Section – 8

APPENDICES

Appendix - A

Previous Research/Studies

A.1 Roberts and Kanaly (2006) in Urbanization and Sustainability in Asia: Case Studies of Good Practice, a publication by Asian Development Bank/Cities Alliance state:

Urbanization in Asia is proceeding at a scale that is unprecedented in human history. This creates many challenges, especially about how, in a sustainable way, to feed, shelter, and generate employment for an estimated 1.1 billion people projected to be added to the population of Asian cities in the next 25 years. Given the weakness of governance structures, the appalling environmental conditions that already exist in many cities, and existing infrastructure and service shortfalls, meeting the needs of these people appears an almost impossible task for many nations in Asia.

Urbanization is also causing problems for rural development. There is a growing loss of productive agricultural land to peri-urban development and urbanization is increasing pressures for structural reform in agriculture. The benefits that larger cities offer in opportunities for higher education, health services, employment, and higher wages are making it difficult for rural areas to compete and attract skilled persons to support development. The challenges in achieving more balanced and sustainable urban and rural development in Asian countries are enormous, but they are not insurmountable.

While in some respects urbanization today is not much different to urbanization in the past, what is unprecedented is the absolute size of the change - the number of countries undergoing rapid urbanization, the number of cities that are growing rapidly, and the sheer number of people involved (World Resources Institute 1996)

The authors list of URBANIZATION ISSUES includes Urbanization and the Economy, Global Sustainability, Land (most congested cities), Shelter, Infrastructure, Social Change, Poverty, Environmental Issues, Urban Finance, and Governance. While the problems are daunting, the authors of this book remain optimistic.

The case studies clearly illustrate the damaging effects of poorly functioning land markets and inadequate land titling on local economic development and the performance of local government. Well-managed land markets are a primary factor contributing to the success of urban development in Hong Kong, Malaysia and Singapore.

The last chapter on Lessons and Strategies for Sustainable Urban Futures opens with this observation: "Asia's future is urban. It is in developing sustainable cities. Urbanization is both driven by and supports economic growth." While this very true, it is also to be recognized that building mega-cities is not the sustainable way to go. The only way to assure sustainability is to encourage the development of smaller and geographically distributed urban areas.

Points to note : It is true that Asia's (or, for that matter, the entire developing world's) future is urban. If the success of Hong Kong, Malaysia and Singapore is to be replicated elsewhere, the land use and land markets should be well-managed.

A.2 Hoornweg, Nunez, Freire, Palugyai, Villaveces, and Herrera (2007), in their WB Policy Working Paper WPS4114, state the following, among other things:

1. Growth of small and intermediate cities: This will be the source of most future urban growth. Already more than 53 percent of the world's urban population lives in cities of fewer than 500,000 inhabitants, and another 22 percent lives in cities of 1 to 5 million people.

2. Mega-cities will grow as well: The number of "metacities", those with over 20 million inhabitants, and "mega-cities", those with more than 10 million inhabitants, is growing. By 2020 all but four of the world's largest cities will be in developing countries. Managing these large urban agglomerations is particularly challenging. Increased metropolitanization and innovative and more decentralized forms of governance are needed for these large cities. Specialized or differentiated city indicators are likely to also be needed for these large cities.

3. The vanishing urban-rural divide: The old city-rural dichotomy is increasingly disappearing. Urbanization will bring about increased rural specialization, absorb the rural labor force, and provide the services that the rural economy needs to flourish. From the social perspective, often the best way to address a rural issue is through a nearby city.

Points to note: While mega-cities may continue to grow (perhaps at a lower pace than before), the growth of smaller cities will become the focus of planning. This would indicate the disappearance of urban-rural divide. The best way to address a rural issue is through a nearby city.

A.3 Tibaijuka (2007), Executive Director, UN-HABITAT, in her Foreword to State of the World 2007: Our Urban Future - A Worldwatch Institute Report, says:

Though urbanization has stabilized in the Americas and Europe, with about 75 percent of the population living in urban areas, Africa and Asia are in for major demographic shifts. Only about 35 percent of their populations are urban, but it is predicted that this figure will jump to 50 percent by 2030. The result is already there for all to see: chaotic cities surrounded by slums and squatter settlements.

Points to note: Like the Americas and Europe are already urban, the rest of world's future is urban. This reiterates the conclusion of ADB-Cities Alliance referred to earlier in A.1.

