Facilitating Pakoda Economy

In the February of 2018, the Prime Minister of India said that selling pakodas too constituted as employment, in response to his opponents’ criticism that no employment was being generated during his rule in India. He was alluding to self-employment in the trade sector, in which a sizeable proportion of urban dwellers are engaged in and dependent on for survival. Now that CMIE has estimated 1.1 million employment loss in the year 2018, the pakoda-economy becomes all the more important.

There are two types of self-employed, in particular, those who are engaged in petty trade such as selling various things and services on the streets. Things sold on the streets are items of daily use, even clothes and footwear, fruits and vegetables, and cooked food items (the golgappas, bhel, idli, pakodas and chai). After the chai selling attained great heights, now the pakora selling too has ascended in importance. These cooked food economy is fragile, it has to be cooked every day, and in peak summers, probably multiple times a day.

Some engage in the chai economy or pakoda economy out of choice and many have become big business rising from the footpaths. For example, Shankar Vijay icecreamwala in Ahmedabad, now has an upmarket ice-cream shop called ‘Shankar’s library’. Or Sarath Babu of Chennai, who started his career of selling idlis on the street to graduating from IIMA and has moved up in life.

But, there are many who engage in chai or pakoda economy out of ‘no choice’ or as fall back arrangement when formal employment is lost. Many formal textile mill workers took to the business after their mills closed in Ahmedabad. Or new migrants to the city, not finding any employment, start selling things on the street. That is, they are engaged in street trade. Or as our Prime Minister has called them, mini-entrepreneurs, surviving by their wits on the hostile streets; paying the ‘local leader’ (agewan), who could be a vendor or local government official or policeman, for right to occupy street space; honked upon by the motorists or any motorised vehicle driver; breathing the polluted air as all our cities have crossed the limits of air pollution tolerance and often target of eviction drives by the local authorities and consequently not just losing their wares and incurring financial loss but also losing right to work for many coming days after the eviction drive. Ofcourse, street vending means working on streets without access to toilets and braving the summer heat, which is expected to worsen in the coming times due to climate change and expected increase in average temperatures in the cities.

If the pakoda or chai economy is the way forward for India, and for Indian cities, coming from the highest person of the country, it should be facilitated. Instead, urban planning categorizes it as encroachment and hence illegal, as this commercial activity is on land which is not earmarked as commercial. Street vending is on footpaths and in city’s plan footpath is part of the road and classified as road-land use and not commercial land use. Besides, footpath is for walking and rightly so, and not for commercial activities. According to the ‘The Street Vendors (Protection Of Livelihood And Regulation Of Street Vending) Act, 2014 (http://legislative.gov.in/sites/default/files/A2014-7.pdf) which extends all over India, vending spaces have to be provided in the city’s Master Plan.

The street vendors are evicted by the police because, as per the Motor Vehicles’ Act, street vendors obstruct traffic flow and hence have to be penalised. The Indian Penal Code seeks to prevent obstruction of a public way and if done so the obstruction can be removed. The municipal legislation seeks removal or any permanent or temporary structures on streets and goods hawked or sold in public places. Municipal legislation also require any hawking or vending activity to obtain license from the relevant authority. It is not easy to get a licence and often a liscense is given to a person only if vending is the sole livelihood activity of the family. Note the term family is important here. We know that in low-income households, multiple members of a family have to work to remain above poverty line. How can then vending be the sole livelihood activity of a vendor’s family!

So without facilitation, through providing land for business through the implementation of the Street Vendors (Protection Of Livelihood And Regulation Of Street Vending) Act, 2014, making access to toilets in public places, a protected area for vending and increasing their access to finance, how is the pakoda economy to be an answer to lack of other employment opportunities in urban India.

The Town Planning Scheme – A Panacea for Planned Urban Development?

Ministry of Housing and Urban Affairs has launched Town Planning Scheme (TPS) mechanism to fast track area based infrastructure issues for 25 smart cities in the country. The ministry would provide an assistance to every city Rs. 2 crores of central assistance for planning purposes. The Town and Country Planning Organization (TCPO), located in Delhi, will provide hand holding support.

