Formality and functionality in Indian cities

PARTHA MUKHOPADHYAY

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‘...vous savez, c’est toujours la vie qui a raison, l’architecte qui a tort...

– Charles-Édouard Jeanneret1

THERE are a number of issues that need to be debated about India’s urbanization. While the popular perception is that of a deluge of migrants into urban areas, others (I among them) are concerned that our urbanization is too slow. There are questions of location – whether we seek to concentrate regional development and move people to jobs or continue with our strategy of evening the regional spread and try to move jobs to people. Even if one accepts concentration, should it be done as in the Delhi-Mumbai Industrial Corridor, or should it follow the model of expanding existing urban areas, like Bangalore and Hyderabad, each of whom today have a development authority that oversees an area around twice the size of Goa? How should the cities themselves be; should they be sprawling garden cities like those in America or more compact? And the question that we address here: what is the role of formality, of planning?

What is a formal city? To most of us, it is a city that grows according to a master plan. Ever so often, one notices groups complaining vigorously about the violations of the master plan. For people who have benefited from the unshackling of planning over the last two decades, this attachment to the master plan (and indeed it is the same people) is touching in its faith.

Oddly enough, this notion of a master plan is of relatively recent vintage, dating to the middle of the last century. Its provenance is often attributed to the CIAM (Congrès internationaux d’architecture moderne) or International Congress of Modern Architecture, which was established in 1928 and dissolved in 1959. In particular, it draws upon ideas for planning and construction of cities codified in the La Charte d’Athènes (The Athens Charter), published by Le Corbusier in 1943. This proposed the creation of independent zones in the city for the functions of residence, work, and leisure, to be connected by personal transport infrastructure. The Athens Charter draws upon the discussions of the fourth CIAM Congress in 1933 on the La ville fonctionnelle (The Functional City), though there is continuing debate on the extent to which Le Corbusier adapted the CIAM’s findings.2 

This vision of an ordered city is both native and alien to India. As Khilnani3 lucidly documents, despite evidence of grid planning in the Harappan civilization and the planning seen in walled cities across dynasties and geographies, the planned Indian city was a colonial construct, largely for their own comfort and familiarity. As for the poor, ‘The British idea of a modern city was meaningless; it never reached them.’

Yet it is this conception, mediated by colonial and Indian civil servants like A.L. Fletcher, P.L. Verma and P.N. Thapar, architects like Albert Mayer and Maciej Nowicki, the celebrated Le Corbusier and even Jawaharlal Nehru himself,4 that finds expression in a city like Chandigarh – the most ordered and formal of our urban environments and codified in its governing document, The Establishment Statute of the Land. Regardless, today, even in Chandigarh, as Jagdish Sagar candidly observes, the administration ‘finds itself in a state of unending strategic retreat.’5 

 

As we mark the fifth anniversary of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the first major initiative that is attempting to shape our cities and discuss the Rajiv Awas Yojana’s renewed promise of a ‘slum-free India’, it is pertinent to ask whether this formal city is today also a functional city, as initially envisaged. Le Corbusier, in articulating his vision of the ‘functional city’ was responding to the challenges of his time and place, an oppressive world of early industrial capitalism, recovering from the First World War, with the alluring promise of socialism at its borders – a world into which automobiles had just emerged. That we still continue to follow these principles may be a more a testimony to the hysteresis in our thinking than to the relevance of such concepts for the functioning of our cities today.

 

Even Le Corbusier, credited with reconceiving the house as ‘a machine to live in’, recognized that ‘since men also have hearts, we have also... to ensure that men with hearts would be able to live happily in our houses.’6 It is this spirit that prompted him to make the statement quoted at the beginning of this article. It is this recognition of the city as a dynamic space and the needs of its residents as the prime determinant of its functionality that we need to re-introduce into the urban discourse.

Today, as we recognize cities as the engine of growth in the current economic dispensation, it is useful to consider the truism that the informal segment of our cities is the ultimate market-driven response. Without a demand for its products or services, it would cease to exist. As such, by its very existence, it asserts its functionality, its relevance for the city.