Appendix - B

Past Development Initiatives

B.1 National Urban Renewal Mission - NURM

This is an intitiative by the Central (Federal) Government of India. Roberts and Kanaley (2006) provide a brief summary of the mission as follows:

On 28 February 2005, the central government announced the launch of the National Urban Renewal Mission (NURM), with a proposed outlay of Rs500 billion ($11.5 billion), arguing that India was faced with the challenge of urbanization that had to be met by providing urban facilities of satisfactory standards. NURM aims to respond directly to the myriad problems that cities and towns in India had faced in recent decades with regard to supply of basic urban services, such as water supply, sewerage and drainage network, garbage disposal facilities, city-wide roads, public safety systems, and pedestrian pathways; supply of land and housing. The project-based approach followed earlier ignored the importance of sustainable delivery of services. Following the country's transition toward a market-based economy, there is a growing recognition that statutes concerned with urban development need to be reviewed and changed because they do not permit expansion of the land and housing markets. It is evident that the Urban Land (Ceilings and Regulation) Act, 1976, and rent control laws are major impediments to the development of land and property markets, and constitute a deterrent to economic growth.

The Mission encourages states/cities to undertake fiscal, financial, and institutional changes required to create efficient and equitable urban centers. It intends to free land and housing markets from the constraints of age-old statutes, adjust infrastructure tariffs and prices to the cost of service provision in conjunction with local tax reform to meet the cost of joint services, and introduce accountability and responsiveness in municipal governments. NURM seeks to make fuller use of the energy and initiative of the private sector in implementing its reform agenda. The Mission entitles 63 cities to receive financial aid from the central Government for infrastructure projects and to simultaneously initiate the process of reforms.

NURM is a testimony to the fact that sustainable urban development is a complex activity and a function of several factors related to statutory, institutional, fiscal, and pricing spheres. For India, currently in the throes of an urban transition in which its urban population base is poised to add more than 250 million persons during 2005-2030·the impediments to sustainable growth should be identified and adequately addressed, not by taking up isolated projects but by effecting structural and systemic improvements.

This mission is urban-centric and not holistic.

B.2 Bharat Nirman (Building India) Initiative

The Government of India (2005) developed this plan with six major components as detailed below.

Roads: Provide road connections to +38,484 villages above 1000 population and all 20,867 habitations above 500 population in hilly and tribal areas.
Telephone Connections: Provide telephone connection to 66,822 number of villages without a telephone and replace presently dysfunctional systems.
Irrigation: Create 10million hectare of irrigation potential: 6 million hectare from major and medium projects, 3 million hectare for ground water development and 1 million hectare for minor irrigation projects.
Water Supply: Cover of 55,067 uncovered habitations. Provide additional coverage to 2.8 lakh habitations that have slipped back from full coverage. Provide potable water in 2,16,968 villages affected by poor water quality
Housing: Provide 60 lakh houses at the rate of 15 lakh houses each year to be built by funds allocated to the homeless through Panchayats.
Electrification: Provide electricity to 1,25,000 villages by grid based supply or in remote and inaccessible areas through alternative technologies.

This plan focuses on rural development in isolation.

B.3 Special Economic Zones - SEZs

The Government of India (2009) provides the following information on the Special Economic Zones program being implemented in India.

Special Economic Zones (SEZs) were established in many countries like China, Iran, UAE and Jordan, as testing grounds for implementation of liberal market economy principles. SEZs are viewed as instruments enhancing the acceptability and credibility of transformation policies, attracting domestic and foreign investment and also for the opening up of the economy. Globally, many countries initiated Free Trade Agreements (FTAs) which eventually led to a spurt in investments in infrastructure developments for Free Trade Zones (FTZs) and SEZs

In India, Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. In the year 2000 government of India formulated SEZ Policy and SEZ Act came into force in 2005. It came into force with effect from 10th February 2006, with SEZ Rules being legally approved.

Any private/public/joint sector or State Government or its agencies can set up Special Economic Zone (SEZ).

The SEZ should have a minimum area of 1000 hectares and at least 35 % of the area is to be earmarked for developing industrial area for setting up of processing units. Minimum area of 1000 hectares will not be applicable to product specific and port/airport based SEZs. Wherever the SEZs are landlocked, an Inland Container Depot (ICD) will be an integral part of SEZs.

100% FDI is allowed for: (a) townships with residential, educational and recreational facilities on a case to case basis, (b) franchise for basic telephone service in SEZ.

Income Tax benefit is available to developers for any block of 10 years in 15 years. Duty free import/domestic procurement of goods for development, operation and maintenance of SEZs is permitted.

In India, SEZs were an attempt at emulating Chinese success with a similar concept. Since they consider essentially economic development, without being holistic in outlook, they have frequently run into problems.

