marxist
school
h l off thought.
h h
vii) Theories of imperialism ‘as highest stage of capitalism’ were
mounted by the Marxists. It is from this understanding, theories
off ‘finance
‘fi capital’
it l’ and
d currentt global
l b l economic
i system
t comes.
From here emerges the core-periphery theories in global
development.
viii) Theories for analysing cities,
cities the primate cities,
cities the global
cities, settlement hierarchy, and city planning efforts, are all
Marxist legacy (much as we may not like to acknowledge it).
62
31
DAVID RICARDO (1772

(1772-1823)
1823)
- Theory of Comparative and Absolute

Advantage
- Th
Theory off Diff
Differential
ti l Rent
R t
1. Smith said, trade occurs when there is
absolute advantage.
advantage
2. Ricardo’s contribution is about comparative
advantage and he said that trade will occur
even if there is comparative advantage and not
absolute advantage.g
63
Automobile Rice
US 1 (per worker per year) 1 (per worker per year)
Japan 3 (per worker per year) 2 (per worker per year)
US has 200 workers and Japan has 100 workers and are equally divided between car
production and rice production
US 100 cars 100 tons
Japan 150 cars 100 tons
Total 250 cars 200 tons
If US only rice and Japan only cars
US 0 cars 200 tons
Total 300 cars (world output higher by 200 tons
50 cars than before)
Who gets the extra output? Depends on the exchange rate.
If 100 cars = 100 tons of rice
US 100 cars 100 tons
Japan (Japan 200 cars 100 tons
gains more)
If 150 cars = 100 tons of rice
US (US gains 150 cars 100 tons
more, gain extra
50 cars)
64
32
| Japanese workers are more efficient at producing

cars. US workers are less efficient in producing
car and producing rice
rice. But,
But US workers are
relatively less inefficient in producing rice.
| US and Japan will benefit from specializing in
what they are relatively better at producing and
then trading with each other.
65
Differential Rent Theory

i) Most productive land always brought first into use.
E.g. Land A of 1 hectare produces 100 tons of wheat.
When next best (B) is brought into use use, which produces
75 tons/hectare of wheat then the value of Land A will
be 25 tons worth of wheat. When land C is brought
into use,, its productivity
p y being g 60 tons/ha,, the value of
l d A will
land ill b
be 40 tons andd off B will
ill b
be 15 tons. A
And
d iit
goes on. More the land brought into use, higher will be
the value of A
In urban land, the most productive land is the most

accessible, with best facilities, etc. When next best
l d is
land i brought
b ht into
i t use then,
th the
th price
i off best
b t land
l d
goes up.
With city expansion, price of best-located lands go up.

Cecil Pugh
66
33
ARTHUR CECIL PIGOU (1877

(1877-1959)
1959)
Welfare Economics & Concept

p of Public Goods
| For some goods, all production costs are borne by the consumer
via the pprice of the g
good
| For some goods, part of the costs of the goods is passed on to the
society in the form of social costs. E.g. pollution.
| If that is possible, then firm may produce too many goods that
would create pollution, which will increase the pollution. Firms
may use old technology so that pollution continues. There is no
way the firm can be made to change the technology. These are
called
ll d negative
ti externalities
t liti
| There are goods whose production can exceed the benefits that
the consumer gets. E.g. Police, fire protection, national defence,
health care spending,
spending education spending
spending.
| If an individual buys a medicine for cold, to remedy his/her cold,
the individual benefits. But, this person’s taking of medicine stops
infecting others,
others then there are social benefits of private benefits.
benefits67
| Divergence
g between social costs and p private costs are called
‘externalities’, ‘spill-over effects’ and ‘third-party effects’.
| Divergence between private and social costs might justify
government intervention in the market place.
| When there are large positive externalities, people gain whether
they pay for it or not. This ability to obtain benefits without
paying for it is called ‘free rider problem’. If I do not pay, it will
g t done
get d iin any case attitude.
ttit d
| If no one pays but everyone gains then there is loss to every one
in the long run. To overcome this, government must tax everyone
so that such public goods are provided by the government.
government
| In case of privately provided goods, if there are negative
externalities, that good is taxed. If there are positive externalities
then that good gets subsidy.
subsidy
| Costs of externalities have to be internalised in the cost of
production of goods.
| Sometimes non-economic measures,
Sometimes, measures such as legal measures are
adopted for negative externalities
68
34
JOHN MAYNARD KEYNES (1883 – 1946)
Called the practical saviour of capitalism,

capitalism proposer of
short-run solutions to economic problems.
Inflation
| Warned of practical problems of inflation. Said that
central government must intervene in the issues of
inflation by controlling money supply.
supply Some
economists opposed it saying that inflation will take
care of itself in the long run. Keynes said: “In the long
run we all will die”.
| Keynes said that short-run interventions are necessary
in the economy and these interventions have to be by
the government. Some economists have criticised him
for thinking about short-run solutions. Keynes 69
believed that it is better to solve the problems now.
Unemployment
| If there was more demand, for goods, then, economies
would prosper, businesses would expand, and hire
more workers (create demand for more workers) and
unemployment would cease. If demand is low, the
firms would be forced to cut back on production and
then on hiring and there would be lay-offs and
unemployment and then depression.
| Great depression of 1920 to 1930s in US was handled
by Keynes
| Keynes
K asked
k d for
f comprehensive
h i socialisation
i li ti off
investment decisions, which a government take
g the central bank through
through g interest rate
policies, high interest rate will reduce investment and
by that production would decline and vice versa.
70
35
| Some thought
S th ht that
th t K
Keynes was asking
ki ffor ttotal
t l control
t l
of government over business investment decisions.
What Keynes was asking for is government spending
policies
li i to stabilise
bili aggregate level
l l off iinvestment in
i
the economy.
| Keynes
Keynes’ss contribution is important for the macro
economy.
| Way out of depression is to create more of housing,
more schools
schools, more hospitals,
hospitals more roads
roads, etc
etc. When
private investments in these was low, government
must invest. If government does not have money then
government must borrow (and run budget deficit) and
engage in public investments in construction.
| When business investments were high, government
must cut-back
b k spending
di and d borrowing.
b i
71
GUNNAR MYRDAL (1898-1987)
| Considered the main architect of Swedish Welfare State

| Myrdal convinced the then Finance Minister of Public Works and to
run budget deficits in order to reduce unemployment
| Theory of Cumulative Causation as an alternate to Equilibrium
Analysis
| Introduced Ex-Ante and Ex post distinction in economic analysis.
Ex Ante or expected is before hand; before the event analysis that
Ex-Ante
gives estimations and forecasting. Ex-post is after the fact, analysis.
Ex Ante gives estimates of expected outcomes and Ex post gives
measures of the actual outcome.
outcome
| Theory of Cumulative Causation – involves a positive or negative
feedback involving two or more variable. It can be contrasted with
uni directional causal change
uni-directional change, in which
which, A causes change in B,B but
B has no further impact on A; the change stops at B. The system
reaches new equilibrium with changed values of variables A and B.
72
36
| Cumulative
C l i Causation
C i means thath variables
i bl A and d B impact
i each
h
other in a process of change. Variable A impacts B and Variable B
in turn impacts A and both reach a new level. The system is
under
d constant
t t change
h andd th
there iis no equilibrium
ilib i att any point.
i t
| When A and B both increase, they are in virtuous cycle of
positive feedback loop; when A and B both decline then we have
vicious
i i cycle
l or negative
i feedback
f db k loop.
l He
H used d this
hi idea
id to
explain poverty and race relations.
| He showed that how entire American society suffered from low
socio economic situation of the Black Americans, now called
African Americans. He said, discrimination breeds discrimination.
This analysis showed that this situation can be remedied in one of
the
h many ways and d improvement
i in
i any one area would ld initiate
i ii
the virtuous cycle of improvement. But, where to start? He looked
to American institutions to break into this vicious cycle of
di i i ti against
discrimination i t th
the bl
blacks.
k Measures
M he
h proposed: d
73
1. Organisations
O i i such
h as churches,
h h schools,
h l traded
unions and the government to play an important
role in improving the socio
socio-economic
economic conditions of
the blacks.
2. Expansion of the role of the Federal government in
the
h areas off education,
d i housing
h i and d income
i security.
i
3. Laws making it easier for the blacks to vote.
4. Ad
Advocated
t d migration
i ti from
f the
th South
S th to t the
th
industrial North, the latter having more jobs in the
new economic sector than the latter that provided
p
jobs on the farm land.
5. Use of fiscal policy to achieve full employment (like
K
Keynes) )
74
37
Myrdal used this theory to explain poverty in South Asia (Asian

Drama, 1968). A way out was suggested:
1. To spend more on education
2. To spend more on sanitation and, by providing clean water and
p g other p
developing public amenities.
3. Income support programmes to address the problem of income
inequality.
4. While most economists argued that there was trade-off between
equality and growth
growth, Myrdal held that there was no such trade
trade-off
off
and that greater equality would lead to more rapid growth (A good
example of that is China, in the hind-sight – not stated by Mrydal).
He said that inequality leads to slower growth because of physical
and psychological consequences of poverty,
poverty as the poor are unable to
utilise their talents. A welfare state that redistributes income would
lead to higher demand and hence more rapid economic growth.
Myrdal criticised the social scientists in general and economists in

particular for not being able to speak and write in the language that
the ordinary person can understand. He also criticised the
economists’ attempt to hide their value or normative assumptions
economists
behind the façade of objectivity. He was not opposed to economists
making value judgements but was opposed to their refusal to accept
that.
75
MILTON FRIEDMAN (1912- 2006)
Two main themes of his work

(i) Money matters – Because only changes in money supply can
affect economic activity and inflation results from too much
money in the economy.
(ii) Freedom matters – Because economies run better when the
governments do not attempt to control prices, exchange rates or
entry into professions.
| Known
K ffor his
hi workk against
i t Keynsianism.
K i i He
H argued d against
i t
the use of stabilisation policies to control either inflation or
unemployment. He said that the fiscal policy would not work
and a monetary policy would worsen the business cycle and
lead to greater inflation.
| Friedman has opposed all forms of government intervention in
an economy
economy, as that is viewed as curtailment of political
freedom. He argued that capitalism is the best economic system
because it promotes political freedom and market can help
offset political power.
power 76
38
| He opposed all government programmes that came in

the way of individual decision-making. Such as:
((i)) Wage
g and Price Controls
(ii) Social security (because it breaks down family bonds
and is actually a transfer from the less well-off to the
wealthy, the latter tend to live longer than the former.
(iii) Government support for higher education (because it
primarily benefit the well-off).
| In contrast he has supported:
(i) All volunteer army

(ii) Education vouchers to all parents to allow them to
select
l the
h school
h l where
h they
h would ld send
d their
h i children.
hild
77
THE NEW RIGHT – NEO-LIBERALISM IN 1980S
| This is called counter revolution by some, especially by those

coming from the left and centrist traditions
| Thi iis eclipse
This li off th
the welfare
lf state.
t t
| Roots in the crises of the metropolitan heartland of the global
capitalist system that emerged in 1970s. In 1973, US took a
decision to come out of the Bretton W Woods system
y and allow its
dollar to float. This went hand in hand with collapse of US
authority globally by the emergence of Japan in the east and
European economy. Since then, Asia has risen, reducing global
p
importance of USA.
| After the election of Reagan in US and Thatcher in UK that the
New Right firmly took power. [In a way it can be seen as
protecting one’s own turf, if New Right is seen as a regressive
movement ] Progressive view of it is that this provided new ideas
movement.]
of democracy, relieving people from the clutches of the state.
| The New Right theorists claim that the modern free-market
capitalist system is maximally effective in producing and
equitably
it bl distributing
di t ib ti theth economic,i social,
i l political
liti l and
d
intellectual necessaries of civilised life.
78
39
THE CLAIMS OF NEW RIGHT ARE:

| Economically – free markets act efficiently to distribute
knowledge and resources around the economic system, then the
material
t i l welfare
lf will
ill b
be maximized
i i d
| Socially – as action and responsibility for action reside with the
person of the individual, then liberal individualistic social
systems will ensure that moral worth is maximised.
maximised
| Politically – as liberalism offers a balance solution to the
problems of deploying, distributing and controlling power, then
liberal polities ensure that political freedom is maximised.
maximised
| Epistemologically – as the whole package is grounded in
genuine positive scientific knowledge, then in such systems the
effective deployment of positive knowledge is maximised.
79
THE NEW RIGHT
| The substantive
Th b t ti core off the
th thinking
thi ki g isi that
th t free
f market
k t comprises
i
of atomistic individuals who know their own autonomously
arising needs and wants and who make contracts with other
individuals throughg the mechanism of the marketplace p to satisfyy
those needs and wants. The market is a neutral mechanism for
transmitting information about needs and wants, and goods
which might satisfy them around the system. A minimum state
machine provides a basic legal and security system to underpin
the individual contractual pursuit of private goals.
| This position has informed the policies of the World Bank, the
IMF and the US government.
government When the World Bank and the IMF
forced these policies on the borrowing governments, these were
called Structural Adjustment Programmes. The World Bank
forced upon the borrowing countries to privatise their structures
andd the
h IMF forced
f d them
h to reduce
d fi
fiscall d
deficit
fi i ((through
h h
minimising the role of state in the economy and society). The
latter resulted in cutting down of government expenditures even
on public goods.
goods 80
40
THE POLICY PACKAGE THAT CAME TO THE DEVELOPING

CO
COUNTRIES AS:
S WAS
| Any regulation of the market has to be avoided, save for

crises and the removal of malfunctions or inhibitions to full
functioning.
functioning
| Any intervention in the market is to be avoided, save to
remove causes of price distortions, so subsidies should be
abolished should be abolished, tax rates adjusted to
encourage enterprise
enterprise, tariff barriers removed along with non-non
tariff barriers or disguised restrictions.
| Any government role in the economy should be avoided, as
private enterprise
p p can usuallyy do a better jjob,, and when
governments do become involved it should be both market-
conforming, short-term and involve a minimum of
regulations
| Any collective intervention in the market should be avoided,
avoided
so labour unions must be curbed.
| International trade should be free trade with goods and
currency freely traded.
81
ALTERNATIVE SUCCESSFUL MODELS

Needless
N dl tto mention,
ti the
th developing
d l i g
countries did not benefit. Instead, two
alternatives models that were successful
were being
b i di
discussed.
d
| Social market system of Germany in place of
consensus-centred corporatism.
p
| State-assisted development, or ‘Developmental
State’ Model of Japan and East Asia, that
brought in much higher economic growth rates
than what market would have. The
‘Developmental State’ model also comes out of
Bismarckian State of Germany and ‘Meiji
‘Bismarckian’ Meiji
Restoration’ in Japan, where the State took on
role of welfare as well as promotion of rapid
economic growth.
growth 82
41
TRACK RECORD OF THE NEW RIGHT
Th W
The World
ld B
Bank
k and
d the
h IMF are part off this
hi NNew Ri
Right.
h
| In UK and USA, that has led to unemployment, reductions in

general welfare,
welfare declining manufacturing production and
mountains of debt. (Something that has begun to happen in
India).
| Other alternative models have succeeded,, such as social market
system, which
hi h is
i based
b d on consensus-centred d corporatism,
i or east
Asian experiment of state-assisted development, the latter being
particularly being cites as a great success.
| In the third world,
world post
post-1980s
1980s, the neo-classicism
neo classicism has governed
the policies of the government, which was not so immediately
after the second World War, when the newly independent third
world country governments were aware of their political-
economic social-institutional
economic, social institutional and cultural weaknesses.
weaknesses
| Increase in hunger (see Africa) through permanent damage done
to the fragile economies of the Third World. (Susan George’s
work)
83
MAX WEBER
| Weber's ideas are complex and about many

dimensions of development. He is primarily
concerned with analysis of capitalism but at
the same time sceptical of modernist
project.
p j For example,
p , the modernist
institutions have become bureaucratic. And
"bureaucratic administration means
f d
fundamentallyll domination
d i i through
h h
knowledge" wrote Weber.
84
42
| He sees th
H thatt patterns
tt off social
i l relationship
l ti hi would ld be
b
stable and that is because it is believed that these
relationships are in a legitimate order.
| That there are three types of legitimate orders and
these orders of authority are accepted. These are: a)
Traditional authority, b) legal authority and c)
charismatic authority
| According to Weber, the modem capitalism is governed
by legal authority
authority. The social institution that embodies
such legal authority is the modem bureaucracy.
| Contemporary capitalism cannot function without the
b
bureaucratic
ti organisation.
i ti He
H thinks
thi k that
th t the
th
bureaucratic authority tends to be conservative and
expansionary. In modem capitalist society, ever
greater areas off social
i l lif
life are subject
bj to llegal-rational
l i l
rules.
85
| This is the key to understanding modem capitalism.

H calls
He ll bbureaucracy a gatekeeper
t k off the
th capitalist
it li t
systems, who provide or deny opportunities to
individuals to access the benefits of the system.
| Politically, he speaks of the iron-cage of bureaucracy.
He is sceptical of bureaucracy.
| Weber also found that the formal organisations that
grew out of modernity's desire to power, are highly
bureaucratic structures. The thrust of these
organisations is towards greater calculability,
calculability
effectiveness and control. But, in this process, these
organisational issues become more important than the
substantive (important) values and ends that the
organisation can serve and are meant to serve. In fact,
the bureaucracy in these organisations subvert the
substantive values and ends it might serve in light of
the functional efficiency of the organisation for which
they are there.
86
43
| World Bank is a great example of such a bureaucracy,

argues Bruce
B Ri
Rich
h in
i his
hi book
b k titl
titled
d 'Mortgaging
'M t i ththe
Earth'. For example, World Bank might consider the
issue of staff leaking the documents more serious
organisational
i ti l matter
tt ththan th
the organisation
i ti ititself
lf
taking up projects that have horrendous, often
foreseeable, environmental and social consequences. In
f
fact, the
h World
W ld Bank
B k has
h b been quick
i k to tack
k on to the
h
prevailing development philosophies, for example,
poverty alleviation under McNamara, to global
environmental management in the recent years. But, if
there are failures on this front or if the World Bank's
intervention has led to worsening g of the situation
(which it has in many instances that have been well
recorded), then no one is accountable. But, these
themes crop p upp in the Banks' activities because these
fit well into Bank's formal logic and institutional
needs.
87
| And the Third World countries, through their bureaucracies

started borrowing from the World Bank for huge projects to
realize the "ideals of modernization", no one had heeded to Max
Weber's ggloomy y warnings.
g Most Third World leaders dreamed of
and even dream of now, of replicating Tennessee Valley
Authority, great highways and public works of American cities
and other public works of world's most powerful and economically
successful nations, argue Bruce Rich.
| A way out of the grip of this bureaucracy is emergence of a
charismatic leader,, according g to Weber. From time to time,, a
charismatic political leader is thrown up, who would be elected by
the masses, and who would correct the bureaucratic controls on
modem institutions. This is Weber's belief in individualism, that
an individual will correct the system from time to time. That
finally the values will rule over facts.
| For
o Webe
Weber,, itt iss from
o the
t e ranks
a s ofo the
t e bourgeoisie
bou geo s e that
t at the
t e leader
eade
would be thrown up and not from the working class as Marxists
argue.
88
44
CRITIQUE OF MODERNITY
| Although
Alth h modernity
d it had
h d its
it origins
i i in
i the
th 17th century,
t it
triumphed worldwide in social and economic
transformations only two centuries later, in the 20th
centur Also,
century. Also inherent in the implementation of modernist
paradigm were many contradictions.
| Though, freedom and democracy was a part of the
philosophy
hil h off modernity,
d it but,
b t that
th t was subverted
b t d from
f
within. The modernist paradigm was the building of empire
of man over things and was from the beginning rooted in
th will
the ill to
t power and d domination.
d i ti It entailed,
t il d empire
i off
men over other men and men over women, of Western
societies over all others. (Now we use the term North over
South )
South.
| The liberation of individual and society from previous
constraints left the world and society empty for new, more
t t l fforms off control.
total t l 89
CRITIQUE OF MODERNITY - CONTI
| Max W
M Weber
b found
f d th
thatt iin th
the project
j t off modernisation
d i ti and d
rationalisation, bureaucratisation has taken place. And
"bureaucratic administration means fundamentally
domination through g knowledge" g wrote Weber.
| Weber also found that the formal organisations that grew
out of modernity's desire to power, are highly bureaucratic
structures. The thrust of these organisations is towards
greater calculability, effectiveness and control. But, in this
process, these organisational issues become more
important than the substantive (important) values and
ends that the organisation can serve and are meant to
serve. In fact, the bureaucracy in these organisations
subvert the substantive values and ends it might serve in
light of the functional efficiency of the organisation for
which
hi h they
h are there.
h
90
45
CRITIQUE OF MODERNITY – CONTD.
| World
W ld B
Bankk iis a great
g t example
l off such
h a bureaucracy,
b
argues Bruce Rich in his book titled 'Mortgaging the
Earth'. For example, World Bank might consider the issue
of staff leakingg the documents more serious organisationa1
g
matter than the organisation itself taking up projects that
have horrendous, often foreseeable, environmental and
social consequences. In fact, the World Bank has been
quick to tack on to the prevailing development
philosophies, for example, poverty a11eviation under
McNamara, to globa1 environmenta1 management in the
recent yyears. But,, if there are failures on this front or if the
World Bank's intervention has led to worsening of the
situation (which it has in many instances that have been
well recorded), then no one is accountable. But, these
themes crop up in the Banks' activities because these fit
well into Bank's forma1logic and institutiona1 needs.
91