 

Informality is as much a tool of the poor as it is of the rich. Consider the manner in which cars are parked in Delhi. Most of them use street parking, using public space in a manner reminiscent of jhuggi jhopdis. This is in part because the designated parking areas have been used for a different purpose and more because the number of cars (1.7 million at last count) far exceeds the planned (formal) number of such spaces.

Assume that about three-fourths of these cars are parked on the street. If so, these cars, at a conservative 11 square metres per car,7 would occupy about 15 million square metres or over 3700 acres of land. While there is little information about how much land is occupied by jhuggi jhopdis, figures from the Delhi Urban Environment and Infrastructure Improvement Project in 2001, reproduced in the City Development Plan for Delhi, estimated that 2391 acres was occupied by such clusters.

It seems fair to say that the land occupied by illegally parked cars in Delhi considerably exceeds the land occupied by JJ clusters. Yet, no one calls this behaviour informal or threatens to evict or relocate the cars.8 This impression is buttressed when one considers that the number of floors in many plots of most colonies of Delhi were at any given point of time more than what was allowed initially. Over time, in the name of relieving the housing shortage, the allowable number of units and height has been increased, thus legalizing what was initially disallowed under the plan. Every such instance is a triumph of informal functionality over formal planning. Ergo, much that is ostensibly formal now has been informal at various points of time.

 

So, is informality then about occupations like ‘casual work and petty trading’,9 activities that occur from shifting locations, without a permanent place of activity? This is however a small portion of activity, undertaken by about 5% of the urban male workforce and 2% of the female workforce, though casual labour comprises about 14% of the workforce. While significant, they are unlikely to be the reason that informality looms large in the urban imagination in India. Or is informality more broadly about low-earning activities that are also low-productivity, indeed possibly with negative marginal product, i.e., ‘make work jobs’ created not by the government by a social process, an urban version of surplus labour?

If it were so, it would make the informal sector dysfunctional for the city. Removing it would cause no harm, and may indeed improve the overall productivity of the city. This is a harder argument to rebut, but I would argue that the facts militate against such an interpretation.

 

The National Sample Survey defines informal sector to cover ‘proprietary and partnership enterprises.’10 Another linked approach would be to associate informality with self-employment. This is not a complete characterization. While much of the self-employment is in ‘proprietary and partnership enterprises’ (almost by definition), there is significant use of regular and casual wage labour in these enterprises too. Despite these limitations, use of this approach, similar in spirit to that of the National Commission for Enterprises in the Unorganized Sector, allows the elucidation of a number of facets of this sector in the urban context.

Table 1 shows the share of different segments of the labour market, e.g., the casual male informal labour or the formal female regular wage segment as a proportion of the total labour force in the city. Thus, one can state that 33.7% of the total urban labour force are men who are self-employed in the ‘informal sector’ and 4.0% of the total workforce are women who earn regular wages in the formal sector.

TABLE 1

Structure of the Urban Labour Market 2004-05

 

Male

Female

Total Employed (million)

 

Self-Employed

Regular Wage

Casual Labour

Total

Self-Employed

Regular Wage

Casual Labour

Total

 

Formal

1.0%

17.5%

1.6%

20.1%

0.3%

4.0%

0.3%

4.6%

20.86

Informal

33.7%

16.4%

9.5%

59.6%

9.3%

4.3%

2.1%

15.7%

63.58

Total

34.6%

33.9%

11.1%

79.7%

9.6%

8.2%

2.5%

20.3%

84.43

Source: National Sample Survey 61st round.

One can see a similarity between the broad employment structure of the male and female workforce (this is also true when one looks at industry specific data, i.e., the share of men and women in the informal sector do not vary much across different industry groups). The proportion of men and women as a share of the total male and female workforce in various segments is broadly similar. Of the 75.3% of the workforce that is informal, about 20.7% or a little more than a fourth of the informal workforce earns regular wages, while another 11.6%, i.e., over one-sixth, are casual wage labour. As such, less than three-fifths of the informal workforce is actually self-employed, the rest earns wages.

