What we can do about our cities?

The Problem

The great cities of our country are overcrowded. The population in each major city exceeds the carrying capacity of public infrastructure such as water, roads, railways, electricity generation and distribution, telephone services, law enforcement, public health services, schools and parks. The poor infrastructure has forced civic authorities to keep FSIs low, which has generated astronomical real estate prices. Life in the great cities is afflicted by slow and uncomfortable commuting, little open space, etc. In all this, some of the worst-off are the slum-dwellers who, in Bombay, account for roughly 40% of the city's population.

Yet, even under the current conditions, migration from rural areas into the cities continues. Every day, there are people in the interiors who are packing their bags and moving to the cities.

What can we do about it?

Improving the cities is not a solution

At one level, it seems clear that larger resources need to be invested into public infrastructure, new methods of raising these resources need to be invented, and efficiencies of utilisation need to be improved. However, a frontal attempt at improving public infrastructure in the cities is clearly the wrong solution. Why is that? There are two reasons. First, the size of resources required to truly solve the problems of the cities are staggering, and it is not clear where such funds will come from. But more important is the uniquely perverse feature of this problem: if we improve life in the cities, more migrants will come. This is perhaps like the slum relocation schemes in Bombay: the announcement that slum dwellers might get flats has been a magnet attracting potential migrants from all over the country into the slums of Bombay.

In this sense, an attempt at improving life in the cities is doomed to be a losing battle against a huge influx of migrants: every time a city obtains good urban infrastructure, it will be overpowered by a flood of migration into it. Draconian measures such as restrictions upon migrations are proposed from time to time, but they are only implementable in a Police State. In keeping with the vision of India as a liberal democracy, there simply cannot be any barriers upon the movement of people.

A Fresh Approach

To start afresh, let us ask why people migrate to cities, and equivalently, why flat-owning Bombayites do not sell out and move to much more luxurious accomodations (say) in Vashi or Poona or Baroda. The main answer would be: because the job opportunities are in Bombay.

The people are in Bombay because the firms are in Bombay, and every day, more new companies are coming up in Bombay, even in the face of astronomical real estate prices.

What brings the firms to Bombay, even though the labour and real estate costs of operating in Bombay are so much higher? It has got to be the case that there are critical business reasons for being in Bombay. The entire web of business connections, from suppliers to customers, is all in Bombay, and if a company were to move outside Bombay, it would be enormously hampered in its ability to do business. That is what forces existing companies to stay in Bombay, and that is what causes new companies to choose Bombay as a location, even in the face of absurd costs. The choices made by firms determine demand for labour, and that is what brings so many people into Bombay.

The most important link in this story, where public policy can make a difference, is the ``critical business reasons for being in Bombay''. If it were possible to build tremendous transport and communications facilities from the mainland to Bombay, then it would not be so critical for firms to be located in Bombay. They would be able to choose to operate (say) 50 kilometres away, but still be able to do business with suppliers and customers in Bombay, provided the transport and communications facilities were good enough.

What kinds of facilities could possibly accomplish this? In the case of Bombay, it would require expressways and railways connecting south Bombay to the mainland, and reliable local telephones in the outlying areas. Internet connectivity over high-speed data links would enable messaging, videoconferencing, etc.

Once these kinds of facilities are available in the mainland, firms would no longer be at a major disability by not being in Bombay. An expressway means that you can be 50 kilometres from city center, but still be able to get there within thirty minutes, should the need arise. Today, people who work in Prabhadevi can meet someone in Fort (15 kilometres away) over lunch, and get back to their offices to continue their day. With an expressway connecting south Bombay to the mainland, the same would be possible for people working in Panvel (50 km. away). High-speed computer links and videoconferencing would enable firms to move backoffices to the mainland while keeping a skeletal presence in the city.

Once being away from Bombay is a credible option in terms of making business sense, the enormous real estate and labour costs of being in Bombay would kick in -- firms would prefer to move out in order to reduce costs. Labour would follow the firms, thus easing the pressure on Bombay. There would still be plenty to do in terms of improving the life of citizens in Bombay, but it would be less of a losing battle against increasing migration.

In Conclusion

The key argument here is that to improve the quality of life in Bombay, we need to invest not in facilities within Bombay, not even in facilities within New Bombay and similar mainland alternatives, but instead into the links between Bombay and the mainland. This would mean developing transport and communications facilities to locations like Vashi, New Bombay, Vasai, Uran, and Poona. One implication of this argument is that the resources that are being put into building concrete roads in Bombay are better spent building transport and communications facilities which would link Bombay with outlying areas.

This perspective may seem mildly out of ordinary. However, it is exactly the experience of the great cities of the US after the freeways were built. When freeways came to exist, it suddenly became possible to live 50 kilometres away from city center and still be within practical reach of it. People preferred to live further and further away in search of silence, isolation, clean air, and spacious homes. Firms found that they could reduce costs by not being in city center, while still not being at a penalty in terms of business competitiveness, and firms followed households into the outlying areas in selling personal services. This generated a massive ``suburb-isation'' of the cities, so that today only the poorest people are left actually living near the city center -- everyone else prefers to escape the cities. In the 1950s, 70% of jobs in the cities of the US were located in the city centre -- this is perhaps similar to the situation in Bombay today. This percentage had dropped to 45% as of 1990.

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