| And the Third World countries, through their bureaucracies started
borrowing from the World Bank for huge projects to realize the "ideals of
modernization",, no one had heeded to Max Weber
modernization Weber'ss gloomy warnings. Most
Third World leaders dreamed of and even dream of now, of replicating
Tennessee Valley Authority, great highways and public works of American
cities and other public works of world's most powerful and economically
successful nations, argue Bruce Rich.
| Technically large project~ have invariably led to displacement, be it in
developed world or the developing world. For example about 60000 people
were displaced for construction of 7 mile Cross Bronx Highway in New
York City in 1952. This was because of Robert Moses, a public planner in
the city
city, whose built his empire from 1930s onwards to 1960s
1960s. This project
is typica1ly a 20th century technocracy at work.
| According to Lewis Mumford, in the early 20th century, influence of Robert
Moses on the cities of America was the greatest.
| F
Foundations
d i off Moses
M Empire
E i was lackl k off political
li i l andd financial
fi i l
accountability and control through withholding of information (something
sounding familiar to us?)
| Moses empire was built through numerous autonomous development
agencies
i that
th t generated
t d their
th i own revenues.
| Robert Moses was a developer with his empire spanning over nearly half
the area of New York City at that time.
92
46

| This approach to development, Bruce Rich compares with the way
th W
the Worldld Bank
B k functions.
f ti It creates
t numerous independent
i d d t
autonomous project authorities in the developing world, for
example NTPC in India. These agencies were not often open to
normal legislative and judicial scrutiny, operated according to their
own charter and rules (mostly coming from the World Bank) and
staffed with technocrats (bureaucrats) often sympathetic, "even
beholden" (pp. 227) to the bank.
| In globalisation phase, development is being pursued through such
special institutions.
| Modernisation proceeds on the path of technological
t
transformation
f ti off nature
t andd society.
i t TTechnology
h l and
d technocracy
t h
as organising principal of a human society appear to take an
autonomous dynamics of its own.
93
| Modernisation and its application on human societies and

ecosystems is - abstraction, analysis, reconstruction and control.
(Control through bureaucracy)
| It is control of man over nature, of capital over people
(
(represented d through
h h ideology
id l off economic
i growthh over
improvement in human quality of life), of men over women, of
developed world (North) over South, of urban over rural, of core
over periphery. This analysis comes out the consciousness and
analysis
l i off those
th nott b
benefiting
fiti ffrom modernity's
d it ' projects,
j t such
h as
type of urban development, type of infrastructure development,
etc.
| Modernisation has worked through a potent combination of
rationalized bureaucracy, economic organisations (that favour
capitalism with its philosophy of neo-classical economics) and
technological organisations that are politically unaccountable.
| Nature has revolted against the gains of modernisation.
modernisation For
example, real looming threat of climate change, imbalanced food
security, rising health burdens because of wide spread use of
hazardous materials, etc.
94
47
| The local communities dependent on nature, that is the indigenous

societies
i ti dependent
d d t on ththe ecosystems
t h
have revolted.
lt d
| Environmental degradation is severe. Minimum of environmental
resources, such as water, is on the decline. Per capita water
availability is on the decline a time will come in Third World
countries when there will be nearly no drinking water. India is one
of them.
| Many small Third World Countries have devastated public
finances as they are highly indebted to the World Bank,
finances, Bank in the
process of pursuit of modem projects. Instead of economic progress,
many Third World countries are steep in debt. Instead of self-
sustained growth, these countries are upto ears in debt. Problems of
unemployment housing
unemployment, housing, human rights
rights, poverty and landlessness
are increasing.
| Global inequalities have increased. In 1960, the ratio between the
world's riche and poor countries was 20:1, which increased to 46:1
i 1980 and
in d wentt up to
t 60:1
60 1 in
i 1989.200
1989 200 hhundred
d d years ago, thi
this
ratio was 1.5: I! This is the achievement of modernization process!
| Third world countries also have devastated environment. For
example, long famine in Ethiopia, which has resurfaced this year. 95
| In any case, the modemisation did not take place in most Third World
Countries. It did not bring in scientific temper, even though many of
th Thi
the Third
dW World ld leaders,
l d immediately
i di t l after
ft their
th i iindependence
d d
embarked on large modem technocratic projects. For example, Nehru
said; "Industries are the temples of modem India". And in India, "We
have taken a Tryst with Destiny
Destiny"..
| "Long years ago, we made a tryst with destiny and now the time
comes when we shall redeem our pledge, not wholly or in full
measure,, but very y substantially.
y A moment comes,, which comes but
rarely in history, when we step out from the old to the new.
| "That future is not one of ease or resting but of incessant striving so
that we may fulfil the pledges we have so often taken and the one we
shall
h ll take
k today.
d The
Th service
i off IIndia
di means the
h service
i off the
h
millions who suffer. It means the ending of poverty and ignorance and
disease and inequality of opportunity. .. To bring freedom and
opportunity to the common man man, to the peasants and workers of
India; to fight and end poverty and ignorance and disease; to build up
a prosperous, democratic and progressive nation, and to create social,
economic and political institutions which will ensure justice and
f ll
fullness off lif
life tto every man and d woman. " 96
48

| The scientific temper did not emerge and on the contrary,
religious fundamentalism is on the rise globally,
globally more so in the
Third World.
| Poverty has not been eradicated and it is on the rise in many
parts of the world. Hunger deaths are on the increase inspite of
f d surpluses.
food l
| Improvement in quality of life of people all across the Third World
has not taken place. For example, IMRs, MMRs, are quite high.
There is no full literacy achievements. After SAP, there have been
reversals in achievements in these indicators in many African
countries. The decade of 1980s is therefore called a lost decade
from the perspective of development.
| Neo classical economics
Neo-classical economics, pursued in all developed countries
countries, (with
shades of mix ofwelfarism), and communism are both perceived as
modernist projects of control over nature, etc.
| Feminists have revolted through calling 'modernist project',
modern
d d
development
l t projects
j t as ''white
hit CCaucasian
i men llocated
t d iin
the capitalist countries of the North' dominated projects.
97
POSITIVE ACHIEVEMENTS
| Could
C ld we h
have d done without
ith t modernism?
d i ?N No.
This modernism, its economic system as
capitalism and its political system as liberal
d
democracy ((with
ith its
it li
limitations),
it ti ) is
i th
the bbeginning
i i
of much radical transformations.
| It was necessary y to move away y from agrarian
g
systems, which are very closed and irrational
systems, with mind sets based on religious and
super-natural
super natural beliefs. On more scientific than
theological basis of knowledge.
98
49
ALTERNATIVE THEORIES
99
WHAT IS DEVELOPMENT
| Neo-classical economists would say y that development

p is economic
growth. That is, per capita increase in income (Per Capita Income
-PCI)
| How is income measured?
| Wages * Workers
| Production = Sum total of all production
It is assumed that with increase in income,

| people will have more resources at their command and that they
would consume more that would lead to utility and therefore
satisfaction.
| Income will give people command over resources that will lead to
people
peop e spe
spending
d g oon basic
bas c needs,
eeds, including
c ud g education,
educat o , health
ea t and
a d
housing.
| Income will increase the self-esteem and self-respect of the people
and which will also give satisfaction 100
50
ALTERNATIVE VIEW
| Economic
E i growth th or increase
i iin per capita
it iincome does
d nott
mean increase in welfare and improvement in either
quality of life or improvement in well being or improvement
in human capabilities.
capabilities
| Improvement in capabilities women as much as of men
| Development
p has to be viewed from only y one p
perspective
p
and that is development of people and not of things. That is
development takes place only when people's development
or human development takes place.
101
OTHER ALTERNATIVE CONCEPTS/ MEASUREMENTS OF DEVELOPMENT
| Social Statistics, Social Accounting and Social Reporting - These are

statistics on social aspects of development
| L
Levell off Living,
Li i Living
Li i standards
d d and d State
S off welfare
lf Index
I d -These
Th are
statistics that represent standard and level of living enjoyed by people,
represented by various consumption related indicators.
| Quality of Life - the quality of life people enjoyed in the context of
environmental pollution, deteriorating safety and security and declining
living standards. Quality of life concept also includes psychological factors
and individual perceptions. "How do you do?"
| PQLI (Ph
(Physical
i lQ Quality
lit off Life
Lif Index)
I d ) - This
Thi iis a Q
Quality
lit off life
lif Index
I d
referring to LEB, IMR and basic literacy - primarily meant to measure
poverty of developing countries.
| Social Progress Index -Genuine
Genuine Progress Index etc. - That is only positive
parameters of development are added to the income and negative
parameters are deducted. Therefore, expenditure incurred on military and
war would be deducted. Of violence, genocide, etc. would be deducted. Of
environmental degradation would be deducted.
deducted But,
But of care,
care affection,
affection etc.
etc
would be added.
It is important
p to know what gets
g added and what does not get
g added to 102
the
income. The debate between Lester Thurow and Robert Chambers.
51
HUMAN DEVELOPMENT
| Human
u a Development
eve op e t iss the
t epprocess
ocess oof eexpansion
pa s o oof cchoices
o ces in life.
e.
i.e. HD enhances capabilities of people that enables them to lead
the life they value (and want)
| HD is not just quality of life - It is a development paradigm
(approach), a development mode. It is not a static concept, but it
is a dynamic concept that refers to a development path that
ensures human development.
| Human development is a goal as well as a paradigm. Economic
Growth does not automatically get translated into human
development It needs an enabling environment
development. environment.
| In development theory, this is a new area that is being developed
by scholars.
103
HUMAN DEVELOPMENT INDEX (HDI)

( )
| This is a measurement of the choices available to

people through improvement in their capabilities.
(HDI) - A composite index of three basic human
capabilities:
biliti
i) Capability to lead a healthy life (LEB)
ii) Capability of enjoying knowledge (adult literacy
rate and average number of years of schooling, and
iii) Access to good standard of living: per capita income
104
52
GDI/ GEM
Gender Related Development Index (GDI):

- It is the HDI adjusted for gender equity. It measures the same basic
capabilities
in the context of gender inequity
Gender Empowerment Index (GEM):

- It measures women’s empowerment in the context of the same of the
men. It
I iis a composite
i iindex
d off
1. Women’s power over economic resources (share in per capita income)

2. Access to professional opportunities and participation in economic decision
making. ( % of women in technical, professional, managerial job)
3. Access to political decision making (% of women in the national
parliament)
li t)
105
OTHER INDICES OF UNDP
Capability Poverty Measure (CPM):

- A measure of the lack of three basic capabilities, a measure of human poverty
1. % of underweight children (under 5 years)

2 % of births unattended by trained personnel
2.
3. % of females illiterate
Human Poverty Index (HPI):

- A composite index of basic deprivations.
1. % of people not expected to survive to age 40 years

2 Adult Illiteracy Rate
2.
3. Deprivation of economic provisioning
- % of people without access to safe drinking water
- % of people without access to basic health services
- % of underweight children under five
106
53
Three Rules of Promotingg Social/Human Development

p
1. Enabling development path

- employment
l intensive
i i
- equitable
- environment friendly
2. Persistent direct efforts for decades

- Kerala and Gujarat (wide gap)
- Some Saurashtra districts
3. Synergies in policies/programmes
- literacy and health
(female literacy and IMR, MMR)
- environment and health/education 107
- capital and revenue expenditure
| This concept draws heavily from a very famous saying of

Gandhi: "There is enough in this world for every persons'
need but there is not enough in this world for even one
person's greed.
| Number of alternative development 'approaches, such as
small is beautiful (E.F. Schumacher), have this Gandhian
influence.
108
54
GENDER DEVELOPMENT
| If advances in welfare (utility)

(utility), education
education, health and general quality
of life, self-esteem and self-respect of women does not take place,
then, it is not development.
| Gender Analysis y is a Bi-focal view of society.
y It is believed that:
a) The development benefits are not equally shared between men
women. Men have benefited more from the modernist approach to
development. Hence, in all development indicators, women are behind
men. This is not a biological outcome but a social construct.
b) The development burdens also are not equally shared between
men and women. Women share more burdens of mal-development
th men. F
than For example,
l in
i ti
times off di
displacement
l t or environmental
i t l
degradation, it is women who suffer more than men.
109
GENDER INEQUALITY
| Whatt unites
Wh it countries
t i across many .cultural,
lt l
Religious, Ideological, Political and Economic
divides is their Common Cause Against Equality
off Women.
W
i) Right to travel
) g too marry
ii)Right a y
iii) Right to divorce
iv) Right to property and inheritance
v)) Right
Ri ht to
t acquire
i nationality
ti lit
vi) Seek employment
110
55
COMPARING HDI WITH GDI
HDI Values
GDI Values
111
INDICATOR VALUES IN GDI
112
56
SOME STATISTICS
| Estimated 1.3 billion people live in poverty in the world and 70%
of them are women.
women
| In South Asia and Sub-Saharan Africa, the men live longer than
women (longevity measured by LEB). In rest of the world, on an
average women live longer by five years than men
average, men.
| There are more than 100 million women missing in the world.
These missing women are mainly in China (FMR 940) and India
(FMR 933).
933) InI restt off the
th world,
ld iincluding
l di S Sub-
b Saharan
S h Africa
Af i
(1020), FMR is above 1000. This is indication of killing of women
or neglect of health of women so that women die.
| O off every three
Out h illiterate
illi in
i the
h world,ld two are women.
113
SOME STATISTICS – CONTD.

| Women earn less
W l than
th men.
a) In agriculture, women earn 3/4 that of men.
b)) In Bangladesh
g women earn 42% that of men. In USA
75%, in Vietnam 91.5% and in Sri Lanka 89.8%
| There is occupational segregation. Only 14% of the total
administrative and managerial jobs in the world are held
by women.
| vii) Only 5% of the multilateral banks' rural credit
reaches women allover the world
world. In India
India, only 11 % of the
borrowers of the major banks are women.
114
57
| Term Gender is a Social Construct. Terms men

and women indicate biological differences
between two sexes.
sexes But,
But the term gender
indicates social relationship between the two.
| Gender relationship has been such that in the
social relationship between men and women,
women are systematically subordinated. (Most
people do not want to believe this).
115
Gender Relations
Politico- Social and

economic Cultural System
y
system including Ethnic
& religious
Socially
Constructed
Relationship
Women Men
116
58
GENDER RELATIONS
| Men and Women perform distinct roles in society with respect to
th
three spheres
h off interaction
i t ti
i) Production sector
ii) Reproduction sector (Social reproduction sector)
iii) Community sector
| These distinct roles are performed because of the above
mentioned framework
| Gender inequality stems from gendered division of labour in the
above three mentioned fields.
| Mental labour is more valued than physical labour
| Most important labour is valued the least
| Productive labour is more valued than reproductive labour (What
p
is reproductive labour?))
117
| Why? Because development is economic growth and hence

economic activities that bring income are more valued than
activities that are of importance for ‘making of a human being’.
| Are there economic activities that do not bringg income? Manyy in
the developing countries. For example, subsistence agriculture.
Collection of water, fodder and fuel. And so on.
| Manv of the activities carried out by women are essentially
economic in nature but are not paid for and hence not considered
economic and by that the output of these activities do not get into
the national income statistics. Women performing these activities
are not considered workers and hence are not paid for and hence
also do not receive that respect/status.
respect/status
118
59
| Secondary
S d status
t t off women or unequall gender
d
relations are because of:
i) Socialisation process
ii)Religious sanction
iii) Unequal resource allocation in development
programmes
iv) Definition of what is value because of the definition
of development itself
119
WHY WOMEN (FEMINISTS) ARE CRITICAL OF

MODERNISATION PROCESS?
| Scientific
S i tifi k knowledge
l dg b
brought
ght control
t l off man over nature.
t
But, it indeed was man's control and not control of all
human beings.
| Women have not enjoyed as much loot of the nature as men
have as women's consumption of goods and services have
been much less than that of men. See any of the indicators.
| Modernisation brought mechanisation in some areas but in
many activities that women taken up, have not benefited
out of mechanisation. Classic example is agriculture. Also,
women are engaged in labour-intensive and low paid
activities
ti iti ini the
th manufacturing
f t i sector.t
120
60
| Modernisation has brought in expansion of capitalism

capitalism, which has
subjugated the countries of the South. This has led to increase in
inequality. Wherever overall inequalities have increased gender
inequalities have increased much more.
| Whenever there is deprivation, the burden of deprivation has been
passed on to the women. And modernisation has increased
deprivations in many parts of the world, mainly through the transfer
out of natural resources from the Third World to the First World
through various mechanisms. Capital and natural resources are
transferred out, directly during the colonial period and indirectly in
g trade rules and markets.
the current era through
| Modernisation has not reduced women's double burden, of productive
sector and reproductive sector responsibility.
121
| Modernisation has segregated productive and reproductive sectors of

the economy and relegated the reproductive sector to the secondary
position
iti as thi
this sector
t d does nott produce
d national
ti l iincome b
because off
the very definition of income and hence, women, who are
predominantly found in the reproductive sector are relegated to the
secondary' position.
secondary
| It has brought bureaucratisation and women not much literate are
unable to get through the bureaucratic labyrinth for benefiting form
p
development p
programmes
g and p policies.
| Modernisation has also pitted people against the people and in this
increased conflicts women suffer the most. Rape is used as a powerful
weapon during the ethnic conflicts to humiliate the other.
| Modernisation has adversely affected environment and women who
are more directly connected to the environment are worse sufferers.
122
61
| Gender inequality starts from the household sector or the domestic sector
and gets extended to other sectors.
| Modernisation brought separation of household reproduction sector from
economic production sector and that brought in sharp division of labour
b t
between men's
' work k and
d women's' work.
k
| Women being made solely responsible for reproductive sector (social
reproductive sector) of the society, found it hard to perform these dual
tasks.
tas s. Hence
e ce tthey
ey got further
u t e aand
d farther
a t e away fromo ttheepproductive
oduct ve
sectors, ones termed as productive sectors by the capitalist economy.
| The gender inequality is not only confined to the household and family,
but is also reproduced across a range of institutions, including
international donor agencies.
agencies the state and the market
market. Institutions
ensure the production, reinforcement and reproduction of social relations
and thereby social difference and social inequality.
123
| Institutions are framework of rules for achieving certain social or

economic-goals Organisations refer to the specific structural
economic-goals.
forms that the institutions take
| In the widely accepted definition of development, "a major section
of working women of the world disappear into a 'black
black hole
hole' in
economic theory." The planning interventions therefore do not
recognise and therefore value the non-market activities of the
women, which are otherwise of economic and social relevance but
are nott iimportant
t t off GDP/GNP estimates.
ti t
| In cities, there are no interventions to support these activities of
the women. On the contrary, planning tools, such as landuse
planning make clear distinction between work place and
residence place, emphasis on pricing of basic services, and so on.
124
62
| There is hierarchy of production and which influences and then

g
legitimizes resource allocation in a hierarchy.y
| Women are underrepresented in activities at the 'tip of the
iceberg', where development efforts and resources are
concentrated; they appear in large numbers in informal sector
andd subsistence
b i activities.
i ii Th
They are pre-dominant
d i ... in
i the
h
reproduction and activities (labour) nurturing of human life, the
neglected sectors in policy domain.
| Thi skewed
This k d representation
t ti demonstrates
d t t graphically
hi ll theth
convergence of power and ideas in the field of development.
| It ensures that women are positioned within the policy debate as
unproductive 'welfare'
welfare clients
clients, and that their claims on the
national development budget. based as they are on activities and
resources which are excluded from calculations of the GNP, are
rarelyy heard in debates over budgetary
g y allocations.
125
| Development theories and practice should start

from the vantage point of the poor women in the
Third World,
World taking their viewpoint as that from
the below.
| Thus,
Thus gender planning comes in as a new
concept.
126
63
WHAT IS GENDER PLANNING?