 

There is a remarkable stability in the structure of employment among urban male workers, who comprise about 80% of the urban workforce today. Figure 1 plots the share of three selected segments, e.g., share of male self-employed among all employed males in urban areas, female self-employed and female casual workers among all employed females in urban areas, over the various NSS rounds. Over the last twenty five years, around 42% of male workers in urban areas have been self-employed. An equivalent share earns regular wages, while the remaining one sixth or so are casual labourers. This stability is not seen in the female workforce, where the share of self-employment has grown steadily and strongly over time, taking share away from both casual and wage employment.

FIGURE 1

Evolution of Employment 1983-2006 (%age of male/female labour force)

Source: NSS Report No. 531: Employment and Unemployment Situation in India: July 2007-June 2008, p. 39.

There is, however, some difference across cities of different sizes. Figure 2 illustrates this. It plots the share of self-employed, casual and regular wage labour for urban males across three sizes of cities, less than 50,000 in population, between 50,000 and one million and more than a million. The larger cities have a higher proportion of regular wage employees (over half) as compared to the smaller cities (about a third). There has been limited change over 1993-94 to 1999-2000, in this feature, though it appears as if the larger metros are becoming slightly less wage-oriented.11 

 

As seen from Table 2, about half of the informal urban male workforce12 is in the core areas of manufacturing, construction and transport. Another third is in trade, making a total of over 80% in these four areas. More than three-fourths of the employment in these sectors is in the informal segment. For the women, these sectors comprise 62% of informal employment. Thus, the number is similar, if one adds employment in private households, i.e., household maids, which accounts for 17% of total informal female employment.

TABLE 2

Industrial Structure of Urban Work

 

Male

Female

 

Share of Sector in Segment

Share of Informal Segment

Share of Sector in Segment

Share of Informal Segment

 

Informal

Formal

Informal

Formal

Wholesale and Retail Trade

34%

4%

97%

14%

2%

97%

Manufacturing

26%

22%

79%

41%

13%

91%

Construction

11%

5%

88%

5%

2%

90%

Transport, Storage and Communications

11%

12%

75%

1%

4%

49%

Hotel and Restaurant

5%

1%

95%

4%

0%

97%

Real Estate, Renting and Business Activities

4%

4%

78%

2%

3%

64%

Other Community, Social and Personal Service Activities

4%

2%

82%

5%

2%

90%

Education

2%

10%

34%

8%

36%

42%

Financial Intermediation

1%

7%

29%

0%

7%

18%

Health and Social Work

1%

3%

55%

2%

11%

42%

Private Households with Employed Persons

1%

0%

99%

17%

1%

98%

Mining and Quarrying

0%

3%

25%

0%

1%

43%

Electricity, Gas, Water Supply

0%

3%

9%

0%

1%

2%

Public Administration and Defence

0%

25%

1%

0%

17%

1%

Source: NSS Report No. 519: Informal Sector and Conditions of Employment in India,v2004-05.

While manufacturing and transport, storage and communication form an integral part of the formal segment, more than half the formal employment for both men and women are in public administration, financial intermediation and education, where the informal contribution is limited (with the notable exception of women in education).

 

Thus, the formal and informal segments appear to address different elements of the urban economy. While the formal segment is focused on key services like finance, education and governance, the informal segment tends to trade, construction as well as transport and manufacturing, where the formal segment also has a significant share.

FIGURE 2

Employment Structure Across City Sizes (%age)

Source: NSS 50th and 55th rounds.

The closest that the segment comes to the description of a ‘make work’ sector is the trading sector, where three-fourths of the workers were self-employed. However, it is not quite clear how much of this is ‘make work’.13 For the rest, it is difficult to accept the ‘make work’ classification.

 

An organic shift may, however, be taking place. Two states, Gujarat and Haryana, have shown remarkable growth in their urban manufacturing sector over the period 1999-2000 to 2007-08, with a sharply rising share of urban male workforce in manufacturing. As Figure 3A shows, the share of manufacturing rose by 12.6 and 8.6 percentage points among urban males in the workforce over the period 1999-2000 to 2007-08 in Gujarat and Haryana respectively, largely taking share away from traditional services like trade, hotels and transport and construction and also public services in Gujarat. Over this same period the industrial structure of the overall urban Indian male workforce barely changed.