Asian Development Bank's [ADB] Asia Development Outlook 2007 (ADO07) contains some remarks on SEZs in India:

Tax breaks may be unnecessary since they are expensive and since they come at a time when the government is struggling to provide adequate infrastructure in the wider economy. They open up loop holes for tax evasion.
Firms outside SEZs suffer two disadvantages - worse infrastructure and higher taxes.
Land acquisition-related issues like the displaced people, the type of acquired land, the extent of state involvement in the process, financial stake of land losers and retraining landless agri-workers for other jobs

As India's modern sectors steam ahead of traditional sectors, social tensions are brewing mediated as ever through tight markets for land and food and slack markets for labor. The government is in a position to alleviating these tensions. It can do so by assuring appropriate compensation packages for displaced workers to qualify for jobs on SEZs; and most important, infrastructure support for creating and locating manufacturing jobs more organically. More directly, it can help tackle the tensions through well-targeted investments to improve agricultural-productivity. The pursuit of geographically distributed industrialization and agricultural productivity growth requires significant resources to expand infrastructure ."

B.4 PURA-Providing Urban Amenities in Rural Areas

Rastogi (2008) provides the following summary the PURA (Providing Urban Amenities in Rural Areas) concept proposed by Indiresan, P. V. (former Ditector, Indian Institute of Technology, Madras) and sponsored by Abdul Kalam, A. P. J. (former President of India):

PURA connects together a cluster of villages located on a ring road so that any urban amenities in any one village is accessible to all others, thus increasing the size of the market consisting of the combined population of all villages, large enough to make it commercially viable. This is a model advocated by Dr APJ Abdul Kalam. PURA aims to provide four types of connectivities-physical, economic, electronic, and knowledge. PURA aims to raise rural prosperity to urban levels and halt (even reverse) rural-urban migration. As PURA provides urban amenities without sacrificing rural ambience, it is best described as a rurban habitat and the process rurbanization.

PURA is planned as a habitation of about 1 km in width, restricted to a walking distance of about 500 m on either side of a ring road some 30-40 km in circumference. This configuration has several other advantages in terms of land requirement, capital, congestion and commuting from one place to other.

PURA should attract substantial number of organised businesses and is capital intensive whereas, by tradition, rural development is designed to be labour intensive. The issue is not how much capital PURA needs but whether it is profitable. Located as it is among villages, purchasing power of money is high in PURA in the sense that one rupee in rural India buys more material and labour than in urban India. In addition, as infrastructure lengths are minimised by the ring design, capital costs are decreased further. Hence, we should expect PURA to offer a higher ROI than do existing congested, and hence, expensive cities. It promises job creation and urban amenities. In addition, as every point in PURA lies within walking distance of open fields, and is planned on modern lines, it will offer a quality of environment unmatched by either villages or cities.

Besides the general concept of PURA as described above, it has been adapted to suit the special conditions of hilly and coastal areas and specific models for these areas have been proposed as well.

The Ministry of Rural Development has re-launched this as Central Sector scheme.

Lee Kuan Yew's take on PURA

Lee Kuan Yew, Minister Mentor, Singapore, was reported by Bhagat and Ramesh (2008) as saying that the PURA model advocated by the former Indian President, Dr A.P.J. Abdul Kalam, will not work in bringing about India's transformation into a developed country. He said, "If you study very carefully how other countries have industrialised and become knowledge economies - Korea, Japan, China and Eastern Europe - you will realise you cannot bring urban amenities to rural areas."

The way to do it, Mr Lee Kuan Yew said, was by rapid urbanisation as Singapore had done it ("we don't have a single village left in Singapore"), or by planned urbanisation, as China was doing it by moving 10 million villagers to urban areas every year. "Look at Brazil: They are building huge centres, factories for making cars, aeroplanes and all kinds of things." Villagers are moving to these centres, he noted. "If you look at ancient Greece - Socrates and Virgil, were they in the countryside? They were in the cities where all services were concentrated."

B.5 RISC - Rural Infrastructure and Services Commons

Rastogi (2008) provides the following summary the RISC (Rural Infrastructure & Services Commons) concept developed by an economist, Atanu Dey:

The idea of RISC is to bring to the rural population the full set of services that are normally available only in urban locations. It works within the constraints of limited resources by concentrating investments on specific locations to obtain economies of scale, scope, and agglomeration.