Planning is three things:
i) Policy
P li making
ki -whichhi h is
i a process off political
liti l ddecision
i i making
ki
about allocation of resources among various activities.
ii) Programme interventions - that is, the resource allocations are
converted into programmes through which the resources are
distributed. Government has a role in the process as the resources
come from the government.
iii) Implementation - the organisation of the process of
implementation, the administration of the programme, who
participates in it and so on.
A Gender Perspective is required in each of these three

activities.
127
i) Resource allocations do not consider women's needs. For example,

resources are not easily allocated for services that benefit women,
child care services
services, battered women
women'ss homes,
homes etc
etc. Why
Why, because
welfare is not economically productive, neo-classical economist's
perspective.
ii) Programmes do not consider women's
women s needs. For example,
transportation policy. Transport routes and schedules might totally
overlook women’s needs with respect to timing, security, location of
bus-stands, street furniture, etc. Other examples of missing women
are in
i th
the h
housing
i programmes, agricultural
i lt l programmes, and d so
on.
iii) Process of implementation exclude women. Most programmes
are designed by planners and where people do not participate and
hence the processes, like we discussed about the World Bank
projects, are not transparent. If there is some local participation
than women do not p participate
p and hence their needs gget
overlooked.
128
64
FIVE TYPES OF POLICIES

As far
A f as policies
li i are concerned, d there
th can be
b five
fi
types of policies:
i) gender-blind policies
ii) gender-neutral policies
iii) gender-aware
gender aware policies
iv) gender specific policies
v)) gender redistributive p
g policies
129
FIVE APPROACHES TO GENDER PLANNING
Within gender planning also, there are five approaches

b
basedd on what
h one llooks
k at rolel off women. These
h fi
five
approaches are:
i) Welfare approach – Where women are looked at as
mothers and their welfare is considered as society’s
welfare.
ii) Anti poverty approach – It argues for
Anti-poverty
increasing the productivity of poor as high poverty
leads to women engaging themselves in highly low
productive
d ti activities.
ti iti High povertyt among g women iis a
problem of under-development
130
65
iii) Efficiency approach - Argues that women's participation

brings efficiency. For example, at household level, women's
income benefit the household as they spend the same for
household welfare, for example on children's education and not on
alcoholism as men tend to spend.
i )
iv) E it approach
Equity h - Women
W should
h ld bbe equall recipients
i i t off
benefits in a development process. In other words, women should
equally benefit from a development process in a suitable manner.
v)) Empowerment
E approach h - Argues
A for
f empowering i women for f
greater self-reliance and self-esteem.
131
EXAMPLE OF DIFFERENT APPROACHES

Example of how different approaches lead to different arguments,
in say an environmental programme.
programme
i) Welfare approach - Women are altruistic (charitable) and work
without material gains for the welfare of the family. Natural
resource management,
management which has been traditionally been
women's responsibility, in whose honour women have rose from
time to time (Chipko movement, Greenbelt movement Kenya).
Hence women should be given this responsibility.
Hence, responsibility
ii) Anti-poverty approach - Removing poverty of the women would
remove poverty of the household and hence make free access to
natural resources such as the CPRs possible.
possible This will bring
income to women.
132
66
iii) Efficiency approach - Women are honest and hence will

give 'Best for the Buck'. Women are the efficient managers of the
atu a resources
natural esou ces and
a d hence
e ce g
give
ve them
t e tthiss responsibility
espo s b ty for
o
increasing efficiency of natural resource management
programmes. Land management in subsistence fanning is
women's responsibility and hence enhance these capabilities for
efficient land management.
management
iv) Equity approach - Women's equal participation should be
there in all programmes, such as energy programmes (including
nuclear energy programme).
programme)
v) Empowerment approach - Women's participation brings them
out of the households into the public sphere that empowers them
and they start demanding their well being and respect. Women
can then put their needs as priorities in public policy. Women can
get access to and control over assets and resources.
133
| Patriarchy is a system that systematically denies women access to

assets and resources through
g religious
g and social p
practices.
Notion of economic growth enhance & this process of denial.
| Women can be empowered only through changing the gender
relations. That their development in true sense would take place
when this rigid gender division of labour and all inequalities
emanating from that disappears.
| Gender planning is a new tradition,
tradition a new goal
goal, that is to ensure
that women, through empowering themselves, achieve equity and
equality with men.
134
67
GENDER SENSITIVE PLANNING IS THAT WHICH ENSURES:
i) adequate availability and accessibility of all basic services, that

wouldld include
i l d h housing,
i water
t supplyl andd sanitation,
it ti ttransportt
ii) right to employment at adequate wages, including vending and
living in the informal sector without being displaced,
iii) clean
l environment,
i t
iv) safety and security and availability of feminist services to
address the problem of violence against women,
v) availability of child care and other care facilities so that women are
empowered to participate equally in all the urban activities,
vi) democratic polity in true sense and not just token electoral
d
democracy, and
d
vii) creation of institutions of women's empowerment at all levels,
from private to public spheres.
135
| It is now mandatory that all development

programmes and projects are analysed with a
bifocal lense and that what would be the impact
of any of these programmes and projects on
women is observed.
136
68
GANDHIAN PHILOSOPHY
| Ga d was already
Gandhi a eady practising
p act s g alternative
a te at ve deve
development
op e t model
ode in
South Africa, through his 'Tolstoy farm in South Africa. Here, he
has also participated in anti-apartheid movement, issues of equal
rights.
g
| He was called a 'practical dreamer’ by his first biographer, Rev.
Joseph Doke
| Gandhi saw that the general people were not participating in the
Freedom movement. Only the Congress party and its workers
were active in a noticeable way. He had also noticed that even the
bearings of the Congress Party workers were not in the masses.
masses
137
| He ggave a call to his followers in Congress

g Party,
y, the Congress
g Partyy
workers, to go to the rural areas and mobilise the people for participating
in the Freedom Movement. Being a practical man, he suggested that the
best entry point to mobilise people for freedom struggle was to take up
g
constructive activities in the villages.
| The youth inspired by the call of Gandhi indeed went to the rural areas
and begun constructive development activities. (This practice is there
even today. Many NGOs undertake income-generation programmes or
education programmes to begin organising a community for political
action.)
| Gandhi had realised at that ‘independence’ did not mean political
p
independence alone but also economic independence
p from the imperial
p
global economic system. For India, it meant reconstruction of the entire
society that was poverty-stricken. Independence for India meant,
independence from poverty. Thus, for India, both, political and economic
p
independence had to g go together,
g , argued
g Gandhi.
| Population was concentrated in rural areas in India and so was the
poverty. He therefore asked his followers to go to the rural areas, where
people and poverty were concentrated and work for development
activities.
activities
138
69
GANDHIAN PHILOSOPHY
| Gandhi condemned the western civilization. He believed that it
dehumanised. He believed that the machines, which were for the purpose
of easing human burden and to increase production for satisfying
numerous human wants of the modem human beings "mutilated the
working man, cancelled out his body, conscripted only his hands".
Gandhi saw that the modem civilization would mean multiplication of
wants and moral impoverishment of man. He laid out his vision of Indian
society in his work Hind Swaraj, written in 1908.
| He expressed the opinion that the western civilization was irreligious
andd it had
h d ttaken
k hold
h ld on people
l in
i E
Europe. F
For hi
him civilization
i ili ti pointed
i t d
human beings to the path of duty and observance of morality and not to
the path of increased consumption and lack of morality. Gandhi's
condemnation of western civilization and with that of the
i d
industrialisation
i li i promoted d by
b western countries
i was a reactioni to
imperialism of the west. For him industrialisation and colonialism went
hand in hand.
139
| He expressed
H d the
th opinion
i i th thatt th
the western
t
civilization was irreligious and it had taken hold
on Europe. For him civilization pointed human
b i
beings to
t the
th pathth off d
duty
t and d observance
b off
morality and not to the path of increased
consumption and lack of morality. Gandhi’s
condemnation
d i off western civilization
i ili i and d with
ih
that of the industrialization promoted by western
countries was a reaction to imperialism of the
west. For hi
him, iindustrialization
d i li i and d colonialism
l i li
went hand in hand.
140
70
ECONOMIC VISION – VILLAGE MOVEMENT
| Gandhi did not believe that economics was a natural science. He

considered
id d it as morall science,
i which
hi h hhad
d tto d
do with
ith spiritual
i it l and
d
moral being and not just the rational, utilitarian human being.
| Gandhi’s economic programme for India was revival of the village
economy He stated that the economic vision for a thickly
economy.
populated country such as India had to be different than that for
thinly populated countries such as the United States. He saw that
y way
the only y to bring
g good
g living
g to the p
people
p in rural India was
to make rural areas central piece in economic programme.
| Gandhi saw urbanization as a process that sponged on the rural
areas.
141
| He promoted the idea of 'Bread Labour', idea that he had borrowed from
Tolstoy. It means living by one's own hands. He believed that: (i) the life
of labour, that is that of the tiller and handicraftsman was only life
worth living;
wo v g; (ii)
( ) there
e e has
as too bee eq
equal
a value
va e for
o aall types
ypes oof labour
a o
(lawyer, barber, etc.) and (iii) good of individual is contained in the good
of all.
| By this, he strongly disagreed and discouraged the idea of hierarchy in
the division of labour
labour. His emphasis was to create employment for all in
the rural areas through home/hand production, which is also
decentralized production that would employ unemployed rural labour.
Small products would get absorbed in the rural economy itself and
th b increase
thereby i employment
l t as well
ll as demand
d d att th
the village
ill llevel.
l
| Gandhi was in search of practical means of alleviating India's
wretchedness and misery. Charkha and Khadi programme became the
y
symbols of this p
practical p
programme.
g He introduced spinning
p g as a basic
programme. He believed that every one had to spin, that is every one had
to be engaged in the activities of production of basic necessities. Only
then there would be real home rule or independence, he said.
142
71
| He said that the problem for India was how to employ

the hands that remained idle for about six months in a
year and part of the working day. Charkha became a
symbol of subsidiary economic activity at the village
level.
level
| After independence, Gandhians influenced the
Government of India (GOI) to set up Khadi and Village
I d t i Commission
Industries C i i (KVIC),
(KVIC) an organisation
i ti for f
promoting employment among rural weavers and
artisans. The KVIC provided grants for setting up
mainly
i l units/infrastructure
i /i f ffor h
home-based
b d ((also
l called
ll d
cottage industry) production.
143
PEACE AND NON-VIOLENCE
| Gandhi believed that any good end could not have a wrong means;
cruelty
lt and
d blood
bl d bath
b th involved
i l d in
i the
th violent
i l t means cannott
achieve fair social order and means are as important as goals.
Any struggle to be fought therefore had to be through peaceful
means in which persistence of truth (Satyagraha) was seen as a
main weapon.
| He viewed the caste-ridden Indian society as one perpetrating
violence on the lower social strata. A non-violent social order was
such that would be non-violent on the lower social strata. He
asked for a total social transformation to achieve peaceful and
non-violent society and means for such a struggle were also
promoted to be peaceful.
peaceful
144
72
TRUTH
| Gandhi considered truth as the most powerful
but also a most difficult weapon in the fight for
justice He believed that only the fearless could
justice.
use this weapon.
145
SARVODAYA
| Sarvodaya is Gandhian way to welfare economics. It means
welfare of all
all, which does not happen if the welfare of the last
strata does not take place. Sarvodaya is a comprehensive vision of
Indian society, a village level movement and building of society
from below. It is not a utilitarian approach but a moral approach.
I iincludes
It l d iindividual
di id l as wellll as collective
ll i and d encompasses all
ll
dimensions of social existence and not only economic.
| He argued that it is more important to have allegiance to the
d ti th
duties than th
the rights
i ht if Sarvodaya
S d h d to
had t b
be achieved.
hi d Thi
This
means that sacrifice is important dimension of human practice.
Fearlessness, sacrifice and truth are the three ways to achieve
Sarvodaya.
| Lastly, such a world order was non-competitive and humane,
which was based on absolute acceptance of purity of means of
achieving g noble ends and not on conflicts and exploitation.
p
146
73
ANTYODAYA
| Antyoday means the development of the person
who is last in the social and economic hierarchy.
Any development that did not reach this last
stratum of society was not development according
to Gandhi.
147
SELF-GOVERNANCE ((SWARAJ)
| Gandhi's concept of democracy was self-governance. This was democracy

off the masses and not electoral democracy as we visualise now.
| Ideally, self-government would mean no State in which every one's
opinion and interests mattered and not only of the majority and that
could be installed only through consensus and negotiations
negotiations. He said that
the democracy practiced in the world was electoral democracy, which is
the rule of the majority that coerced minority to accept the decisions of
the majority. However, till such a democracy was installed, in the
interim period,
period one could do with a democracy in which the government
was elected by the majority.
| He gave Swaraj (self-rule) as his political programme and Panchayati
Raj as programme for governance. In place of the State and its
i i i
institutions h
he canvassed
d that
h theh village
ill level
l l institutions,
i i i such
h as the
h
Panchayats would address the issues of governance.
148
74
VOLUNTEERISM
| He believed
H b li d th
thatt th
the ttrue d
democracy could
ld only
l
be built from the grassroots, through voluntary
efforts
e o sa and moral
o a a authority.
o y. Co
Community y
development activities therefore have been
always visualised as voluntary activities in India,
especially for those who come from Gandhian
ideology. This practice gave currency to the term
'voluntary organisations' whose mandate was
development activities with community support.
149
NEW EDUCATION (NAI TALIM)
| Gandhi believed that education is the basic tool for the development
off consciousness
i and
d reconstitution
tit ti off society
i t and d therefore
th f an
important tool of social change. Also, education was for livelihood and
for becoming a good person. He argued that Education was not for
bringing in a new Brahminical order. He believed that the education
in India had alienated the educated people from their society and
these people did not give back to the society what society had given
them.
| His New Education (Nai Talim) was woven around the work so that
the cost of education can be taken care by remunerative work.
Education consisted of imparting skills, along with promoting
capability to read
read, write and count
count. This he called basic education.
education He
said that basic education and bread labour would bring equality
between rural and urban areas and between different classes of
y
society.
150
75
TRUSTEESHIP
| Gandhi himself denied property for himself, but did not come out fully
against private property and capitalist accumulation
accumulation. Nor did it consider
it wrong to increase wealth through productive activities. But, instead of
holding that wealth privately, he suggested that it should be managed by
the capitalists who should consider themselves as the trustees of the
property
t createdt dbby llabour.
b IIncrease iin wealth
lth b
by the
th capitalists
it li t was to
t
be not for their own sake but for the sake of the nation.
| Similarly, he believed that the landlords were the trustees of a the land
gp
for the tilling peasants and therefore he did not emphasise
p much on land
reforms. This concept of trusteeship evolved from his deep religious
conviction that everything belonged to God and human beings could hold
property or talent only as the trustee of God.
| This principle of trusteeship was imbibed in the Trade Union movement.
movement
First such trade union was started by Gandhi in Ahmedabad in 1918 and
this was called Textile Labour Association (TLA). This was in a way a
non-violent method of conflict resolution.
151
New blood joins this earth

And q
quickly
y he's subdued
Forgive me Through constant pained disgrace
Forgive me not The young boy learns their rules
Forgive me
Forgive me not With time the child draws in
Forgive me This whipping boy done wrong
Forgive me not Deprived of all his thoughts
Forgive me The young man strugggles on and on he's known
Forgive me A vow unto his own
Why can't I forgive me? That never from this day
His will they'll take away-eay
Set sail to sea

But pulled off course
Lay beside me, tell me what they've done
By the light of golden treasure
Speak the words I want to hear, to make my demons run
The door is locked now, but it's open if you're true
How could he know
If you can understand the me,
me than I can understand the you.
you
This new dawn's light
Would change his life forever?
How can I be lost,

If I've got nowhere to go?
Search for seas of ggold
How come it's got so cold?
How can I be lost?

In remembrance I relive
So how can I blame you
When it's
it s me I can
can'tt forgive?
152
76
Perspectives
NURM and the Poor The NURM would cover 60 cities: seven
category A or mega cities, 28 category B
or other metro cities and remaining the 25
in Globalising Mega Cities of the 28 listed in category C as urban

agglomerations (UAs) with less than one
million population. The prime minister of
India, on the launch of this first major
The central government’s National Urban Renewal Mission is urban development programme of the
expected to convert select cities into “world class” urban central government, stated that the NURM
centres. The submission for basic services that falls under the was in line with the national common
minimum programme (CMP).2
NURM would benefit the poor only if they have security of Rationale: The rationale for the mission
tenure and their settlements and dwelling units get connected to is based on the expectation that overall
these networks. The land question is central to making reforms would lead to high economic
affordable housing available for the poor. Since the growth and to a higher rate of urbanisation
(40 per cent by 2021). Cities thus covered
mission does not address this question, how would a city would in turn act as “growth engines” for
become world class without reaching out to half its population? the entire economy and urban areas would
The mission will instead encourage processes that would displace contribute 65 per cent of the total gross
the poor, rather than include them in the process of city domestic product (GDP). For all this to
happen, infrastructure services such as
transformation. power, telecom, roads, water supply and
mass transportation, along with civic infra-
DARSHINI MAHADEVIA 2005. Demolitions continue. In Delhi, structure, such as sanitation and solid waste
27,000 families in the Yamuna Pushta area management in the cities have to improve.
T
he Jawaharlal Nehru National Ur- and about 1,00,000 families all over the NURM is to begin with select cities, where
ban Renewal Mission (JNNURM – city were evicted from slums in last eight investments would be increased in the next
henceforth NURM) is expected to years. Those rehabilitated have been shifted seven years, starting from year 2005-06.
convert select cities into “world class” far away on unserviced plots, given on a Since the cities and state governments are
ones. The term “world class” is now being five to 10-year lease.1 In Ahmedabad city, not able to do so on their own, the central
used more as a paradigm for urban devel- the Sabarmati Riverfront Development government will step in with financial
opment, signifying cities with international (SRFD) scheme will displace 30,000 support.
standard infrastructure, particularly roads, households. Four thousand households The other stated rationale is to achieve
airports, public transport, open spaces, and have been offered rehabilitation in the targets of the Millennium Develop-
real estate projects. A large amount of 20 sq yard apartment units, along with a ment Goals (MDGs) in these cities – with
funds, in a relative sense, have been com- loan of Rs 60,000, in a location not clearly five of the eight MDGs on poverty, health
mitted for this mission. In itself, such a stated. A hundred thousand homeless and gender equality being addressed. The
transformation of a city is not disagree- people in Delhi were in dire conditions in unstated rationale is to force state govern-
able, if it would benefit all or benefit some the winter of 2005-06, inviting attention ments to implement urban sector reforms
and not adversely affect others. But, given from the National Human Rights Com- more seriously than before, which was not
the trend of displacement of the poor in mission (NHRC). possible through the City Challenge Fund
the last decade, particularly from the mega This article asks the question as to (CCF) and Urban Reform Initiative Fund
cities, it is necessary to take a closer look whether the NURM would address the (URIF). Lastly, if it is not a mission then
at the NURM. burning issue of the urban poor’s access no programme gets implemented.
The reality of Indian mega and large to shelter and basic services (as without Components: The NURM has two sub-
cities over the last decade has been: forced shelter, access to basic services is not missions: (a) Submission for Urban Infra-
evictions of slums, hawker removal, possible). Is this the right question to ask, structure and Governance (UIG), which
removal of “unwanted economic activities” given that NURM is supposed to convert will be administered by the ministry of
such as banning of dancing in beer bars, mega and large cities into “world class urban development (MUD), and (b) Sub-
displacement of poor through infrastruc- cities” and not necessarily serve the poor? mission for Basic Services to the Urban
ture projects and speculative property This question, however, is relevant given Poor (BSUP), which will be administered
markets, and displacement because of that a very large section of urban residents, by the ministry of urban employment and
environmental hazards and political vio- poor and non-poor, continue to live in sub- poverty alleviation (MUEPA).3 Projects
lence. For example, in Mumbai, 90,000 standard housing with very poor access such as road and associated infrastructure,
to 94,000 slum units were demolished to basic services and the NURM has a public transport, trunk networks of water
between November 2004 and January submission for the urban poor. supply, sanitation and storm water drains,
Economic and Political Weekly August 5, 2006 3399