TABLE 3

Places of Work for the Informal Sector

 

Male

Female

Total

Own dwelling

13.1%

53.5%

20.8%

Employer’s dwelling

2.4%

2.7%

2.5%

Street with fixed location

4.2%

2.6%

3.9%

Street without fixed location

6.6%

3.3%

5.9%

Own enterprise, but outside own dwelling

29.0%

11.1%

25.6%

Employer’s enterprise, but outside dwelling

32.3%

20.3%

30.0%

Construction site

9.1%

4.9%

8.3%

Others

3.2%

1.7%

2.9%

Source: NSS Report No. 519: Informal Sector and Conditions of Employment in India, 2004-05.

The second panel, Figure 3B, shows the accompanying change in the nature of employment over the same period. As can be seen, in both these states, the share of regular employment increased. Here too, over this period, the structure of overall Indian workforce barely budged. Of course, as we have seen in Table 1, a lot of the informal sector also comprises regular wage employment. So, a rise in wage employment may not simply imply a decline in the informal sector, but would appear to indicate that there may be something going on in those urban areas where manufacturing is growing rapidly, as in Gujarat and Haryana.

 

Taken together, this indicates that the informal sector is very much an integral part of our urban employment, and by inference, the urban economy. The evidence for this becomes stronger when one looks at the industrial distribution of the informal sector. Rather than being a peripheral part of the city, engaging in low productivity trading and low demand services, the informal sector sits at the heart of the city’s economy and is closely linked to the formal economy.

FIGURE 3A

Change in Sector Composition of Urban Male Workers (1999-00 to 2007-08)

FIGURE 3B

Change in Form of Employment for Urban Male Workers (1999-00 to 2007-08)

Source: National Sample Survey 55th and 64th rounds.

Once we accept that much of our urban economic activity is informal (in the sense that it is undertaken by proprietary and partnership enterprises) and productive, as argued above, what is the implication for urban policy?

First, for cities, it would be useful to obtain a spatial picture of this economic activity. Where does it take place? Table 3 details the places of work for urban males and females in the informal segment. As can be seen, nearly a quarter (23.3%) of the workforce works out of their own dwellings or an employer’s dwelling (this does not include maids, etc.). Another 9.8% of the workforce works on the street. As such, a third of the workforce pursues its activity in places that are not traditionally considered to be workplaces.

 

Furthermore, as can be expected from this pattern, many people stay close to workplaces. Indeed, in cities like Delhi, it appears that people may be moving closer to work, while in Chandigarh, the opposite effect seems to be happening. However, it does appear that even while this concentration is occurring, the distances involved are not always walkable.

FIGURE 4

Change in Distances for Place of Work 2002 to 2008-09 (km)

Source: National Sample Survey 58th and 65th rounds.

Across urban India, Figure 4 shows that over a third (35%) of the households either work at home or live within a kilometre of their workplace. This proportion is somewhat lower in cities like Chandigarh (28%) and Delhi (26%). Concomitantly, about a sixth of the workers live more than 10 km away from their workplace, a bit more in places like Delhi (19%) and Chandigarh (18%). The rest of the households stay between 1 to 10 km from their workplace.

Does Expanding BKC into Dharavi Make Economic Sense?

DOES the demolition of a part of Dharavi to expand the Bandra Kurla Complex (BKC) add value to Mumbai? From a purely economic cost benefit analysis, it may well not do so.

The benefits of locating a new development in Dharavi is not the entire value added generated from the BKC expansion. It is rather the extra amount generated by locating it in Dharavi, rather than in some other location.* Similarly, the costs of taking out a part of Dharavi may not be limited to the loss of economic activity in that part. The economy of Dharavi is an inter-connected network. If a sufficiently large portion is removed, other parts will be affected – indeed, at the extreme, the entire economic basis for Dharavi may disappear. Relocating the entire Dharavi economy either spontaneously or in an assisted manner may not be feasible, because it would be difficult to replicate the agglomeration and infrastructure characteristics of Dharavi. If so, the costs of locating a BKC expansion in a part of Dharavi is not just the value added generated by the section that is taken over, but possibly the entire value added of Dharavi itself.