Conceptually and operationally, a RISC has two levels: (1) the infrastructure level (I-level) which provides infrastructure platform consisting of power, broadband telecommunications, and the physical plant (building, water, sanitation, etc), (2) the user services level (S-level) is above the I-level. Co-located at the S-level are firms that provide user services such as market & financial services, education, health, social services, governmental services, entertainment, logistics, and so on. Economies of scope and agglomeration are obtained by the presence of the variety of different service providers.

RISC facilitates aggregating the demand for many different kinds of services of say, 100 villages would translate into a lot of services. The infrastructural inputs for these services can be commercially and sustainably supplied by the I-level. The total rural population of India can be covered by about 6000 RISCs each servicing the needs of approximately 100,000 people. Access to an RISC for any rural person would be only a 'bicycle commute' away.

B.6 Rural-Urban Integration Initiatives

United Nations Development Program [UNDP] (2000) documents a number of initiatives to integrate rural and urban areas, like UNDP - UNCHS (United Nations Development Program - United Nations Center for Human Settlements) programs in Nepal (Rural-Urban Partnership Program - RUPP) and Indonesia (Poverty Alleviation Program through Rural-Urban Linkages - PARUL).

Indian Ministry of Panchayati Raj [MoPR or Rural Government] and Confederation if Indian Industries [CII] (2004) have come up with a Joint Initiative called RURAL BUSINESS HUBS (RBH) which is an attempt at urban-rural linkage.

The proposed RBH will be a Public - Private - Panchayat Partnership to improve/refine the locally available resources and produce goods to enable larger market access. This is on the lines of the successful Thai experience of One Tambon One Product (OTOP).

The Rural Business Hubs indicates a group of entrepreneurs including farmers and artisans working together under the aegis of a block panchayat to enhance value of their products with private sector participation for greater market access and prosperity.

The RBH is aimed to allow people living in communities to use their skills in manufacturing products (like food and drinks, herbal products, clothing, handicrafts, furniture and other items native to the rural areas and embodying India's centuries-old local wisdom and culture), while the Government and the private sector would render assistance on developing the products and exploring the markets in order to create jobs, income and strengthening the communities.

These sociological programs focus on physical and people connectivities so rural economy can get a boost by reaching out to profitable urban markets.

REFERENCES

Asian Development Bank (2007) Asian Development Outlook 2007: Growth Amid Challenge(ADO-2007). Last retrieved on January 17, 2014 from http://www.adb.org/Documents/books/ADO/2007

Bhagat, R., & Ramesh, N. (2008) Kalam's Pura model will not work - The Hindu: Business Line, Saturday, October 11, 2008. Last retrieved on January 17, 2014 from http://www.thehindubusinessline.com/todays-paper/tp-economy/kalams-pura-model-will-not-work/article1638680.ece?ref=archive

Government of India (2005) Bharat Nirman: A Time-Bound Plan for Rural Infrastructure by the Government of India in Partnership with State Governments and Panchayat Raj Institutions: 2005-2009 . New Delhi: Government of India. Last retrieved June 27, 2009 from http://bharatnirman.gov.in/download.pdf

Government of India (2009) India in Business: Special Economic Zones. New Delhi: Government of India. Last retrieved on January 17, 2014 from http://www.indiainbusiness.nic.in/FAQ/sez.htm

Hoornweg, D., et al. (2008) City Indicators: now to Nanjing (WB Policy Research Working Paper WPS4114) New York: The World Bank. Last retrieved on January 17, 2014 from http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166093&entityID=000016406_20070117123154

Rastogi, A. (2007) The Infrastructure Sector in India, 2007. From India Infrastructure Report 2008: Business Models of Future (A. Rastogi, P. Kalra, & A. Pandey (Eds.)), New Delhi.: 3-I Network. Last retrieved on January 17, 2014 from http://www.iitk.ac.in/3inetwork/html/reports/IIR2008/Chap%201.pdf

Roberts, B., & Kanaley, T. (2006) Urbanization and Sustainability in Asia: Case Studies of Good Practice. Manila: Asian Development Bank/Cities Alliance. Last retrieved on January 17, 2014 from http://www.adb.org/sites/default/files/pub/2006/urbanization-sustainability.pdf

Tibaijuka, A. (2007) Foreword In 2007-State of the World: Our Urban Future. Washington DC: The Worldwatch Institute. Last retrieved on January 17, 2014 from http://www.worldwatch.org/node/4853

United Nations Development Program: Bureau for Development Policies. (2000). Rural-Urban Linkages: An Emerging Policy Priority. Retrieved July 6, 2009, from http://www.undp.org/governance/docs/DLGUD_Pub_rururblinks.pdf

Appendices