parking lots and city beautification, would government funds would be hosted in a for BSUP submission. For the next two
be taken up under the UIG. For those state level nodal agency, which can be an categories of urban centres, the central
related to slum improvement – shelter existing agency or a new agency, as grants- government grant contribution remains the
and all basic services – and enhancing in-aid, part of which would be treated as same for both the submissions. For the
access of urban poor to other social ser- revolving fund – 25 per cent for the UIG BSUP submission, the only change from
vices, the BSUP submission would be projects and 10 per cent for the BSUP Table 2 is that the state government’s grant
tapped into. projects. At the end of the mission period, contribution is taken away and the state
The NURM will be implemented first, the revolving fund may be upgraded to a government, ULBs, parastatals and ben-
by formulating a city development plan state level urban infrastructure fund. For eficiary contributions make up the rest of
(CDP) indicating policies, programmes and the identified projects, funds would be the financial requirements. Thus, in cities
strategies, and financing, followed by the disbursed to the ULBs/parastatals as soft with one to four million, in UIG, grants
preparation of detailed project reports loans or grant-cum-loans or grants. The would be 70 per cent whereas in BSUP,
(DPRs) for the identified projects by urban ULB/parastatal has to get the rest of the grants would be 50 per cent; in NE states
local bodies (ULBs)/parastatal agencies. funds, for which it can seek private sector and J and K, grants for UIG would be 100
Each project would have its life cycle costs participation or borrow from the market per cent and for BSUP would be 90 per
– capital outlays and attendant operation and/or financial institution. cent and lastly for all other non-metro UA,
and maintenance (O&M) costs to ensure It is expected that Rs 17,219.5 crore per grants for UIG would be 90 per cent and
that assets are in good working condition year (Table 1), that is Rs 1,20,536 crore that for BSUP, 80 per cent. In essence, in
– recovered. Project preparation, evalua- over the seven-year period, would be in- all except the mega cities, the UIG sub-
tion, capacity building, etc, would be done vested in the cities, of which Rs 50,000 mission has a higher grant component than
by empanelled consultants listed by the crore over the whole period, or Rs 7,698 the BSUP submission!
central ministry of urban development. crore per year, would come through central Conditions: The most contentious part of
Detailed guidelines for CDP, project prepa- government assistance. the NURM is the conditions/prerequisites
ration, etc, are also made available. For mega cities, the central grant con- for accessing central funds. There are a set
Finances: It is expected that central finan- tribution would be 35 per cent of the total of mandatory reforms for the ULBs/
cial assistance would leverage additional project cost in case of the UIG submission parastatals and for the state governments,
funds for the projects. Central and state (Table 2) and would go up to 50 per cent and there are a set of optional reforms,
A Centre of Excellence in Local Governance
International Course on Decentralised Governance

and Poverty Alleviation
10-14 September 2006
Kerala Institute of Local Administration (KILA) announces its 20th International Course on Decentralised Governance
and Poverty Alleviation during 10-14 September 2006.
Course will mainly cover the following topics combined with presentation and field exposure:
• Decentralised governance
• Decentralisation and social capital formation
• Pro-poor strategy in participatory planning
• Social accountability and decentralization for Good Governance
• Kerala experience on decentralized governance
• Field exposure to Panchayat Raj Institutions
Participants:
Elected representatives, officials, administrators, policy-makers, academics, faculty members of training institutes, social
activists and NGOs can participate in this programme.
Course fee: Rs. 7,500 – Participants from India
US$ 350 – Participants from outside India.
For details Contact: Dr. Abey George, Course Director

abey@kilaonline.org
Or write to:
Dr. P. P. Balan
Director, KILA
3400 Economic and Political Weekly August 5, 2006

to be accomplished during the mission (LIG) categories with a system of cross which affordable land can be made available
period. subsidisation; and (c) introduction of to the urban poor. People’s movements for
Some of the mandatory reforms at the computerised process of registration of land housing rights have now begun asking for
ULB/parastatal level are: (a) adoption of and property. the strengthening of ULCRA rather than
modern accrual-based double entry sys- its repeal. If it does get repealed, we would
tem of accounting; (b) reform of property NURM and the Urban Poor be back at the pre-1976 situation in this
tax with tax collection efficiency to reach area, that is the prevailing scenario before
at least 85 per cent within the next seven NURM is the first comprehensive mis- the UN Habitat Conference held in
years; (c) levy of reasonable user charges sion for urban renewal, albeit in select Vancouver. If the land tenure issue does
with the objective of full cost recovery of cities, which is in line with the ongoing not get addressed, which is the case with
O&M or recurring costs; (d) internal ear- changes in mega cities particularly, and for nearly half the population in the megacities,
marking, within local bodies, budgets for which they have been clamouring for funds. their access to basic services would also
basic services to the urban poor; and It is a realisation that cities would not be not get addressed. In that case, the BSUP
(e) provision of basic services to the urban able to undertake this renewal on their own, sub-mission may not help the poor much.
poor including security of tenure at afford- given the Indian system of vertical fiscal The second important concern is that the
able prices, improved housing, water imbalance. The mission, if the funds were CDPs are to be framed by consultancy
supply and sanitation. made available from the central government firms, without any public debates. CDPs
Some of the mandatory reforms at the as promised, would certainly change parts would not be people’s plans, when there
state level are: (a) Implementation of of some cities (not whole cities). There are is indeed a dire need to democratise urban
decentralisation measures as envisaged in doubts whether the central government plan-making and development processes.
74th Constitutional Amendment Act would get an additional Rs 7,698 crore per One does not have an issue with the NURM
(CAA); (b) repeal of Urban Land Ceiling year on top of its annual planned outlays benefiting consultancy firms, but their
and Regulation Act (ULCRA);4 (c) reform for the two ministries concerned. documents may not be covered under the
of rent control laws, balancing the interests For the urban poor, besides the BSUP Right to Information (RIF) Act. Thus, while
of landlords and tenants; (d) rationalisation submission, two mandatory reforms for the city master/development plans could
of stamp duty to bring it down to no more the ULBs/parastatals are important; be available for public scrutiny, CDPs may
than 5 per cent; (e) enactment of the public (i) internal earmarking within local not be. In that case, even if implementation
disclosure law to ensure preparation of the bodies’ budgets for basic services to the of the 74th CAA has been made manda-
medium-term fiscal plans of ULBs/ urban poor; and (ii) provision of basic tory, it might be so just for the purpose
parastatals and the release of quarterly per- services to the urban poor including of cost recovery for the NURM and other
formance information to all stakeholders. security of tenure at affordable prices, etc. projects and not for deciding city deve-
The important optional reforms expected While the former may be achievable, it is lopment priorities, which would be de-
to be undertaken by ULBs/parastatals and not clear how the latter would be achieved, cided by consultants. There is also no idea
state governments are: (a) simplification particularly, as there is no mention of how as to how the RIF Act and Public Dis-
of legal and procedural frameworks for land prices would be made affordable. closure Law would work in coordination.
conversion of land from agricultural to Certainly, the market is not expected to do Further, is it not ironical that the 74th
non-agricultural purposes; (b) earmarking so, as envisaged under the mission through CAA has not yet been fully adopted by
at least 20-25 per cent of developed land the repeal of ULCRA. state governments and that this has to be
in all housing projects (both public and In fact, the repeal of ULCRA is the first made into a mandatory requirement for the
private agencies) for economically weaker major concern. With its repeal, theoreti- NURM? The situation indicates the lack
sections (EWS) and low income group cally there is no other instrument through of interest on part of the state governments
Table 1: Investment Requirements for NURM to decentralise power on one hand and a
(in rupees crore) streak of non-transparency on the other.
Category Number of Investment Requirement Annual Funds
This is how most new projects on urban
Cities (Over Seven Years) Requirement renewal are being implemented in the cities.
Citizens do not know that their local
Cities with over four million population 7 57,143 8163.3
Cities with one to four million population 28 57,143 8163.3
governments are borrowing, and may be
Selected cities with < 1 million population* 28 6,250 892.9 mismanaging such funds, and they are then
Total 63 120,536 17219.5 suddenly confronted with the reality of
Note: * Of this only 25 would be taken, as the total cities to be covered would not exceed 60. increased charges and taxes.
Source : From the preface of NURM. Citizens also do not know that inter-
national funding institutions such as the
Table 2: Contribution by Different State Agencies for UIG Submission World Bank, the USAID, and the ADB are
(in per cent) assisting their governments to “reform”
Category of Cities/Towns/UAs Grant ULB/Parastatal and what conditionalities such a reform
Centre State Share process bring. In a democratic country such
Cities/UAs with four million population 35 15 50 as India, these financial institutions would
Cities with one to four million population 50 20 30 demand the state and local governments
Cities/towns/UAs in north-eastern (NE) states and J and K 90 10 0 to “reform”? It is known that these financial
Cities/UAs other than those mentioned above 80 10 10
institutions are more interested in recover-
Source: From guidelines for the Submission for Urban Infrastructure and Governance. ing their funds and are thus only asking

for such reforms, for their mandate governments. For example, Ahmedabad’s submission and other infrastructure projects
would not permit them to demand CDP states that the city would spents 16.6 would benefit the urban poor only if they
political reforms. per cent on roads and bridges; 20.1 per cent have security of tenure and their settle-
The most important fear is that the NURM on storm water drains and sewerage;12.7 ments and dwelling units get connected to
would lead to more slum demolitions and per cent on housing and slums; 30.8 per these networks. Attaching the name of the
displacement, as we have seen happening cent on other projects, most likely to be first prime minister of India, Jawaharlal
across cities. This might especially happen city beautification projects; 6.41 per cent Nehru, does not automatically make the
when the relocation and rehabilitation on water supply, 7.44 per cent on social mission pro-poor.
tasks of project affected people are ex- services, just 1.03 per cent on solid NURM might well turn out to be a mission
tremely complicated, in an Indian society waste management; 3.66 per cent on for improving a certain type of infra-
that tends to be highly fragmented and city management and the rest on other structure, which is being demanded by the
corrupt. This along with an official policy activities, of the total Rs 3,900 crore of business class and middle class lobbies in
of non-recognition of slum dwellers who projects proposed over the seven-year the mega and large cities. It will certainly
are squatting or living in unauthorised period.5 Some cities, such as Mumbai expedite the process of transforming the
settlements would make the situation more and Bangalore might just spend on 60 large cities into “world class cities”,
precarious. road and transport projects. In fact, more by encouraging processes that
Land costs are not to be covered in Bangalore Municipal Corporation has would displace the poor from them. This
project costs. How would the city govern- been spending more than half its budget has been witnessed since last 20 years, the
ments make land available? Most likely by on such projects in the last few years poor have been displaced rather than
freeing lands from the slums. Lands would since water supply and sanitation are actively included in the process of city
also be required for raising financial re- provided by a parastatal, which has now transformation. EPW
sources. Earmarking at least 20-25 per cent moved towards privatisation, assisted by
of developed land in all housing projects the USAID. Email: d_mahadevia@yahoo.com
has been suggested as an optional reform Further, in the proposed budget for
and hence, the state and city governments 2006-07, the Ahmedabad Municipal Notes
have no tool at their disposal to make lands Corporation’s capital budget has increased [Based on discussions held at a workshop titled
available for the housing of the urban poor. by 179 per cent to Rs 8506 crore from ‘Right to Shelter and Basic Services in Global-
In states where urban planning is done Rs 305 crore in the previous year, because ising Mega Cities of India’, in Ahmedabad on
through town planning schemes there is of the NURM. Further, 47.9 per cent would February 10, 2006, under the Indo-Dutch Project
on Alternatives in Development (IDPAD), jointly
such a provision but it has never been made be spent on city level basic infrastructure organised by Centre for Development Alternatives
use of. Land and property costs are spi- such as water supply, sewerage and (CFDA) and Institute of Social Studies (ISS), The
ralling. Given that a large proportion of storm water drains, whereas a whopping Hague, the two project partners of a research
the urban population, even in mega cities, 37.6 per cent would be spent on road project titled ‘Inclusive Mega Cities in Asia in a
still works at low wages in the informal projects such as widening, flyover con- Globalising World’.]
sector, it would not be possible for this struction and making of footpaths. It is 1 From a presentation made by Lalit Batra
section to buy a formal house from the likely that most NURM cities would come of Hazards Centre, New Delhi titled ‘Trajectory
of Urban Change in Neo-liberal India: The
market. This indeed is the reason that they up with such priorities. It is likely that the Case of Delhi’, on February 10, 2006 at this
have resorted to living in slums and will selection of projects would be susceptible workshop.
continue to do so. to the working of pressure lobbies such as 2 http://pmindia.nic.in/speech/content.asp?id=235.
The land question is central to making the IT lobby in Bangalore and the Bombay 3 For the details of the mission, sectors and projects
affordable housing available to the poor First and middle income households eligible for funding under both the submissions,
and mandatory and optional reforms see: http://
along with other facilitative mechanisms organised under resident welfare urbanindia.nic.in/moud/programme/ud/
such as microcredit and affordable basic associations. jnnurm.htm.
services provision. Since this question is Summing up, the problems that the urban 4 In respect of people-oriented schemes relating
not to be addressed by this mission, how poor are facing in the mega cities of India to water supply and sanitation, UCLR Act repeal
would a city become a “world class today, mainly the lack of shelter with a and reform of rent control laws may be taken
as optional reform.
city”, without reaching out to half of its secured land title and access to basic 5 Based on data from Gujarat Samachar,
population? services at affordable costs, do not get February 4, 2006.
Would conditions attached to NURM addressed by the NURM. The BSUP 6 Ibid.
funding deter state governments from
accessing central funds? Newspaper re-
ports suggest that the major metros, in Back Volumes
particular, are quite enthusiastic about
NURM and many states have already Back Volumes of Economic and Political Weekly from 1976 to 2005 are
prepared CDPs for the cities covered under available in unbound form.
the mission. It is likely that not all the cities
listed would be covered and only those Write to:
with the capability to raise their own Circulation Department, Economic and Political Weekly
resources would come forward. Hitkari House, 284 Shahid Bhagat Singh Road,
There is also concern about the type of Mumbai 400 001.
projects selected by the city and state

NURM Pani
http://economictimes.indiatimes.com/articleshow/1516810.cms
Dressing up the urban crisis

NARENDAR PANI
[ FRIDAY, MAY 05, 2006 12:25:20 AM]
The vision underlying the National Urban Renewal Mission could result in a huge
expenditure on under-utilised infrastructure, even as access to basic services gets more
difficult and urban taxes increase inequity.
One of the pitfalls of policy making in a crisis is that the dire situation tempts us to
uncritically accept virtually any response. This is perhaps nowhere more true than in the
case of the Jawaharlal Nehru National Urban Renewal Mission.
There is no doubt that the infrastructure in most of our major cities is under severe strain.
There is then great relief that the government is willing to pump in huge sums of money
to address this challenge. And under the barrage of projects worth thousands of crores of
rupees, there is little scope for a critical analysis of whether this is the most efficient
response to the crisis. In the process we could be left cheering a Mission that is actually
making the situation worse.
The Mission itself does not go beyond a simple, popular notion of the urban challenge. In
essence, the argument is that liberalisation will cause a huge spurt in urbanisation,
leading to a greater demand for urban infrastructure. This demand can only be met by
huge, expensive projects. While the government can contribute to the setting up of these
projects, they have to run themselves. The users must then be made to pay the costs of
operation and maintenance. And if the cities have to contribute they must raise local
resources, particularly property taxes.
The trouble is that this popular notion is based on fudging a number of less convenient
facts on the ground. The very contention that liberalisation will lead to a rapid spurt in
urbanisation is not as clear-cut as it seems. The National Urban Renewal Mission insists
that the proportion of urban population will rise from less than 28% of the population in
the 2001 census to 40% by 2021 as a result of liberalisation. But in the first decade of
liberalisation, from 1991 to 2001 the proportion only increased by around two percentage
points, from just a little less than 26% in 1991.
It is then by no means certain that the rate of urbanisation will be trebled over the two
decades following 2001. Indeed, given the fact that economic growth in cities like
Bangalore or Hyderabad is more linked to foreign markets than it is to the hinterland, the
growth may well be more in terms of the expensive elements of urbanisation rather than
the number of people involved.
The tendency to exaggerate size influences the choice of projects as well. Nothing less
than systems that deal with much larger numbers, in the largest cities in the world, will
do. These symbols of development have to be introduced regardless of cost. The
experience of Delhi and Kolkata may show that the people using the metros are much
less than estimated, but that will not stop urban policy makers, as well as the popular
mind, from believing that these are essential for urban development.
The preference for large glamorous symbols of development also diverts attention from
the specific requirements of infrastructure that the economic development of each city
needs. An Information Technology led industrial growth for a city would generate a
demand for an infrastructure that emphasises telecommunication. On the other hand, a
garment industry led growth would emphasise other more rudimentary infrastructure on a
much larger scale. These nuances will only be understood if there is a critical place for
the economic impulses in each city.
Since the Mission has no significant place for local economic impulses, it can at best
offer standardised infrastructure for all cities. There is then the very distinct possibility of
expensive infrastructure not being fully utilised since it is not consistent with the
direction in which the local urban economy is moving.
The only check that a market economy would put on such projects is that sooner or later
they will be seen to be economically unviable. But one of the major objectives of the
National Urban Renewal Mission is to offer assistance to ensure such a stage is never
reached. Apart from the usual assistance to enhance the bankability of long-gestation
infrastructure projects as well as to enhance resource availability, the Mission will also
fill the viability gap of projects. In other words, once the Mission decides a particular
project is essential, it can put in any amount of public resources to make an unviable
project viable.
This unchallenged right to throw good public money after unviable projects necessarily
constrains the resources available to the urban sector. This increases the pressure to raise
user charges on basic services. While there is undoubtedly a need to ensure that prices are
used to prevent the misuse and wastage of scarce resources like water, a situation cannot
also be created where urban citizens cannot afford basic services. The Mission’s response
is to create a sub-Mission to provide basic services to the poor.
These projects will typically focus on slums. But often, particularly when the poor
migrate to the cities, they settle into clusters of huts that are not recognised as slums,
thereby keeping them away from these benefits. And there is also the challenge of
meeting the needs of those who are not below the poverty line but are not rich enough to
be unaffected by spiralling prices of essentials like water.
The possible inadequacies of user charges has contributed to the National Urban Renewal
Mission looking for other urban sources of revenue, with property tax being a prime
target. But here again the effort could be hurt by a lack of sensitivity to local economic
impulses. The real economic growth in a city like Bangalore has been occurring around
the IT industry on its periphery. But since the general tendency in property tax is to place
a premium on the city centre, there is a real possibility of this tax being iniquitous.
The vision underlying the Jawaharlal Nehru National Urban Renewal Mission could thus
very easily result in a huge expenditure on under-utilised infrastructure, even as access to
basic services gets more difficult and urban taxes increase inequity. In other words,
existing urban problems can get worse even as they are hidden behind expensive
infrastructure projects.
Perspectives
Whither Urban Renewal? Thus, if one thought that urbanisation in
India is producing problems, the real big
wave is yet to hit, and our cities are as
yet unprepared for this eventuality.
The Jawaharlal Nehru National Urban Renewal Mission is an There are two ways of responding to
ambitious programme to build infrastructure in India’s cities and this. One is to try and stop it from hap-
pening (or at least slow it down – which
towns. However, the mission does not sufficiently recognise that has been the policy of government so
the core urban deficit is not the lack of infrastructure but the lack far).3 The other is to accept that “our
of local self-governance. urban economy has become an important
driver of economic growth [and]…the
PARTHA MUKHOPADHYAY e g, cities like Jamshedpur and Gangtok, bridge between the domestic economy and
listed as eligible for JNNURM, do not yet the global economy” and that “urbanisation
T
he common minimum programme have elected local bodies, which is a pre- is a relentless process, which has come to
(CMP) committed the UPA govern- condition for eligibility. stay and has to be factored into all our
ment to “a comprehensive pro- Over the next seven years, a major developmental thinking and development
gramme of urban renewal and to a massive portion of the outlay on JNNURM will be processes”4 and prepare to manage the
expansion of social housing in towns and in the form of central grants. Two ques- consequences. One should also recognise
cities, paying particular attention to the tions arise in this context. First, do we that Indian cities grow because they have
needs of slum dwellers”.1 In apparent really need to focus national resources on poor people, who lubricate and drive urban
pursuance of this objective, the govern- our cities and second, if so, is JNNURM growth and also keep it manageable and
ment of India launched the Jawaharlal the right way of focusing it? relatively inexpensive. Over 81 per cent
Nehru National Urban Renewal Mission of urban male slum dwellers are literate
(JNNURM) on December 3, 2005. Characteristics of as compared to 86 per cent of all urban
JNNURM aims to create “economically Indian Urbanisation residents and about three-fourths of them
productive, efficient, equitable and respon- are workers compared to about two-thirds
sive cities” by focusing on “(i) improving Over 1991-2001, our urban population of all residents. Further, there are strong
and augmenting the economic and social rose by about 68 million, to 284 million links between rural and urban incomes
infrastructure of cities; (ii) ensuring basic (see the table). Of this, only 20 million that go beyond remittances. Rao et al (2004)
services to the urban poor including was migration from rural areas. The con- shows how urbanisation enhances and
security of tenure at affordable prices; trast with China, where migration accounts stabilises agricultural incomes by provid-
(iii) initiating wide-ranging urban sector for 90 per cent of the increase, is striking. ing a market for diversified agricultural
reforms whose primary aim is to eliminate Global experience indicates that rapid production. It can also raise income for
legal, institutional and financial constraints economic growth results in agglomera- rural labour, e g, the ratio of wage income
that have impeded investment in urban tions with large populations and high levels to total income for Chinese farmers has
infrastructure and services; and (iv) strength- of poverty. So, if growth is to continue risen from 13.2 per cent in 1985 to 30.4
ening municipal governments and their at the current high levels, India will have per cent in 2001 [Angang et al 2003]. This
functioning in accordance with the pro- to learn to live with many “big and poor requires attention to local transport links
visions of the Constitution (seventy-fourth) cities”. These will be resource intensive, and, over time, investment in rural edu-
Amendment Act, 1992”.2 It is divided into as all big metropolises are, but even more cation, beyond simple literacy (79 per cent
two submissions, one for urban infra- so since they will lack the ameliorative of rural literates have a sub-secondary
structure and governance and other for concerns for environment that tend to education, compared to only 58 per cent
basic services to the urban poor, which appear only at higher levels of income. of urban literates). To summarise, the rise
will be administered by the ministry for
urban development, and urban employ- Table: Urbanisation in India and China
ment and poverty alleviation respectively. Popn Urban Change Increase Urban Migration Other Natural
JNNURM will support 63 cities, which Growth Popn in Urban in Urban Growth to Urban Urban Urban
include seven 4-million plus mega cities (Per Cent) (2001) Share Popn Rate Areas Increase Growth
(in Million) (Per Cent) (in Million) (Per Cent) (Million) (in Million) (Per Cent)
(the four metros, Ahmedabad, Bangalore
and Hyderabad), 28 million plus cities, China 1990-01 11.4 450 9.9 (36.1)# 157 53.5 141 (90.0)* 16 5.3
e g, Indore, Jamshedpur and Pune and 28 India 1991-01 21.5 285 2.2 (27.8)# 68 32.6 20 (28.6) 58** 16.2
other sub-million cities, which are either Notes: Figures in brackets are percentages.
state capitals or cities of particular cultural, # share of urban population in total, 2001. * migration as a share of increase in urban population.
** See Kundu (2003). This includes about 13 million due to newly classified towns, expansion in
historical or tourist significance, such as area and merging of towns, which is removed for calculating the natural urban increase in the next
Pondicherry, Gangtok, Shillong and Ujjain. column. Chinese urbanisation data is often criticised for not clarifying the extent of growth due to
JNNURM is still an evolving programme, reclassification.
Economic and Political Weekly March 11, 2006 879