Now, if one compares the extra amount generated by locating a BKC expansion in Dharavi, rather than in some other location in Mumbai, vis-à-vis the entire economic value added in Dharavi (less the costs in the other location), it is not clear that the benefits outweigh the costs.

 

* This would be the benefits of proximity to BKC, but BKC itself did just fine though it was removed from Nariman Point. Indeed, it helped to make Mumbai more polycentric. Now, when the plans are to build a new airport in New Mumbai and a bridge to link the two cities, one can also ask whether locating the centre in New Mumbai to generate agglomeration economies may be more sensible.

 

How should these features inform our urban policies? Housing is now one of the core focus areas of urban policy under the Rajiv Awas Yojana (RAY). It is not yet clear whether this involves transformation of existing slums so that they are no longer slums, making the city slum free or the actual relocation of slums to release commercially valuable land that can then be sold to partly finance the relocation process (see Box for situations when this may not be economically beneficial). In practice, it would possibly be a mix of these approaches, but the choice could have significant consequences.

First, as we have seen, people live close to work. Hence, relocation involves distancing from existing workplaces. In principle, this could be partially substituted with frequent and inexpensive public transport.

Second, we have also seen that about a quarter of the workforce, and more than half the women workers in the informal sector work at home. This has implications for design of houses, for land use regulations and for location, were such work to continue to be viable. Simply put, making India slum free is not about simply providing houses to live in, people must also be able to work in them.

It is critical to realize that the viability of such work is not important just for the households undertaking the work, which of course it is, but it could be equally critical to the broader economy of the city. In the preceding pages, it has been argued that the informal economy is knit relatively closely with the rest of the city’s economy, given the strong presence of the informal segment in key sectors like manufacturing, transport, etc. One example of this connection was apparent recently during the Commonwealth Games in Delhi, when it was reported that worker flight emanating from fears of police harassment affected production in auto components, apparel and consumer electronics industries.14

 

Next, consider the much heralded JNNURM. Till date, much of the emphasis of JNNURM has been on water supply, sewerage and drainage, with the odd flyover thrown in, but its most visible aspect has been transport, with bright new buses sporting the JNNURM logo visible in almost all the sixty odd cities that the programme is active in. These buses were not part of the original JNNURM focus, where transport, as such, was an afterthought.

In large polycentric cities like ours, a key focus of city investment needs to be an inexpensive, flexible, ubiquitous and interchangeable directional public transport. The aim should be to facilitate users to go from anywhere to anywhere with easy and costless interchanges. Low capacity inexpensive transport modes are an essential supplement. Instead, in a city like Delhi, the number of autorickshaws has fallen over the decade and the licensing regime makes them more expensive than a compact car. But even today the focus of the JNNURM is much more on initiatives like the Bus Rapid Transit or even Metro rail projects in cities where a basic public transport system is yet to take root.

In this context, it is instructive to consider the opportunity cost of an urban metro rail project. The typical cost of an urban metro rail project is Rs 200 crore per km. At Rs 800 per square foot, a 250 sq ft unit would cost Rs 200,000, i.e., about 10,000 units could be built for that amount, not including the cost of land.15 It is not the contention that a metro rail system is not needed – in many cities it can be a necessary part of an integrated transport system. However, in an archetypal Indian city where a third of the workforce is working from home and a significant proportion of workforce is informal and earns less than what it would take to ride the metro (assuming existing fare policies continue), the opportunity cost of 10,000 housing units per kilometre of metro rail is one that should be considered.

 

The informal sector is an integral and necessary part of the urban economy as it exists today – not just for itself but also for the ‘formal’ economy of the city, in both services and manufacturing. Urban policies, however, either tend to ignore the needs of the sector or worse, try to uproot it in an ineffective and often dysfunctional effort to implement formal guidelines. In doing so, they may be cutting the very branch they are sitting on, for the informal city is very much the functioning city. As investment into urban areas increases, interventions, especially in housing, transport and land use have the potential to affect the viability of informal economic activity negatively. This will affect not just the informal segment but also the rest of the city. A more thoughtful and inclusive urban policy with less focus on the formal and little more attention to functionality, will thus not only enhance equity but also growth.