of big cities in India is an inevitable cross-subsidisation”8; (e) reform land and the state government is to make up the
consequence of growth, but these cities are management with the repeal of the Urban balance. For urban transport projects, the
productive, even if poor, and also have Land Ceiling and Regulation Act central share can be even higher. In the
strong existing and potential linkages to (ULCRA), reduction in stamp duty, re- case of basic services to the urban poor,
rural areas. The choice is between retard- form of rent control, streamlining of build- the central share ever for the larger ULBs
ing urbanisation by slowing down growth ing approval, transparent procedures for is to be 50 per cent (there is no increase
or accepting the challenge of managing the conversion of agricultural land, comput- for the other cities) and the contribution
urbanisation consequences of rapid growth erising property titling and land registra- of the state and the ULB are clubbed
such that the benefits from growth are tion; (f) conserve water resources through together, i e, if the state is willing to
optimised. laws for rain water harvesting and the use provide the necessary funds, the ULB
Indian cities do not as yet have the fiscal of recycled water and finally; (g) under- need not raise any resources, beyond a
strength to cope with this test. This is in take “structural reforms” (an open descrip- minimum stipulated beneficiary contri-
part due to their limited taxation powers tion which is another example of an bution of 12 per cent (10 per cent for
due to insufficient decentralisation and evolving JNNURM) and encourage public- weaker sectors).
inadequate use of user charges5 . Further- private-partnerships (PPPs) to improve Central funds would be released as grant
more, their administrative capacity is low services and reduce cost. to the state governments who have the
because the cities have not been expected The other leg, i e, provision of additional flexibility to disburse it to ULBs or
to take major decisions. As such, both the central assistance for infrastructure, is to parastatal agencies as a soft loan or grant-
political leadership and bureaucratic be based on a city development plan (CDP). cum-loan or grant, taking care to ensure
machinery have a low profile compared, The CDP is aimed at helping the ULB to that 25 per cent of central and state grant
for example to China, where many mem- (i) develop a vision for its city; (ii) ascertain put together is recovered. At the end of
bers of the central leadership have served the gap between existing infrastructure the JNNURM, this recovery can be con-
as mayors of major cities, and consequently and investments; and (iii) set out priorities, verted to a state urban infrastructure fund.
do not attract suitable talent. Thus, the sequencing and timelines for undertaking The first instalment of 25 per cent will be
challenge is to manage rapid urbanisation various reforms and specific investments, released on signing of the MoA. The
with limited financial and administrative including the means of financing them. balance amount shall be released upon
capacity. Hence, an intervention that The two legs are joined by the execution receipt of the utilisation certificates sub-
responds to these gaps is sorely needed, of a tripartite memorandum of agreement ject to achievement of milestones agreed
but is JNNURM the one that we are (MoA) between state governments and the in the MoA.
looking for? ULBs (including parastatal agencies where In each state, a steering committee, which
necessary) and the government of India, will be assisted by a state level nodal
Basic Features of JNNURM which will indicate the state and ULB’s agency (chosen by the state), would decide
commitment to specific milestones for the and prioritise projects under JNNURM.
The JNNURM walks on two legs – one legal, institutional and financial reform The composition of this steering commit-
of reform of legal, institutional and finan- conditions mentioned above. tee, chaired by either the chief minister or
cial constraints and the other of providing Detailed Project Reports (DPRs) for the the housing minister and comprising
funding for infrastructure building. The identified investment projects would be ministers, mayors, MLAs and secretaries,
reforms are separated into mandatory and submitted along with the MoA. These DPRs has been prescribed in the JNNURM
optional,6 which apply to both state and would be scrutinised by the technical wings guidelines. For infrastructure projects, the
urban local bodies (ULBs). They can be of the ministry or, if necessary, by state level nodal agency will also submit
conveniently grouped into a set of key specialised/technical agencies before be- quarterly monitoring reports to be reviewed
objectives. In addition to (a) decentrali- ing considered for sanction by a central by designated central government officers
sation through implementation of the 74th sanctioning and monitoring committee and CSMC. The monitoring of reform
amendment and assigning to or associating (CSMC) in the ministry of urban deve- implementation would be outsourced to
elected ULBs with city planning, which lopment, chaired by the relevant secretary specialised agencies. In the case of basic
is a state level reform condition, the other and comprising solely of officials in the services to the urban poor, “the schemes
conditions seek to (b) increase participa- central government and the chairperson of of health, education and social security
tion and transparency, through accounting HUDCO.9 Projects of urban renewal, water will be funded through convergence of
reform and e-governance at the ULB level,7 supply including sanitation, sewerage, solid schemes and dovetailing of budgetary
and a public disclosure law and commu- waste management, drainage, and urban provisions available under the programmes
nity participation law at the state level; transport including roads would be ac- of respective sectors (health, human re-
(c) increase ULB revenue through reform corded priority by the CSMC, as would source development, social justice and
of property tax and levy of reasonable user projects with private sector participation. empowerment and labour, etc), but will
charges and reduce cost with the help of Larger ULBs (cities with a population also be monitored by the ministry of urban
VRS, so as to recover full O&M costs; above 4 million) are expected to contribute employment and poverty alleviation”.
(d) improve services to the poor through (this can be in the form of loans from This is an innovation in inter-ministerial
budget earmarking, enhancing security financial institutions) 50 per cent of the co-ordination!
of tenure at affordable prices, and total cost, while the other million plus On completion of JNNURM, the cities
earmarking of land for the economically cities need to contribute only 30 per cent. are expected to have (a) a city-wide frame-
weaker and low income categories in The central government would contribute work for planning and governance,
all housing projects “with a system of 35 per cent and 50 per cent respectively (b) transparent and accountable local
880 Economic and Political Weekly March 11, 2006

services with e-governance in core func- livelihood opportunities, such as the to repeal the ULCRA, has led to fears of
tions and modern and transparent budget- outsourcing of solid waste collection to capture by the “land mafia”. The “land
ing, accounting, financial management women SHGs by ULBs in Andhra Pradesh mafia” has prospered by exploiting the
systems, and (c) financially self-sustain- and Kerala. scarcity of land, which is often an admin-
ing (through reforms to major revenue Before lamenting the introduction of istrative artifice, and their ability to have
instruments) agencies for service delivery private participation in urban services deviations approved from often unenforce-
to provide a basic level of urban services, through PPP, it is important to recognise able land use regulations and city plans.
especially to the poor. that most expenditure on urban capital The approach so far has been to abandon
investment is already executed by the the older and inner cities and for the
Will JNNURM Succeed? private sector, usually through the use of development authority (usually a state and
small item-rate civil works contracts. The not a ULB entity) to acquire land to develop
The JNNURM has been criticised, e g, use of such contracts allows the private new urban areas. This benefits the “land
by Raghu (2005), for a adoption of a neo- sector to escape accountability, for it bears mafia”, who are able to corner adjacent
liberal reform trajectory and forcing uni- little responsibility for the facility after land in anticipation of development. Not
form policy conformity among ULBs construction. More often than not, water only does this lead to tension between the
through an executive instrument, overrid- and sewerage treatment plants lie unused, city and those whose land is being acquired,
ing efforts at different types of decentrali- consume much more electricity than ex- it also increases the cost of service because
sation in various states. A major objection pected, and roads are pitted with potholes. only limited benefits of agglomeration are
is to the effort to move towards full cost The already strained budgets of the ULB realised. The alternate option of allowing
recovery, commercialise urban and civic bear the burden of increased maintenance mixed development in existing older urban
services, introduce private participation cost and the citizens bear the burden of bad areas, is likely to weaken rather than
and make land management flexible. It is service. By contrast, in a PPP, the private strengthen the hold of the urban “land mafia”.
useful to consider these in detail. operator is contractually bound to bear the Another concern of some commentators,
The cost recovery of infrastructure risk of service provision and its revenue like Kundu (2003), is the growing concen-
through user fees is sometimes seen as an flows depend on meeting pre-specified per- tration of urbanisation, which is now
anti-people measure. However, without formance parameters. Used wisely, it can focused in the more developed states. To
user fees, infrastructure will have to be be a strong tool for increased accountabil- some extent, with the onset of liberalisation
paid for through taxes. State level taxes ity and better service provision, especially and the greater freedom afforded to market
are usually regressive and thus fall dis- to the poor since private providers are forces in economic choices, e g, industrial
proportionately on the poor. The use of more responsive to financial penalties as location, a certain increase in concentra-
general state taxes to finance the provision compared to public providers. Furthermore, tion is to be expected as agents respond
of infrastructure in urban areas, especially the introduction of private participation by exploiting the benefits of agglomera-
to the non-poor,10 is particularly egregious brings a higher degree of oversight from tion economies. What should be avoided,
because taxes collected from the poor are regulators,11 media and more importantly, however, is a flight to the more developed
spent to provide subsidised services to consumers, who are unfortunately, other- urban areas that is driven not by their
those who have the ability to pay. It is wise blasé about poor service delivered by economic pull, but because the lack of any
necessary to realise that the non-poor need publicly-owned authorities. viable alternative in the less developed
to pay for provision of urban services The effort must therefore be to ensure areas pushes economic activity away.
through property taxes and user fees – not that this additional tool of accountability JNNURM, by focusing on all the million-
just for commercial sustainability, but does not become blunted. One wonders, plus cities, makes such push-driven pri-
also for equity. A concomitant benefit of however, if JNNURM’s approach to PPP macy less likely, which will improve the
imposing higher financial charges on is tokenism. For all the emphasis on “ef- options for economic activity at these
households that have high levels of con- fective linkages between asset creation and non-traditional locations.
sumption is to help conserve resources asset management”, the focus on DPRs to So, if these concerns are misplaced, can
such as water and help to increase envi- be submitted with the MoA, and utilisation it be expected to be a success? Unfortu-
ronmental sustainability. certificates for monitoring projects, lead nately, there appear to be other problems,
While the poor can be provided one to suspect that their approach is still which are fundamental to the implemen-
subsidised services, many residents of low- mired in the bog of civil works contracts. tation of JNNURM.
income slums, can meet the costs of O&M Monitoring is extremely important if the To begin with, there is a basic disquiet
(and sometimes even more). User fees at private sector has to have the right incen- with reform conditionality based financ-
this level will not only give them a stronger tives. With credible oversight, long-term ing. First, if the same agency is responsible
voice as a revenue contributing consumer, concessions combining investment and for both monitoring the progress of reform
it will also safeguard against the deterio- operations and management can be effec- and for financing, the tendency is to
ration of the network, which forces them tive for water supply, wastewater and solid emphasise one objective or the other and
to go to alternatives at much higher cost. waste treatment, roads, transport services usually, the financing objective gains
Experiments have now started with inno- and service level agreements can be used prominence. When that happens, condi-
vative payment models targeted to poorer for citizen interfaces. Such management tionality is no longer credible since money
residents. In this, community models has major implications for human resources will be disbursed even though conditions
cannot only improve the level of urban at the urban government level. are not met, as has happened with, for
services, e g, metered water supply to Allowing mixed development of ULBs example, the World Bank.12 Hence, to stop
slums in Bangalore, they can also provide in JNNURM, along with the requirement inappropriate projects from happening, it

is important to bring the due diligence on broad parameters. Thus, if a city were supporting capital works. The relationship
exercised by financial institutions (who serious about effecting a change in its between the central government, state
admittedly will only consider the financial planning and project identification and government and the ULB is similar to that
appropriateness of the project) to achieve development process, it is unlikely to be of a refinance institution, a lending insti-
separation of financing and conditionality able to prepare a CDP and submit DPRs tution and a borrower, rather than that of
and the JNNURM is doing this to some in the next few months, for a good cadastral three levels of government working in
extent. Second, at the other end, a strong survey itself would take some time, even tandem to provide services to urban citi-
conditionality focus may filter out good if done expeditiously. By contrast, CDPs, zens. Even the composition of committees
interventions with the potential to benefit for cities such as Indore, have reportedly at the state level to decide on projects is
the poor, from happening in unhelpful cleared the state approval process and have specified by guidelines issued by the central
environments. This is an admittedly more been sent onward to the central govern- government.17 Rather than building genu-
risky strategy (for it is difficult to sustain ment for consideration.14 It is difficult to ine decision-making capacity at the ULB
even well-designed approaches in such envision how sensible DPRs can be pre- level, the impression created by the
environments) but, if successful, can lead pared without an accurate cadastral. How- JNNURM project approval process is still
to the establishment of institutions that are ever, business-as-usual DPRs are possible that “centre knows best”.
insulated from their environment – and and the JNNURM, by ignoring the need As an example, consider the JNNURM
can, by their very presence and activity, for a good cadastral appears to encourage mission objective to plan development such
create a constituency for positive change. this. This appears to be a dangerous trade- that “urbanisation takes place in a dis-
Third, a salutary lesson from World Bank’s off in favour of speed of implementation persed manner”. Indian cities are much
conditionality experience is that reform is over the quality of infrastructure invest- less dense than other cities elsewhere in
unlikely if there is no strong intrinsic ments.15 This may be an example of the the world [Bertaud and Malpezzi 2003].
constituency for change. If so, the primary bias towards financing mentioned above. Since the fixed cost of service provision
benefit of conditional finance is that they However, it is not that JNNURM cannot per unit area can be spread over a larger
provide a means by which reform-minded be operationalised until cadastrals are number of consumers, some amount of
ULBs can distinguish themselves from completed. Not all types of projects are “concrete jungle” may be more cost-effec-
others by being able to publicly commit critically dependent on such information. tive to provide essential services in dense
to a set policy measures. Given the ten- For example, installing sewerage treatment areas as compared to dispersed settlements.
dency of financiers to relax conditionality, plants at the outfall of existing nullahs may A significant part of urban renewal is to
such commitment can be measured by its possibly be a sensible project requiring redevelop existing areas and equip them
willingness to meet certain preconditions limited data to justify. Similarly, the long- with the kind of infrastructure that is needed
before disbursement. It is here that term contracting out of maintenance for to cope with higher densities, e g, wider
JNNURM’s principle of MoA before roads that form the core transport corridor roads, electricity, water and sewerage lines
money is important, but its strength is is also possibly a good decision in terms that can bear a heavier load, etc. But the
diluted since ULBs are permitted to com- of investment priorities. But, planning any guidelines convey the impression that this
mit to a schedule of implementation rather major transport investment or investment decision on density is not the domain of
than undertake up front reform. However, in water distribution or sewerage collec- the ULB but that of the central govern-
in what follows, we will consider issues tion networks would be much better if the ment. On the ground, if ULBs are allowed
that go beyond these concerns and focus relevant decision-makers had access to to decide, some may increase density
on issues relate more to implementation. accurate information. A benign interpre- while others will not. This decision
The beginning of any sensible planning tation of this neglect of data is that would ideally emerge out of a construc-
exercise is good data. The investment JNNURM continues the hoary Indian tive debate between proponents on either
programme of JNNURM is critically tradition of decision by Delphi rather than side, in the context of local conditions.
dependent on the quality of the CDP. As by data. Nurturing such decision-making capacity
of today, few ULBs (Bangalore is a not- is critical to the sustainability of the urban
able exception) have a digital cadastral ‘Centre Knows Best’ renewal process.
map13 of reasonable accuracy and none Some would argue that it is premature
have a process of updating it, were such A less charitable interpretation would to talk of decentralisation when the central
a map available for such a process would argue that, despite the call for decentrali- government is providing most of the fi-
require a complete digital property titling sation, the short shrift being given to the nance. But, while own sources of revenue
and computerised land record registration CDP reflects, in part, a tendency of the for ULBs are an integral accompaniment
– one of the objectives under the JNNURM. central government to arrogate the respon- to decentralisation of authority, it is im-
The creation of such a map in any major sibilities of the ULB. The focus of portant to remember that the need for
city is not expensive (of the order of a few JNNURM is more on the provision of the financial devolutions from state and even
crore rupees), but it is beyond the budget infrastructure projects, rather than the central governments arise because the
of any preparatory support from JNNURM. strengthening of municipal governments, Indian tax collection system is centralised
Thus, a ULB has either to spend its own which incidentally is the last of four at the state or central level, unlike for
money or go through the quasi-subterfuge objectives in JNNURM. A reading of the example, China, where the city collects the
of proposing to commission a cadastral as emerging documentation from JNNURM16 taxes and sends it up the administrative
part of a property tax enhancement project. seems to indicate the implementation of hierarchy.18 In this context it is important
In the absence of a cadastral, the CDP the programme looks no different from a that the central support be viewed less as
submitted by the city can only be based standard centrally sponsored scheme for a handout, and more as an entitlement and

it is precisely this that central and state As noted earlier, given the state of data of must look for it in the political processes of
finance commissions seek to achieve. our cities, environmentally sensible democracy. As mentioned earlier, a salutary
Furthermore, for those who argue for projects, like sewerage treatment plants lesson from World Bank’s conditionality
stronger conditionality and a simple but are perhaps among the few least likely to experience is that reform is unlikely if there
significant financial incentive, it may be become stranded. is no strong intrinsic constituency for
difficult to impose too many conditions change. The beginnings of such a constitu-
on ULBs until they acquire sufficient Conclusion ency are already evident in many cities,
authority, i e, after the state decentralises but it is as yet out of the mainstream agenda of
the administrative machinery. For example, It is evident that our cities do not have political parties, where the current electoral
APRDP-type incentive payments (as used adequate infrastructure. That is merely the system, focused at the state-level, produces
in the electricity sector) for own revenue symptom. The disease is that they do not political leadership and an agenda that is
increases or reduction in unaccounted have a government that can enable the more reflective of the rural electoral base.
for water (UFW) may not be useful if citizens to decide to provide themselves But, just as panchayati raj has come to be
the ULB has only limited revenue sources the infrastructure they need and the financial seen as essential for better rural gover-
(as a result of inadequate decentralisation powers to pay for it, if they so decide. In nance, it needs to be appreciated that the
by the state) or if the water supply system an ideal situation, an elected ULB would core urban deficit is not the lack of infra-
in the ULB has been constructed and is base its investment programme on a data- structure but the lack of self-governance,
being managed by a state-level water rich CDP, work out the financing mix of as envisaged in the 74th amendment to the
utility, outside the administrative control taxes (including statutory devolutions from Constitution. Until that happens, the legacy
of the ULB. the state finance commissions) and user of JNNURM, focused as it currently is on
It would therefore appear that there is fees based on their citizen’s response and infrastructure provision, may unfortunately
no substantial case for continuing with participation. They would be supported by be limited to water and sewerage treatment
the current slow and measured pace of a cadre of professional urban managers, plants that remain unused, and iconic metro
decentralisation in JNNURM. There are at who will be capable of responding to the railway systems that do not address the
least two other areas where the design of expressed wishes of the urban citizen. The transportation needs of the poor. One hopes
JNNURM leaves a feeling of discomfort. role of the state and central governments to be proven wrong. EPW
Consider its attitude towards the poor. would be to provide additional funds,
Is separating JNNURM into two sub- especially for specific projects of regional Email: partha@earthling.net
missions, one on urban infrastructure and or national importance and transitional
governance and the other on basic services support for the ULBs as they take on move Notes
to the urban poor a matter of administrative to full self-governance.21
necessity, given the political need to have While it may be utopian to expect this 1 “Urban renewal”, which came to be associated
two separate ministries? Or does it separate transition to happen overnight (as other with the redevelopment of inner city neighbour-
hoods, has often been criticised for the
the poor and the city by failing to recognise countries are discovering in an international relocation of the poor and powerless, without
them as an integral part of the urban context!), and while it may be unwise to adequate thought to alternative opportunities
economy and reflect the old mindset that immediately hand over all decision- for these communities. The CMP is sensitive to
the rich need infrastructure the poor need making to an elected ULB with patently this aspect for it goes on to say “Forced eviction
amelioration? It is particularly worrying to little capacity, we can surely trust our demo- and demolition of slums will be stopped and
while undertaking urban renewal, care will be
note that, though JNNURM does refer to cratic ethos a bit more. Managing a big and taken to see that the urban and semi-urban poor
security of tenure as a key reform, putting poor city requires voters to have the po- are provided housing near their place of
in place mechanisms to ensure the continued litical will and the ability to punish. The occupation”.
supply of low cost housing19 does not appear right to information and public disclosure 2 Preface to the JNNURM Toolkit. See http://
to be of high priority, beyond a misplaced laws should help in this process www.urbanindia.nic.in/moud/programme/ud/
jnnurm/Preface.pdf
suggestion for financing through “cross- (JNNURM’s own document dissemina- 3 A sophisticated version promotes dispersed
subsidisation”. This lack of thought is also tion policies are a good beginning22 ), but urbanisation, but by many standards, e g,
evident in designing a uniform central currently, the urban voters cannot vote out Henderson (2003), India is already quite
share of grant (i e, 35 per cent) for all large the real decision-makers for their locality, dispersed, with only a quarter of the urban
cities, regardless of their population com- since the critical decisions are still being population in the million-plus cities. Indeed,
it may be at a sub-optimal level of primacy for
position, which varies from over 50 per taken at the state level. A clear and short its level of development. Trying to design
cent slum population in Mumbai to less road map to genuine participative demo- urban growth in India such that they reflect
than 1 per cent (!) in Patna.20 However, cracy in the ULB where a strong and pow- small and genteel European towns is not only
the proposed single-agency (MoUEPA) erful elected government is responsible for unlikely to succeed, it may also not be desirable
monitoring mechanism can be a singular its own successes and failures is what is as it implies dispersed provision of urban
infrastructure, which may not be affordable at
institutional innovation. needed for sustainable urban renewal. this stage of India’s development.
Finally, beyond a desultory nod to sus- It is this fundamental transformation in 4 Quotes are from the prime minister’s speech
tainable development, there is little men- governance, where it is conceivable that at the inauguration http://pmindia.nic.in/speech/
tion of environmental issues in JNNURM. a politician would rather be mayor of content.asp?id=235. See also Mohan (2006).
However, the prioritisation of water, sew- Bangalore than chief minister of Karnataka, 5 ULBs are particularly disadvantaged because
land taxation invites relocation to the periphery,
erage, solid waste and transport projects which will bring sustained urban renewal. leaving few factors of production to tax as
holds out hope that better sense may pre- Such change is unlikely to emerge from the capital is already internationally mobile and
vail during the project preparation process. bureaucratic processes of government. One labour has low income. Between 2001-02 and

2002-03, their revenue (both own and total) 18 During the initial period of post-1978 reform
declined by over 15 per cent and consequently, cities like Guangdong and Shanghai were
expenditure, including revenue expenditure, allowed to keep very high shares of revenue
declined by over 12 per cent. collected. See Wong (1997).
6 The nomenclature of mandatory and option 19 For example, in relocating existing slums, it
reform is misleading since both have to be is important to focus on building neighbour-
implemented over the duration of JNNURM. hoods instead of simply building houses. A
The schedule of implementing mandatory neighbourhood, along with appropriate
reforms has to be pre-specified by the state in financial and administrative mechanisms for
its MoA while the timing of optional reforms allotment of housing, decreases the probability
is flexible within the seven-year duration of that the persons would re-sell a subsidised
the mission. allotment and reestablish a slum. Furthermore,
7 Technology is critical to planning and the continued supply of low-cost housing that
monitoring, e g, digital cadastral for land use is usable by the poor is an issue of land
and property taxes, planning for road management, transport networks and financial
improvements based on traffic flows, etc. mechanisms to target subsidies, all part of
8 The guidelines for the two JNNURM sub- overall urban governance.
missions are available at http://muepa.nic.in/ 20 Besides, the challenges in each ULB will be
programs/bsup.pdf and http://urbanindia.nic.in/ different. In some, special effort will be needed
moud/programme/ud/jnnurm/ to reach water, sanitation, health and education
guidelines_jnnurm.pdf. Unattributed quotes are to the slums, in others the general service
from them. delivery mechanism will do. Decisions as to
9 The CSMC chaired by the secretary (urban the mix of user fees and taxes and extent of
development) would comprise the secretary community development will also differ from
(urban employment and poverty alleviation), the one ULB to another.
principal adviser (housing and urban develop- 21 ULBs should be able to decide the extent of
ment) in the Planning Commission, the joint public transportation, the choice of mass rapid
secretary and financial adviser, the chief planner, transit systems, whether high capacity bus
Town and Country Planning Organisation, systems or metro rail, and use the transport
Adviser, CPHEEO, chairman and managing networks to try and shape what their city looks
director, HUDCO and the joint secretary (urban like. They should have the capacity to decide
development) as member-secretary. whether to build flyovers or hire better trained
10 The urban poor rarely benefit from these traffic police instead. To finance all these, they
services. According to the Census of 2001, less should have, for example, the ability to tax
than half (49.7 per cent) of urban households gasoline purchase in the ULB.
have a drinking water tap within premises, even 22 See http://urbanindia.nic.in/moud/programme/
less have a water closet (46.1 per cent) and just ud/jnnurm.htm and http://muepa.nic.in/rti/
over a third (34.5 per cent) have closed drainage. rti_index.htm
11 Monitoring is extremely important if the private
sector has to have the right incentives. With
credible oversight, long-term concessions References
combining investment and operations and
management can be effective for water supply, Angang, Hu, Hu Linlin and Chang Zhixiao (2005):
wastewater and solid waste treatment, roads, ‘China’s Economic Growth and Poverty
transport services and service level agreements Reduction (1978-2002)’ in Wanda Tseng and
can be used for citizen interfaces. Such David Cowen (eds), India and China’s Recent
management has major implications for human Experience with Economic Growth, Palgrave
resources at the urban government level. Macmillan.
12 See World Bank (1998), which argues that the Bertaud, Alain and Stephen Malpezzi (2003): ‘The
effort of donor agencies “buy reform”, by Spatial Distribution of Population in 48 World
offering assistance to clients that were not Cities: Implications for Economies in
otherwise inclined to reform, has failed. Transition’, University of Wisconsin at
13 A cadastral survey is one on a scale sufficiently Madison, Centre for Urban Land Economics
large to accurately show the extent and measure- Research.
ment of every field or other block of land. Henderson, J V (2003): ‘The Urbanisation Process
14 See ‘JNNURM okays City’s Development and Economic Growth: The So-What Question’,
Plan’, Hindustan Times (Bhopal editon) January Journal of Economic Growth, 8, 47-71.
29, 2006. http://hindustantimes.com/news/ Kundu, Amitabh (2003): ‘Urbanisation and Urban
5922_1611101,0015002100020000.htm Governance’, Economic and Political Weekly,
15 Another issue is that the CDP is not at the level July 19.
of an urban agglomeration, but at the level of Mohan, Rakesh (2006): ‘Managing Metros’,
city. At this time, JNNURM is not contemplat- Seminar, January.
ing any institution to coordinate the CDPs of Raghu (2005): ‘Urban Renewal Mission: Whose
ULBs in a single urban agglomeration. This Agenda?’ People’s Democracy, December 4,
is likely to become a problem sooner than later. Vol XXIX, No 49.
16 See http://urbanindia.nic.in/moud/programme/ Rao, P Parthasarathy, P S Birthal, P K Joshi and
ud/main.htm D Kar (2004): ‘Agricultural Diversification in
17 There is some limited attempt to ensure that India and the Role of Urbanisation’, IFPRI-
the capital works being financed emerge out MTID Discussion Paper No 77, November.
of a consultative process (including a national Wong, Christine P W (ed) (1997): Financing Local
advisory group headed by a technical adviser Government in the People’s Republic of China,
drawn from civil society) and the projects are Oxford University Press.
focused on addressing key gaps in public World Bank (1998): Assessing Aid: What Works,
transport, water and sanitation and providing What Doesn’t and Why, Oxford University
services to the urban poor. Press.

Special Article
Space Relations of Capital and Significance

of New Economic Enclaves: SEZs in India
Swapna Banerjee-Guha
This paper examines the evolution of the new “Space is political. It is a product literally filled with ideologies.”
– Lefebvre 1991: 101
development enclaves – special economic zones – in
India in the light of the space relations of capital. Introduction
A
The process of establishing sezs in India is essentially a large number of erudite, critical writings are being
classic unfolding of the process of “accumulation by produced on the current economic growth process in
dispossession” which is part of the recent strategy India and the official policy of establishing development
enclaves in different parts of the country. Most of these writings
of global capital to overcome the chronic problem of
have deftly exposited the fallacy of the present path and its exclu-
over-accumulation. The paper throws light on the sionist framework that has largely been seen as a part of the
ongoing reorganisation of the space relations of contemporary process of economic globalisation. This paper,
capital in India. while sharing the critical perspectives of such writings, attempts
to examine the evolution of these new economic enclaves/spaces
in the light of spatiality and space relations of capital. The inter-
relationship that exists among space, spatiality of capital and the
globalisation process happens to be the premise of this paper.
In several states in India, specific areas – large and small, rural
and urban, are being identified as special economic zones (SEZs)
to carry out modern hi-tech corporatised activities with promised
(sic) returns at a high rate. They are mostly located in function-
ally active spaces, barring a few that have less habitat or occupa-
tions. Essentially global, these new economic spaces, are being
carved out from agricultural areas, forests or coastal fishing
zones, at times located near big cities or communication networks,
in semi-rural areas, in the outer peripheries of metropolitan
regions, in villages, also in slums, dilapidated/less-used areas in
cities of all sizes. In the process of converting old/active economic
spaces into newer ones, a large number of farmers, agricultural
labourers, fisherfolk and allied workers are getting displaced
from land and livelihoods that is leading to fierce resistance
movements in different parts of the country and resultant state
atrocities and violence. According to the official argument, as
India cannot grow fast without foreign investment for which
“world class infrastructure” is an imperative and which the state
possibly cannot provide throughout the country in a short time, it
is necessary to invite private capital to provide it initially in
chosen pockets. While private capital agrees to do undertake this
task, it becomes obligatory on the part of the state to offer them
various concessions and subsidies in their pursuit of establishing
economic and allied activities within such zones. In several
states, land acquisition for creating SEZs is being undertaken by
regional governments by invoking the colonial Land Acquisition
Act (LAA), 1894. As per the provisions of this Act, the state is
Swapna Banerjee-Guha (sbanerjeeguha@hotmail.com) is with the the ultimate owner of the land and it can take over any tract
Tata Institute of Social Sciences, Mumbai.
for “public purposes”, if it pays reasonable compensation.
Economic & Political Weekly EPW november 22, 2008 51
Special Article
Enclave development, that was once a mainstay of the colonial tuned to the requirement of global capital [Banerjee-Guha 2002 a].
state, has thus surfaced as a major policy of the contemporary The international economic space thence created is characterised
Indian state with the latter emerging as an active partner in by a divergent use of space and spatial attributes reflecting
corporate growth. contradictory tendencies of concentration and dispersal and
The above process of opening up of new territories – within old hence a space-specific valorisation and devalorisation,2 as seen in
ones by replacing the existing land uses – to not just capitalistic the recent statist logic in India supporting land acquisition in
development but to capitalistic forms of market behaviour – agricultural areas for establishing SEZs. Space in such cases needs
needs to be viewed as a part of a larger process of progression of to be seen as absolute, relative and relational – all three together
global capital and its strategy to industrialise the south. The in dialectical tension with each other and in interplay, depending
obvious contradictions of these spaces should not be seen as one on circumstances [Harvey 2006]. In the light of this, the rapid
between industry and agriculture, or modern and backward, as it and dramatic changes that are taking place in the regional space
gets officially projected, but more importantly as one between economies in India due to national and international restructu
the nature of industrial development in the less developed part of ring of capital become extremely relevant.
the world and the historically evolved region-specific socio- As capitalist activity is always grounded somewhere, it is found
economic activities and related livelihoods; the latter, in other that the diverse material processes in a given spatiality continu-
words, a niche, an interrelated cultural landscape that is now ously get appropriated by the process of capital accumulation.
becoming expendable in the name of “creative destruction” by The construction of globalisation thus is found to have largely
citing a “globally hegemonic discourse”. The depth of this depended not only on geographical reorganisation of economic
discourse and its intensive regulatory power resides in its ability activities but also historically evolved cultural landscapes. In the
to restrict serious, responsible, alternative viewpoints of a larger process, it has built and rebuilt geography of regions in its own
body, and also specify a parameter of the “practical” and “sensi- images, creating newer socio-economic landscapes with produced
ble” among linked groups of theoreticians, policymakers and space of infrastructure and institutions for the purpose of facili-
practitioners [Peet 2002]. Following this, I would argue that the tating capital accumulation [Harvey 2000]. In analysing the SEZs
entire process of establishing SEZs in India needs to be seen as in contemporary India, the post-1980 operational strategy of
essentially a classic unfolding of the process of “accumulation by global capital can be the base point. The strategy tangibly repre-
dispossession”,1 the recent strategy of the global capital to sented a contradictory, uneven and crisis ridden process that
overcome the chronic problem of over-accumulation. incessantly explored the possibility of reorganising space
How does one look at this process as a part of the ongoing relations to create more surplus that could be subsequently
reorganisation of space relations of capital? For that, there is a undermined or even destroyed for newer accumulation
need to revisit the concept of space and spatiality that have [Banerjee-Guha 1997]. It brought in its wake dynamic changes in
always been a key construct of capital’s operational framework production and labour processes. While the pre-1980 relocation
and therefore a key element in the understanding of the process process of production from cores having skilled and highly priced
of accumulation by dispossession in contemporary times. organised labour to peripheries with skilled but cheaper
organised labour aimed at higher profit by way of reduction of
Space Relations of Capital and Globalisation input cost (that on its turn led to labour aristocracy in poorer
The last 100 years of capitalist development have involved countries), the subsequent reorganisation rested on disaggrega-
production and reproduction of space at an unprecedented scale. tion and fragmentation of a single production process into differ-
The renewed importance of geographical space is reflected in the ent modes accompanied with a rigid and centralised corporate
drastic redrawing of economic and political boundaries based on control. Because of technological innovations and revolutionary
international political economic relations. Phrases like “shrink- development in transport and communication over which global
ing of the world” or evolution of a “global village” thus need to be capital had a total control, production could be made more
understood in terms of the specific necessity of a mode of produc- fragmented, homogenised, suitable to many sub-processes and
tion based on the relation between capital and labour expressing spatially separated too [Banerjee-Guha 1997].
a time-space compression. The universalising tendency they This “partial” production process distributed at various
project, primarily concerns the goal of equalisation with unhin- locations became the hallmark of the post-1980 spatial organisa-
dered movement of goods, services, technology and selective tion of global capital [Thrift 1986] involving large-scale and
humanpower, for the need of a constantly expanding market. I simultaneous small batch production, achieving efficiency by
argued earlier [Banerjee-Guha 2002a] that it is essentially a externalising economies of scale (in complete contrast to large-
levelling of the globe at the behest of capital, exacting equality in scale, factory-based mass production achieving efficiency
the conditions of the exploitation of labour [Marx 1867 (1967)] in through internalisation of economies of scale). Because of its
every sphere of production. The above phrases, begotten from simultaneous accommodation of modern and pre-modern
such levelling, project a one-dimensional geography of sameness production systems than having a unilinear, evolutionary
in which actually all facets of human experiences are degraded progression of production and technology together, Ettlinger
and equalised downward [Smith 1986], hiding the fact that the (1990) preferred the term “non-Fordist” than post-Fordist for the
premise of this equalisation rests on a strategy of dividing relative newer strategy. Its success lay in subcontracting, making the
space into many absolute spaces of differential development, all non-capitalist territorial production areas coexist with capitalist
52 november 22, 2008 EPW Economic & Political Weekly
Special Article
production complexes as equally important entities that drasti- garment unit of Hindustan Lever while the number of workers
cally brought down the cost of production, more importantly the was 250, it was 500 in the subcontracting units. Similar was the
cost of reproduction and worked towards an absolute exploita- situation in H L footwear units [Banerjee-Guha 1997].
tion of surplus [Chandoke 1991]. The geographical see-saw of Such negative correlation between increase in production and
closing down production at one place and opening up elsewhere, decrease in organised factory employment distorted the concept
especially in a totally different mode were its common features. of increase in labour productivity and created a new labour divide
The lost organised jobs of the rich countries did not necessarily in which the concept of labour aristocracy got diluted with
get relocated in the modern organised sector of the poorer expendability of labour. It worked towards a narrow sectoral
countries; fragmented and disaggregated, they got accommo- development of a high technology and information-based order
dated in the unorganised sector. It did become a part of the thwarting redistribution of income and economic benefits over
process of annihilation of space3 – the primary aim of the globali- an expanded space [Kundu 1997]. The UNDP 1993 Human Develop
sation project – but with a simultaneous division and reconstruc- ment Report noted that many parts of the world started witness-
tion of absolute spaces, disjointed from one another in terms of ing a jobless growth during this period. The pattern of income
wage and quality of life variations. Thus, on the one hand, distribution showed that 20 per cent of the world’s population
technological innovation made it possible to reduce manpower had 83 per cent of the world’s income, i e, five times the purchas-
requirement [Basu 2007] in skilled jobs located in modern ing power of the poorest 80 per cent [UNDP 1993]. A number of
production complexes with developed infrastructure, and on the countries during this period started adopting supply side
other, with simultaneous disaggregation of production and economic policies seeking to derive efficiencies in service deliv-
outsourcing of a large part of the same production process, the ery by privatising public services. State-capital alliances started
possibility of engaging low paid, subcontracting, “footloose” becoming a common practice and as a supportive mechanism,
workers on flexible terms, increased by leaps and bounds. Tension neoliberalism flourished, subsequently to emerge as an unchal-
between fixity and movement of capital was internalised in the lenged model of economic efficiency with its spite for those who
above framework resulting in a distinct space-specific devalua- dared to challenge its revealed realities [George 1999]. Blind
tion that went to form a part of an internationally operative faith on the market was preached with a religious fervour
human cost, social wear and tear and accumulation through throughout the world [Conway and Heynen 2006], emphasising
underdevelopment. Further, through deskilling of labour and state fiscal austerity, market liberalisation and public sector
functional and physical separation of production, specific “roles” privatisation for the South, the three pillars of the “Washington
were created for places in the world economy [Wright 2002]. Consensus” [Goldman 2005]. It was accompanied with a consist-
The basic tenet of the above framework and the associated new ent assurance from the global North and the international insti-
international division of labour (NIDL) rested on disaggregation tutions that economic growth and expansion would come only
of production and wage differentials. For the purpose of increas- from the above strategy. “The myth of the global market place”
ing profit, greater mobility of capital, goods and services was [Sachs 1999] was finally institutionalised with signing of the
pitted against the lesser mobility or near immobility of labour of 1994 Uruguay round of General Agreement on Tariffs and Trade
poor regions and a transnational economic space was carved out (GATT) and the emergence of the World Trade Organisation
in which a phase-wise separation of production between capita (WTO). Neoliberal structural adjustment “solutions” further
list and non-capitalist modes surfaced as a basic methodology. exacerbated impoverishment, increased exploitation of extrac-
There was a massive divestment of capital in old manufacturing tive resources of the South and heightened iniquities in their
plants in the UK, USA, Germany, France and other countries comparative advantages vis-à-vis the advanced capitalist core
associated with a restructuring of mass production methods countries and their transnational corporate partners [Conway
towards a “flexible” model of customised production. In this and Heynen 2006].
global industrial restructuring, the capital-labour relation and
production relations between the global core and periphery Opening Up of New Economic Spaces: SEZs in India
underwent a drastic reconfiguration. ILO (1981) noted that global As a natural outcome of the above process, in a number of
corporations operating in Asia, Africa and Latin America, since countries of the global South including India, through global-
the 1970s, increased the size of unskilled workers at the cost of local interplay, a newer form of capitalist development gradually
large-scale displacement of production workers. During late came to emerge, using the dynamics of absolute space within the
1980s, General Electric’s employment reduced by 1,00,000 while parameters of relative and relational spaces and depending upon
its revenue increased by $ 13 billion, Fiat removed around 15,000 globally networked flows of information, finance, technology and
workers from employment while its revenue rose by 12.4 billion a supportive neoliberal hegemonic discourse. It went beyond the
lire [Lowe 1992]. In Unilever, cost per worker in Asia was drasti- previous practice of production disaggregation and strategised
cally brought down while profit per worker rose by 50 per cent on a total appropriation of space and its attributes for a newer
[Elshoff 1988]. In the early 1990s, in Procter and Gamble in India, form of exploitation. Set to mutate all existing social relations, it
the entire production of certain products like Crest tooth paste, modified the non-Fordist labour process, transformed relations
Clearasil medicated cream or Ultra Clearasil facial cream was between the dominant and the dominated and alienated specific
undertaken by contract labour located in Andhra Pradesh, space-economies from their respective social realities to
Gujarat or Maharashtra. During the same time, in the organised construct an economic system conforming to its description in
Special Article
pure theory [Bourdieu 1998]. The common, collective interest web sites [GoI 2007] on SEZs that are bursting with details on the
and the public good started getting negotiated away by ideologi- requirements and potential of these zones.
cal, political and economic power-plays that privileged individual Most of the SEZs are gigantic, requiring huge land areas
accumulation subordinating the common people and their rights (minimum 1,000 hectares for multi-product zones and 100 for
Figure 1: Sectorwise Distribution of Approved [Cox 1999] to the dominant the service sector ones). One must note the congruence of SEZ
SEZs in India 2008 power of market exchange functional policy of keeping only 25 per cent land reserved for
IT/ITES Biotech
5 %
Pharmaceutical [Hardt and Negri 2004] multi-product SEZs and 50 per cent for sector specific productive
62% 4%
Textile 4% that even went to under- purposes while the rest for development of real estate, potentially
Multi products write justification for exces- creating speculative real estate bubbles in an effort towards
5%
sive militarism and state absorbing surplus value, with the help of “neoliberal” urbanism
violence. Emergence of [Smith 2002]. This arrangement explains the urgency from the
Others
SEZs in India and associ- part of the government to set up such zones. The speed with
20% ated contradictions need to which they are being approved is alarming: 462 formally
be viewed in the light of the approved (Figure 1) till May, 2008 since the enactment of SEZ Act
above process. in 2005, comprising about 1,26,077 hectares. Out of these 462,
Source: Government of India, 2008
The contemporary space Maharashtra accounts for the largest number (89), followed
relations of capital represents a thorough reworking of innumer- by Andhra Pradesh (75) and Tamil Nadu (59) (Figure 2) (see the
able “regionalities” that had once been produced by the conver- Table, p 55) [GoI 2008].
gence of molecular processes of capital accumulation in countries
Figure 2: Statewise Distribution of Approved SEZS 2008
located in different parts of the world, characterised by territori-
alisation of resources, labour and mode of production. In all these
regions, over the years, hegemonistic class alliances were formed
as did a working class alliance, encompassing cultural and social
values, attitudes, beliefs, religious as well as political affiliations.
Punjab Chandigarh
As India is largely agricultural, many of the above “regionalities” 7 2
Uttaranchal
are embedded in agriculture-related activities and livelihoods, Haryana 3
38
identity of which cuts across the above characterisations. Drastic Delhi
Rajasthan 7
reorganisation of economic space and activities due to the estab- 8 Uttar Pradesh
26 Nagaland
lishment of SEZs is lending an ambiguous identity of placeless- 2
ness [Harvey 1982] to the above “regionalities”4 which is evident Gujarat Zharkhand West
Madhya Pradesh
in the conversion of active farmlands in many states into areas of 39
13 1 Bengal
22
high-tech corporate activities, in dissociation from the rooted Chhattisgarh
1
regional socio- economic formations. It rests on a contradictory Dadra and Maharashtra
Orissa
Nagar Haveli 9
framework of inclusion (of few) and exclusion (of many) and gets 4
89
directly related to the materialisation of uneven development at Andhra Pradesh