 

Footnotes:

1. ‘You know, it is always life that is right and the architect who is wrong.’ Le Corbusier (earlier known as Charles-Édouard Jeanneret), when confronted with the changes that residents had made to his housing project at Pessac. See Philippe Boudon, Lived-in Architecture: Le Corbusier’s Pessac Revisited (translated by Gerald Onn), MIT Press, October 1979,

2. In particular, the following articles 77 and 78 in the La Charte d’Athènes, viz.: ‘les clefs de l’urbanisme sont dans les quatre fonctions : habiter, travailler, se récréer (dans les heures libres), circuler’ (The key of urbanism is in the four functions: to live, to work, recreation – in free time – to move) and ‘Les plans déterminent la structure de chacun des secteurs attribués aux quatre fonctions-clefs et ils fixeront leur emplacement respectif dans l’ensemble’ (The plan determines the structure of each sector attributable to the four key functions and it will determine their respective locations with respect to the whole [city]) do not find clear mention in CIAM’s discussions. See Elson Manoel Pereira, Histoire d’un outil d’aménagement: le zonage – l’exemple d’une ville brésilienne (History as a tool of organization of urban spaces: zoning – the example of a Brazilian city), thesis presented to the University Pierre Mendes France, 1999 (Grenoble II).

3. See Sunil Khilnani, The Idea of India. Penguin, New Delhi, 1997, especially Chapter 3.

4. For an engaging account, see Nihal Perera, ‘Contesting Visions: Hybridity, Liminality and Authorship of the Chandigarh Plan’, Planning Perspectives 19, April 2004, 175-199.

5. Jagdish Sagar, ‘Revisiting Chandigarh’, in Hubert-Jan Henket (ed.), Back from Utopia: The Challenge of the Modern Movement. Hilde Heynen 010 Publishers, Rotterdam, 2002, pp. 368-375.

6. Le Corbusier’s dedication speech at Pessac in 1926, quoted in Ada Louise Huxtable, ‘Le Corbusier’s Housing Project: Flexible Enough To Endure’, The New York Times, 15 March 1981. http://www.nytimes.com/1981/03/15/arts/architecture-view-le-corbusier-s-housing-project-flexible-enough-endure-ada.html

7. Assume a car of dimensions of 4 metres by 1.5 metres, roughly the size of a Indigo. Add an extra 1.5 metres for space before and after the car and about 0.25 metres each on both sides of the car (a tight squeeze) and you have 11 square metres per car. The Delhi Economic Survey 2008-09 estimates a total of 1.73 million cars.

8. Condominium complexes in developments like Gurgaon do, however, evict cars that do not occupy planned parking spaces, as do most ‘world-class cities’. In this narrow sense, the enforcement of rules is more equitable.

9. A popular impression even today, as for example in Mila Freire, ‘Urban Planning: Challenges for Developing Countries’, presented at the 1st International Congress on Human Development, Madrid, 2006, accessed from: http://www.reduniversitaria.es/ficheros/Mila%20Freire%28i%29.pdf

10. See, for example, Government of India, NSS Report No. 519: Informal Sector and Conditions of Employment in India, 2004-05. Ministry of Statistics and Programme Implementation, April 2007, p. iv.

11. Size wise information for the latest round of employment and unemployment does not seem readily available.

12. For ease of exposition, the focus is on the urban male workforce that constitutes four-fifths of the total workforce, and gender differences are mentioned when significant.

13. For comparison, for the EU (27 countries) as a whole, 18% of employment in wholesale and retail trade, transport and hotels was self-employment, while it was 35% in Mexico. For India, the comparable figure is 63%. OECD data from http://stats.oecd.org/Index. aspx? datasetcode=SNA_TABLE3

14. See Yogita Seth Sharma, ‘Flight of Workers Hits Businesses’, Financial Chronicle, 4 October 2010. http://www.mydigitalfc. com/companies/flight-workers-hits-businesses-230

15. With a Floor Area Ratio of around four, one would need about 60,000 sq metres or 15 acres of land, which is about the same as a one kilometre metro rail with a 60 metre right of way.

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