75
various scales involving integration of selective regions/areas Karnataka
and sections of societies in the globalised framework [Banerjee- 42
Guha 1997]. A destructive ensemble of obsoletism and rebuild-

Pondichery
ing, ephemerality and reinterpretation diffuses across the old 1
Kerala Tamil Nadu
spaces, displacing the existing use values and altering the discur- 1 59
sive as well as the material geography of such spaces. “Space” in
this construct is used in a diverse manner giving rise to contra-
dictory tendencies of integration and segmentation, creating a
Source: Government of India, 2008.
solid and material background for intense conflicts [Banerjee-
Guha 2002] that goes to form, inter alia, a part of a global hegem- In 2000, the first SEZ policy in India was drafted and the SEZ
onistic cultural discourse [Gramsci 1971]. A typical neoliberal Act came up in 2005. The said zones systematically are being
construction of space, place and scale takes place that goes to projected as “carriers of economic prosperity” that would (i) boost
reconstruct a new geography of centrality and marginality economic growth at an extremely fast rate, (ii) usher in affluence
making the issues of production and capitalisation of space in rural areas, (iii) provide large number of jobs in manufactur-
extremely crucial. Landscapes of conflict that are produced as a ing and other services, (iv) attract global manufacturing and
result, however, stand to be resisted and contested from below technological skills, (v) bring in private and public sector invest-
[Conway and Heynen 2006] by those whose livelihoods get ment from both home and abroad, (vi) develop infrastructural
jeopardised and who are systematically coerced by the state facilities, (vii) make Indian firms more competitive, and (viii) help
apparatus in diverse ways thereby proving their vulnerability in slow down rural-urban migration. In short, they are the officially
the current order. One thus finds no mention of the issues of acclaimed carriers of India’s modern industrialisation that would
displacement, rehabilitation or compensation in the government create an all round transformation and lead the country towards
Special Article
a modern mode of living. A number of state governments in India, growth with a booming export sector. However, she is a success-
irrespective of their political ideology, are vying with each other ful exporter because her effective wage rate is significantly lower
to woo investors to come into their respective territories for which than in the west. If this gap in wages between China and the west
large-scale concessions and incentives are offered at both state got closed, or even significantly narrowed, then her growth
and the central levels. To mention a few: (i) recognition as duty strategy will no longer be successful. In the west, in the current
free zones and foreign territory in terms of trade operations, epoch of “globalisation” the wage rate of workers has been virtu-
(ii) exemption from income, sales or service tax: 100 per cent tax ally stagnant. As a result, Chinese wage rates, which necessarily
exemption for the first five years and 50 per cent exemption for have to remain persistently lower than the western ones for the
the next five years, (iii) exemption from examination of export/ success of her export-led strategy, cannot increase much either.
import cargo by customs, (iv) allowance to subcontract to any No matter how high the rate of growth of labour productivity in
extent, (v) freedom from environment impact assessment (EIA) China in the export sector, since this rate of growth of labour
regime, (vi) allowance to bypass state electricity regulatory commis- productivity is more or less what obtains in the west (because
sions and state taxes on raw material, (vii) exemption from import China is not an innovator and only adopts technologies
licence rules, and (viii) assurance of all basic infrastructure on innovated in the west), the growth rate of China’s wage rates
priority. Section 49 of SEZ Act, 2005 empowers the government cannot move out of sync with that of western wage rates. If the
to exclude any or all SEZs from the control of any central law. latter are stagnant then so must China’s be, even though labour
This means that SEZs will not be governed by the law of the land. productiv ity everywhere is rising at a fantastic rate’ [Patnaik
The incentives essentially speak of a distinctive status that the 2007]. Harvey (2005) notes that hourly wages in textile
SEZs enjoy as “spaces of difference” [Berner and Korff 1995] that production in China in the late-1990s stood at 30 cents compared
signifies them as autonomous functional units, delinked from the to Mexico’s and South Korea’s $ 2.75. This incredible wage labour
surrounding areas on functional terms, simultaneously having advantage made China compete against other low-cost locations,
such links with faraway places through global networks. In such as, Mexico, Indonesia, Vietnam and Thailand in low value
reality, they reflect spatial imbalances at local level associated added production sectors and emerge as the major supplier of the
with economic decline, social inequality and fragmentation at US market in consumer goods. From 1990s she started moving up
wider territorial scales. It is argued [RUPE 2008] that because the ladder of value added production to electronics and machine
balance between requirements and incentives is grossly skewed in tools and competing with countries like South Korea, Japan,
these zones that are heavily subsidised by both the government Taiwan, Malaysia and Singapore that helped her earn the status
and public, huge loss to exchequers in tax revenues will occur. of an off-shore production centre of these countries, besides the
US, in a big way [Harvey 2005].
Growth, Development and Distribution Also as low wage rates made capital saving innovations possi-
The logic of establishing SEZs is resting heavily on concepts like ble, highly productive Chinese factories reversed the process of
“growth” and “competition” and the supposed economic magic
they can achieve. It is now widely accepted in official circles that Table: State-wise Distribution of Approved SEZs in India (May 2008)
Sr State Total Area Percentage Share of Major Types
to succeed in the global market a country must have competitive No in Hectares IT/ITES Biotech Pharma- Textile Multi- Others
advantage that they should utilise to the fullest. But who does not ceuticals Product
know that competition in the globalised world itself is unequal? 1 Andhra Pradesh 10,825.4938 13.18 0.47 6.19 3.73 63.15 13.28
While poorer countries find themselves pitted against global 2 Chandigarh 58.4566 100.00 – – – – –
corporations having the necessary technological advantages of 3 Chhattisgarh 10.77 100.00 – – – – –
4 Dadra Nagar Haveli 1,17.75 11.99 – – 67.94 – 20.07
negotiating distance and locating economic activities anywhere,
5 Delhi 3,86.04 19.38 17.83 31.92 – – 30.87
the former only have a huge reserve of workers, at various educa-
6 Gujarat 33,803.1705 4.37 0.04 0.17 0.32 48.70 56.40
tional levels, whose wage rate is extremely low compared to the
7 Haryana 16,87.223 34.16 3.49 – 6.80 42.49 13.06
prevailing rate in the west. This may lead to high return on capital 8 Jharkhand 36.00 – – – – – 100.00
but not with an associated increase in real wage and personal 9 Karnataka 27,12.2099 39.72 2.70 32.04 8.60 – 16.94
income, as stated by several critics [Bhaduri 2007; Mitra 2006]. It 10 Kerala 6,19.1683 31.44 1.94 – – – 66.62
has already been seen how the operational strategy of fragment- 11 Madhya Pradesh 5,47.207 63.23 – – – 18.27 18.50
ing production at differential spaces of development became a 12 Maharashtra 11,361.0385 12.75 1.91 6.17 7.04 48.73 22.4
tremendous source of profit for global capital all the world over 13 Nagaland 4,50.00 – – – – 88.89 11.11
and a factor towards exacerbating immiserisation of labour. The 14 Orissa 1,953.36 9.58 51.01 39.41
latter while acting as a factor for the drastic profit rise, remained 15 Pondichery 3,46.00 – – – – 100.00 –
16 Punjab 2,84.07 18.33 – 8.33 35.67 – 35.67
out of the growth target.
17 Rajasthan 541.10 18.33 – – 19.11 – 68.56
Thus as growth does not necessarily ensure equitable distribu-
18 Tamil Nadu 58,500.724 58.44 – – 0.17 3.95 37.44
tion of well-being, the more important questions are how growth
19 Uttarakhand 468.20 6.10 – – – 93.90 --
is achieved and how far it gets distributed and reaches people at a 20 Uttar Pradesh 8,47.6706 37.50 – – 12.23 12.23 38.04
per capita level. A brief mention of the contradictions between 21 West Bengal 521.521 80.81 1.99 – – – 17.20
growth and well-being in China will not be inappropriate here. 22 India 1,26,077.1732
The latter is acclaimed as a country signifying tremendous Source: GoI, 2008.

Special Article
using expensive automated systems by taking capital out of the while production rose from one million tonnes of steel to five
production process (the total capital required was reduced by million tonnes. This means output increased by a factor of five
one-third) and reintroducing a greater role for labour. How was it while employment decreased by a factor of half. Similarly, Tata
done? Between 1998 and 2002, the state-owned enterprises (SOE) Motors in Pune reduced the workforce from 35,000 in 1999 to
reduced their workforce by 1,03,000 and the net loss of manufac- 21,000 in 2004 while increasing production from 1,29,000
turing jobs reached around 15 million. But, inside the SEZs, number vehicles to 3,11,500. Bajaj motor cycle factory in Pune reduced
of jobs, albeit contractual, started to grow. In these zones, overtime the number of workers from 24,000 in the mid-1990s to 10,500 in
is usually compulsory and unpaid. Clark (2008) mentions, for 2004 while doubling the output with the help of Japanese robot-
example, that overtime may last from 6 pm to 6 am in peak seasons ics and Indian information technology [Bhaduri 2008]. In Mahar-
in the toy factories of Donguan in the Pearl River Delta where 80 ashtra, the leading state in terms of foreign direct investment
per cent of the world’s toys are made by 3,00,000 Chinese workers, (FDI), the number of factory workers came down from about 1.22
many of whom are children. A minute’s delay in reporting for million per day in 1989-90 to about 0.77 million per day in
work may reduce pay by two hours and never any compensation 2003-04, although the industrial output increased from around
is given for any work related accident or disease. Non-payment of Rs 78,000 crore in 1992-93 to over Rs 2,36,000 crore in 2003-04.
wages and pension obligations in China have led to fierce labour Even today Maharashtra is the leading state in the factory sector
protests in many areas. In 2002 in the north- eastern city of Liaoyang in terms of investment, gross output and net value added; it is
more than 30,000 workers from some 20 factories protested for only factory employment that has declined [Singhvi 2008].
several days that came to be known as the largest demonstration This is only possible with a huge rise in labour productivity, as
of its kind since the Tiananmen crackdown [Lee 2004]. mentioned earlier, that again is largely contributed by the
What needs to be stressed is that China, one of the world’s unorganised sector accounting for more than 90 per cent of the
fastest growing economies (with 9 per cent growth rate), has also country’s labour force. Ruthless exploitation of labour has thus
become one of the most unequal societies. The benefits of growth become the source of increased corporate profit as well as inter-
have reached only a small section of the urban society. Some national price competitiveness in a globalised world [Bhaduri
studies compare China’s social cleavage unfavourably even with 2008]. While the country’s growth roars ahead at 8 per cent,
Africa’s poorest nations [Wu and Perloff 2004]. Regional growth in regular employment is found to have exceeded not
inequalities, including intra-rural and intra-urban inequalities, even 1 per cent in recent years. Quite logically India accounts for
have intensified in China with a few southern coastal cities the largest number of homeless, illiterate and ill-fed in the world
surging ahead. At the same time, the interior areas and the “rush [Bhaduri 2008]. A culmination of all the above processes, as
belt” of the northern region [Harvey 2005] and many rural areas argued by many, is the recent decision of establishing SEZs – the
get almost no support. They are forced to tax local farmers and largest in number among all countries – that will help the corpo-
impose enormous fees to finance physical and social infra rate sector directly appropriate land and resources and open up
structure like schools, hospitals, road building, even the police. the possibility of having a huge army of cheap labour, a large
Poverty and the resultant unrest are seen to be intensifying.5 section of them comprising the dispossessed. Surveys have found
There have been far-reaching shifts in Indian policy in the last that workers in SEZs work 5.3 per cent more hours than those in
few decades facilitating large-scale entry of global corporate non-SEZs and at hourly wages that are 34 per cent lower [Sen and
capital in almost all economic sectors, downsizing of labour, Dasgupta 2008], obviously to offer labour power at a “competi-
outsourcing of industrial and other economic activities and tive price” in the global production system. To facilitate this, SEZs
promotion of an aggressive urbanisation by modernising cities of are declared as “public utility services” with several exemptions
different size, through direct policy interventions. Such policies from the labour laws, including the Minimum Wages Act and the
are systematically keeping out a large section of the population Contract Labour (Regulation and Abolition) Act, and where
from the growth process, creating a distinct space of the margin- strikes will also be made illegal.
alised that has been steadily on the rise. A close connection is To recall, the Chinese state used its own uneven geographical
seen among these policies and that of the international financial development as a competitive edge over other countries and be-
institutions like the World Bank, the International Monetary came a vociferous partner in facilitating the expansion of global
Fund, Asian Development Bank, the global corporate sector, and capital by using its incredibly low-wage labour advantages. In a
quite significantly, the major capitalist countries. The role of the unique fashion, the state in China internalised welfare arrange-
state has also been redefined into a modern, vociferous one facili- ments and social provisions within provinces, cities and local
tating private sector operation and a developmental governmen- governments and relegated the rural dwellers as the least privileged
tality, a “politically neutral” practice, pitched heavily on the citizens, physically separating them from the urban population
rationality of experts and professionals [Sanyal 2007]. An by introducing residency permit systems. A state-manipulated
increasingly irreversible production structure in favour of the market economy was created that delivered spectacular economic
rich has started consolidating and economic activities catering to growth for a long period for a significant proportion of the popu-
the rich are being handed over to large corporations. Simultane- lation which, however, brought in its wake mounting social
ously a typical jobless growth is seen to flourish. To cite a few inequality, declining per capita foodgrains availability for the
examples: the number of workers in the Jamshedpur steel plant rural masses [Patnaik 2007], severe environmental degradation,
of the Tatas came down from 85,000 in 1991 to 44,000 in 2005 and finally, a revival of capitalist class power [Harvey 2005]. In
Special Article
India too, against a background of pervasive agrarian crisis, been followed in reality, fierce resistance struggles against “land
conversion of farmland into SEZs will clearly aggravate the grab” have erupted in different parts of the country leading to
problems of declining foodgrains availability. Already with a state atrocity and violence.
sharp decline in the public investment rates and public develop-
ment expenditure in the primary sector, the consumption of the Underlying Logic: Legitimising SEZs
poor in the country is sacrificed. The agrarian crisis is getting This brings us to the strategy of negotiating the contradictory
manifested through a sharp increase in the number of landless spaces that are intertwined with the process of establishing these
rural households (in Kerala, the rise was from 5.8 per cent in zones and its underlying logic. A careful analysis of the current
1992 to 38.6 per cent in 2002-03) and the large number of farmer development patterns in the country will make things clearer.
suicides underlying which is a steep fall in the profitability of There are three interrelated issues to take note of. Let us first look
production engineered by neoliberal policies [Patnaik 2008]. at the type of activities being developed in the SEZs. Only 5 per
The nature of the land that is being earmarked for the purpose cent of the approved SEZs [GoI 2008] are multi-product while
of establishing SEZs in different states in India indicates to a large information technology (IT)/information technology enabled
extent the vulnerability of the rural poor engaged in primary services (ITES) SEZs are 62 per cent (Figure 1). According to
activity. The overall trend in all the states has been to acquire Upadhya (2007), providing lucrative employment opportunities
agricultural lands for SEZ activities that are located close to trans- for the above workforce contributes only to the reproduction and
port lines, highways or other infrastructures. Large tracts of land consolidation of the middle/upper class from whom this
in agricultural areas in various states like Maharashtra, Orissa, workforce is drawn. The total employment that the IT/ITES SEZs
Punjab, Haryana, Kerala and West Bengal (including multiple will create is negligible and if the number of potential jobs is put
cropped lands) have been earmarked for the purpose. The above against the volume of investment one finds that one job will
process of acquisition of farmlands for corporate sector, accor require an investment of Rs 1 to 1.5 crore or even more [RUPE
ding to Patnaik (2008), will facilitate the entry of foreign corpo- 2008]. In 2006-07 the IT/ITES sector (including engineering
rates into agriculture and related activities through contract services, R & D and software products) accounted for 4.3 per cent
systems and domestic corporates into urban food retailing by of the country’s GDP, of which 80 per cent was from exports. But
sourcing from agriculture that will aggravate the problem of it accounted for only 0.3 per cent of the country’s employment.
declining foodgrains availability and intensify the problem of Even if employment in this sector doubles by 2010, it will still
unemployment among petty traders, in the long run. Acquiring account for a mere 0.7 per cent of the total employment but
wastelands for SEZs is also not a simple issue. Wastelands (India accounting for more than 6.5 per cent of the country’s GDP which
has 55.2 million ha of wasteland) can be land with scrub, grazing will be nine times its share in the workforce [RUPE 2008]. This is
land, pasture or land on which shifting cultivation is carried out. in addition to the fact that firms in this sector have strong
Who does not know that the poorest and the most marginalised external but weak domestic linkages, with 75 per cent of their
depend on these lands for their survival by way of collecting output exported.
firewood, fodder for animals and minor forest produce? Much of What else can be an enclave within the economy? Larger
the officially declared wastelands are actually common property income generated in this sector will mainly boost demand for
resources [Down to Earth 2006]. To cite examples, in Mahara elite consumption like better housing, automobiles, organised
shtra, ‘dali’ or ‘gairan’ lands, classified as wastelands and now retail, hotels and entertainment, banking and share market-
earmarked for SEZs were being allotted since long to landless related activities, etc, that will generate very low domestic
tribals or dalits for cultivation purposes. Similarly in Gujarat, employment, even though there may be an addition of some
common grazing lands are being taken away. The LAA of 1894 indirect jobs. Its enormous effect on real estate is evident which
seems to have superseded all such rights of the people along with brings us to the second issue, i e, the special status that real estate
relevant progressive legislations like the panchayati raj (73rd enjoys in contemporary times in the country, in general, and in
Amendment) Act of 1992 entitling rights to villagers to decide SEZs, in particular. A major part of the growth envisaged in the
their own course of development or the panchayats (Extension to SEZs is through real estate and infrastructure. Huge tracts of
the Scheduled Areas) Act, 1996 empowering the indigenous lands within SEZs are being reserved for real estate projects
peoples for self-rule. In compensation debates too, the above user involving “luxury constructions” that are being projected as
rights over land are bypassed while only owner rights are infrastructural development. For example, the 5,100 acres of land
mentioned. The preamble to the National Relief and Rehabilita- to be given to the Salim group (of Indonesia) in West Bengal
tion Policy (NRRP), 2007 states that while acquiring land the state where the investors will bring Rs 44,000 crore will mainly go for
needs to minimise displacement and promote, as far as possible, making golf courses, hotels, recreation, commerce and world
non-displacing or least-displacing alternatives for which projects class residential complexes, generating employment to not even
may be set up on waste lands, degraded or unirrigated lands. 5,000 people [Mitra 2006]. The requirement of surplus capital or
Acquisition of agricultural or irrigated land for non-agricultural profit to regenerate itself through fresh investments, given the
use may be kept to the minimum and multi-cropped land may be coercive laws of competition, is thus met through real estate and/
avoided. Also, while acquiring land, adequate rehabilitation or “infrastructure development”.
packages especially for the weaker sections need to be ensured One may recall Baran’s (1958) argument that the effect of
and speedily implemented [NRRP 2007]. As none of these has infrastructural facilities would be nix if they remain alien and do
Special Article
not become a part of an economic environment or a socio- fields lying on its two sides, preventing villagers to reach their
economic structure into which they have been built. In such field located across. The same is the case with the fenced off
cases, they would only accelerate disintegration of the peasant Bangalore-Mysore Infrastructure Corridor Project Expressway.
economy and contribute towards a more intensive mercantile Similar road rage [Low and Banerjee-Guha 2003] is seen in
exploitation of the rural interior. Along with “industrialising” the the reorganisation of intra city transport focusing on flyovers,
countryside, such infrastructural development serves to urbanise metros and elevated channels bypassing the development of the
and modernise the countryside as well, helping in the process, basic public transport system on which more than 80 per cent of
the expansion of the space of consumption. In case of China, “real the residents in each city depends. A surging consumer culture is
estate” development in and around large cities and inside the engulfing these cities [Harvey 2005] in which material manifes-
export processing zones became another privileged path towards tation of inequalities like “gated communities”, “edge cities” of
amassing immense wealth in a few hands. Since peasant culti hi-tech activities, spectacular consumption zones, shopping malls
vators did not hold title to the land, they could easily be dispos- and theme parks heightens the logic of aesthaticising urban
sessed and the land converted to lucrative urban uses, leaving development [Kipfer and Keil 2002] and dissociating it from
the cultivators with no rural base for a livelihood and forcing public discourses. The related cultural implications works
them out of the land and into the labour market. As many as 70 towards justifying a unified urban planning vision that is signifi-
million farmers may have lost their land in this way over the last cant for the construction of hegemony [Lefebvre 1991] and a
decade [Harvey 2005]. Acquisition of peasant lands in India “dominant” culture comprising competition, modernity and
currently for the corporate sector and for SEZs has been identified exploitation [Banerjee-Guha 2002]. With a flexist imposition of
as a new phase of primitive accumulation [Patnaik 2008] whereby global imperatives, these cities act as links between global
lands are used more for real estate development and land specu- capitalist culture and local spatial formations prioritising grandi-
lation than for new manufacturing activities. ose projects of infrastructure, cultural and commercial facilities,
The idea that urban real estate redevelopment has become a all representing gentrification. Perpetrated in the name of urban
central motive force in the age of neoliberalism [Smith 2002], fits planning, in the present time it is helping to reconstitute
well with the fast pace of real estate development in SEZ enclaves bourgeois hegemony and resonate an intensely polarised capita
and in many large cities. The township of New Rajarhat in list urbanisation process having a range of impact. In India, it is
Kolkata, West Bengal, built upon the displacement of an agrarian also reflecting the contradictions of state institutions that are
community or the Maha Mumbai SEZ coming up on agricultural essentially a crystallisation of uneven development, indicating
lands in western Maharashtra in the periphery of Mumbai or the towards a process of “rescaling”, “decentralising”, “localising”
2,500 acre new township being built in the Ghaziabad district of and “internationalising” – a unified and a larger process of neo-
Uttar Pradesh by the real estate developer Ansals are pertinent liberal restructuring of contemporary times. It partly rests on
examples. Merryl Lynch has recently stated that the growth of existing inequalities, but largely on the reproduction of newer
real estate sector in India will be up to $ 90 billion in 2015. In areas of decline and growth, based on contemporary forms of
2005 it was $ 12 billion. economic momentum.
Finally, in close association with the above two, comes the final Together they work towards a process of accumulation by
issue of opening up of the internal market and helping a consumer dispossession at different socio-spatial scales and simultaneously
class grow, mainly in large cities, that would act as a forerunner lend a theoretical justification to contemporary development
of the contemporary modernity and preclude large-scale social patterns. “With its monopoly of violence and definitions of
unrest that may arise out of the displacement and dispossession legality, [the] state plays a crucial role in…promoting these
that the contemporary growth process leads to. Budget allocation processes” [Harvey 2005: 159]. Concomitantly, it brings in its
for large cities is a good indicator to understand this pheno wake, various institutional realignments and political adjust-
menon. Enormous capital is pumped into the cities especially the ments, imposing newer forms of market discipline upon global,
larger metropolises that are experiencing drastic restructuring national and local social formations. Amidst the process of creat-
[Banerjee-Guha 2002] in order to be developed as an ideological ing an “utopia” of a free market, in practice it shows up a dramatic
base of corporate capital that would work towards lending a logic intensification of a coercive disciplinary form of state interven-
to the aggrandisement of economic globalisation in a garb of tion to impose market rule. Interestingly, while the majority of
modernity. One may recall the hype created about the importance the people, by this process, are subjugated to the power of market
of mega cities by the introduction of the Mega City Programme in forces, social protection is kept reserved for the strong [Gill 1995].
1991, that renewed the flow of investment into these cities and As Lipietz (1992) suggests, it is taking place on an aggressively
their regions. The same cities are now in the priority list of the contested institutional landscape in which newly emerging
central government for large-scale gentrification through World “economic spaces” interact conflictually with inherited regulatory
Bank-aided central government’s urban renewal programme, the arrangements, providing a political arena through which
Jawaharlal Nehru Urban Renewal Mission (JNURM). Huge funds subsequent struggles over-accumulation by dispossession and its
are being allocated for the National Highway Project connecting associated contradictions are getting articulated and fought out
larger metropolises and facilitating expansion of interstate [Brenner and Theodore 2002].
automobile travel. The fenced off eight-lane Mumbai-Pune It, therefore, needs emphasis that the contextual embeddedness
Expressway, maintained by a private firm, cuts across agricultural of the above processes as they are being produced within national,
Special Article
regional and local scales in India, are getting defined not only by the Enforcement of market rule over a wider range of social relations
nexus of policy regimes, disciplinary political authorities and their and the impact of the ongoing “creative destruction” of politico-
regulatory practices, but also by resistance struggles, consoli- economic spaces at multiple geographical scales need to be
dated grassroots movements and mobilisation of progressive forces understood in the light of the contradictions generated there
towards challenging the corporatised development paradigm. from. It then becomes clear that the nexus stands challenged.
Notes Berner, E and R Korff (1995): ‘Globalisation and Local Lefebvre, Henri (1991): The Production of Space, trans-
Resistance: The Creation of Localities in Manila lated by D Nicholson-Smith, Blackwell, London.
1 Accumulation by dispossession, according to and Bangkok’, International Journal of Urban and Lipietz, A (1992): ‘A Regulationist Approach to the
David Harvey (2005) can take several forms in Regional Research, Vol 19(2), pp 209-22. Future of Urban Ecology’, Capitalism, Nature,
the present time. Escalating depletion of natural Bourdieu, P (1998): ‘The Essence of Neoliberalism’, Socialism, Vol 3 (3), pp 101-10.
resources like land and water and their privatisa- Le Monde Diplomatique, December. Low, Nicholas and Swapna Banerjee-Guha (2003):
tion, degradation of land and settlements by Bradsher, K (2004): ‘China Reports Economic Growth of ‘Road Rage and Contradictions in Transport
capital intensive farming that results from 9.1 Per Cent in 2003’, New York Times, February 20. Sustainability in Melbourne and Mumbai’, World
commodification of nature, patenting of general
Brenner, N and N Theodore (2002): ‘Cities and Transport Policy and Practice, Vol 9(1).
material and using them against people who
Geographies of Actually Existing Neoliberalism’, Lowe, J (1992): The Secret Empire: How 25 Multinationals
contributed in developing them, corporatisation
Antipode, Vol 34(3), pp 349-79. Rule the World, Business One Irwin, Illinois.
and privatisation of public assets, withdrawal of
social welfare laws (that were earned through Chandoke, N (1991): ‘The Post Colonial City’, Economic Marx, Karl (1967): Capital, Vol 1, New York.
long struggles) protecting labour rights and rights & Political Weekly, Vol 26(50), pp 2868-73. Mitra, Ashok (2006): ‘Etodin Dakey Na Phela Chitthi’,
of the poor, pension benefits, national healthcare China Labour Watch (2004): ‘Mainland China Desh, Vol 73(20), pp 40-47.
all indicate towards practices and policies of dispos- Jobless Situation Grim, Minister Says’, hptt// NRRP (2007): The National Rehabilitation Policy
session pursued in the name of neoliberal ortho- www.chinalabourwatch.org/en/web/article. Report, New Delhi.
doxy. For further clarification, see David Harvey, php’/article_id=50043, November 18.
Patnaik, Prabhat (2006): ‘Some Reflections on China’s
The New Imperialism, Ch 4, Oxford University Press, Conway, Dennis and Nik Heynen (2006): ‘The Ascend-
Economic Performance’, http// www.Networkideas.
UK, 2003. In a recent article on Indian SEZs, ancy of Neoliberalism and Emergence of Contem-
org.news/jan 2007/news31chinaeconomy.htm
Sampat (2008) has clarified the process. porary Globalisation’ in Denis Conway and Nik
Heynen (eds), Globalisation’s Contradictions, Patnaik, Utsa (2007): ‘Neoliberalism and Rural
2 The process denotes removal of all spatial barriers Poverty in India’, Economic & Political Weekly,
to international production and exchange and Routledge, UK.
July 28-August 3.
simultaneously entails space differentiation and Clark, Eric (2008): The Real Toy Story, Free Press,
New York. – (2008): ‘Imperialism, Resources and Food
uneven development to exploit region and country
Cox, H (1999): ‘The Market as God: Living in the Security’ with reference to the Indian Experi-
specific characteristics, such as levels of income,
New Dispensation’, Atlantic Monthly, March, ence’, Human Geography, Vol 1(1), pp 40-53.
wage rate, labour laws, laws related to environ-
mental impact assessment, etc. The upshot is that pp 18-23. Peet, Richard (2002): Geography of Power, Zed Books,
the development of the space economy of capital- Down to Earth (2006): ‘Dual Economy’, Vol 15 (12), New York.
ism is beset by counterposed and contradictory pp 20-29. RUPE (2008): ‘India’s Runaway Growth: Distortion,
tendencies. See Swapna Banerjee-Guha, Spatial Elshoff, P (1988): ‘Unilever in Asian and Pacific Disarticulation and Exclusion,Part II, Acpects of
Dynamics of International Capital, Ch 2, Orient Region’, Somo, Amsterdam. Indian Economy’, No 45, Research Unit for Politi-
Longman, 1997; David Harvey, The Limits to Capital, Ettlinger, N (1990): ‘Worker Displacement and Corpo- cal Economy, Mumbai.
Ch 13, Basil Blackwell, 1982; Henri Lefebvre, The rate Restructuring: A Policy Conscious Appraisal’, Sachs, W (1999): ‘Plant Dialectics: Explorations in
Production of Space, Basil Blackwell, 1991. Economic Geography, Vol 66, pp 67-80. Environment and Development’, Zed Books,
3 The point that needs to be stressed here is that George, S (1999): ‘A Short History of Neoliberalism’, London.
these changes in relative space are neither Paper presented at the Conference on Economic Sanyal, Kalyan (2007): Rethinking Capitalist Develop
accidental nor arbitrary but integral to the Sovereignty in a Globalising World, March 24-26, ment: Primitive Accumulation, Governmentality and
production of the national scale and its differen- Global Policy Forum. www.globalpolicy.org/ Post-Colonial Capitalism, Routledge, New Delhi.
tiation into rising and declining regions. See Neil globliz/econ/histneo l.htm Sampat, P (2008): ‘Special Economic Zones in
Smith, Uneven Development, Ch 5, Basil Blackwell, Gill, S (1995): ‘Globalisation, Market Civilisation and India’, Economic & Political Weekly, Vol 43 (28),
N Y, 1984; Also, A Markusen, Regions: The Econo Disciplinary Neoliberalism’, Millennium, Vol 24, pp 25-30.
mics and Politics of Territory, Rowman and Little- pp 399-423. Sen, Sunanda and Byasdeb Dasgupta (2008): ‘Labour
field, 1987. Gramsci, Antonio (1971): Selections from the Prison under Stress: Finding from a Survey’, Economic &
4 For a detailed analysis on Neoliberalism and China, Notebooks, International Publishers, New York. Political Weekly, Vol 43(3), pp 65-72.
see David Harvey, A Brief History of Neoliberalism, Goldman, Michael (2005): Imperial Nature: The World Singhvi, Sanjay (2008): ‘SEZ as a New Form of
Ch 5, Oxford University Press, 2005. Bank and Struggle for Social Justice in the Age of Colonial Urbanisation: A Study Based on Mahar-
Globalisation, Yale University Press. ashtra’, Red Star, Vol 9 (1), pp 20-22.
Government of India (2007): http://sezindia.nic.in/ Smith, Neil (1984): Uneven Development, Basil Black-
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imagine there no heaven

WHY STUDY DEVELOPMENT THEORIES AS A

| Planning is for Change and in the modern world we talk

CHANGE VS. STABILITY

CHANGE VS. EFFECTIVE CHANGE

| Change is something that is permanent (a

AND SO THERE IS ETHICS OF CHANGE

Major development theories are informed about

| Change, Social Change is viewed with two

EVOLUTIONARY SOCIAL CHANGE PERSPECTIVE

| Very convenient argument for those arguing for a ‘laissez faire’ in

RUPTURE AS A PERSPECTIVE OF SOCIAL CHANGE

| Veryy different from evolutionary y

| Liberal-market theories – These are earlier group of theories.

y Development or progress is equated with economic growth

| The liberal-market and social-market theories

| But, the notion of development is not purely

(i) either through political action by a range of agents

ACTIONS FOR ORDERED CHANGE

i) State action to secure change – Intervention by the

ii) Spontaneous through market – Argues for

Institutions promoting this approach are the

This approach has failed to promise realisation of

iii) Political power for development – Central role

A radical version of this is Marxist version of class

RISE OF SOCIAL SCIENCE

1 Planning is an extension of Social Sciences

2 Rise of social sciences is rooted very much in the

ENLIGHTENMENT MOVEMENTS IN EUROPE

ii) Sir Francis Bacon – Early 17th century.

| He emphasises instrumental role of reason and

ENGLISH ENLIGHTENMENT - ISAAC

The Newtonian science gets tied to the rise of bourgeois

- He believes that the social contract,, that was originally

French Enlightenment was followed by French Revolution,

Same thing happened in UK and liberal democracy began with

SAINT-SIMON – THE FIRST PLANNER (1760-1825)

| Saint-Simon – a French count, named Claude Henri de

- Saint-Simon and his followers envisaged g a society y

- After his death, his followers initiated a journal, Le

ADAM SMITH (1723

| Known for economic thought,

Key ideas of Smith’s economic system are:

d) The notion of spontaneous order whereby the

Impact of Smith’s work on social sciences is that:

Smith was also father of Public Finance, which was

(ii) Tax payers should not be kept in dark about their

Smith s political economy

iv) How were these individual actions ordered (organised) so

Smith’s economics is called classical economics. From

Neo classical economists or what is called the New

iii) Politically, as liberalism offers a balanced solution

According to the New Right, this model is a

These programmes of liberalisation

Dialects is investigation of truths in philosophy. The

- Materialism ((Historical Materialism))

“In the social pproduction of their life,, men ((and women))

Religion is the superstructure

Know a person through his/her actions and not words

Marx has a materialist conception of History, where is

- Marx gave a philosophical and economic critique of the

- Marx’s critique of capitalist economic system is that in

- But, this alienated labour in the capitalist system is