In regimes wherein lands are privately owned, as in all capitalist countries – in contrast lands are owned by the government in China and other socialist countries – it is difficult to obtain lands for public purposes such as for roads, laying of transport infrastructure, laying water and sanitation lines, for education and health facilities, and open and green spaces. These come in the category of public goods that give benefit to all the population while at the same time it is difficult to charge from them the full market value of land. If so charged, either the price of some of these facilities would sky-rocket – more than even what the education and health facilities in the private sector charge – or some of them would be unaffordable, such as open and green spaces.

In India, ongoing urban growth is expected to exacerbate the existing challenges of unplanned urbanization, informal housing, and access to basic services, particularly for low-income populations. Addressing these challenges requires the availability of public lands, which is extremely challenging in privately owned land regimes. Due to a growing population and lack of appropriate planning, cities’ peripheral areas—also called urban extension areas—sprawl in an unplanned manner, without access roads. This makes it extremely challenging to lay trunk infrastructure, reduces the amount of public land available for social amenities and green spaces, and leads to a lack of financing for infrastructure investments. The scarcity of public land makes provision of social housing difficult, even if national funds are made available for doing so

Indian cities lack open spaces.

Till recently, lands for public goods’ provisioning were acquired through Land Acquisition Act of 1894, which was amended through countrywide discussions into Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act. This new legislation is more equitable, transparent, and fair to landowners (the farmers on the urban periphery). But, urban planners and state governments are finding it lengthy, cumbersome and expensive. Hence, in its place, Town Planning Scheme is being proposed to be adopted for urban expansion areas or for development of urban periphery areas. Gujarat has been implementing the TPS since a long time, and more vigorously since 1999 and unlike the ‘Gujarat Model’ promoted in general in India, the TPS has seen partial success.

The TPS works on a philosophy of win-win solution for land owners whose lands are being acquired and for the city government that wants lands for public purposes. TPS is a process of pooling and reconstitution & reallocating lands followed by appropriating parts for public purposes, such as for roads (15%), social and physical amenities (5%), open and green spaces (5%), housing for socially and economically weaker sections (10%) and sale of lands for raising finance for infrastructure investments (15%), from the land parcel of the owner. Compensation is provided to the land owner for the land appropriated at the jantri rates (official land rate) but adjusted for the cost of investments made in infrastructure. This means that if the infrastructure costs are higher than the compensation price, the land owner has to pay the planning authority what is termed as betterment charges. Vice-versa in case of value of compensation is more than the infrastructure costs. These decisions are taken for each owner, plot by plot. So far so good.

But, the real world is different than what urban planners think of and what the urban plans portray and plan for. When the TPS of an area, with size from 100 hectare (ha) to 1,500, is prepared, location of some plots of land change in case the land parcel is reserved for public amenities of a green space or even roads. The decision regarding reconstitution and reallocation are done after negotiations with the land owners. The second round of negotiations happens with the land owners for financial settlement. In a sense, the TPS process allows for negotiations with the land owners, and hence is equitable. Equity is also embedded in the fact that the lands are made available for public purposes. The TPS has been widely used in Ahmedabad and Surat in Gujarat and not in other cities of the state.

Figure 1: Location of BSUP housing in Ahmedabad, 2017

Source: https://www.wri.org/wri-citiesforall/publication/ahmedabad-town-planning-schemes-equitable-development-glass-half-full 

The benefits are: Ahmedabad has used TPS lands for resettling about 20,000 households evicted due to urban infrastructure projects. Their locations are spread across the city (see figure 1), with significant proportion located on city’s periphery. Ofcourse, all has not been hunky-dory with the resettlement process as many households pushed out on the periphery of the city have been immiserized. But, for the first time in urban India, resettlement has been provided to slum households evicted due to infrastructure projects. Ahmedabad has also higher road network density than other cities in India (see figure 2).

Figure 2: Average Area Under Roads in Select Cities

Source: https://www.wri.org/wri-citiesforall/publication/ahmedabad-town-planning-schemes-equitable-development-glass-half-full 

In Ahmedabad, till now, informal settlements on private lands have not been evicted. We are not sure of the future. But, in such settlements, lands could not be made available for public purposes. Thus, the TPS mechanism does not work on brownfield sites, that is in already developed parts of the city. It works only in the immediate periphery of the city wherein the land price escalation is expected due to urbanisation as well as infrastructure investments and hence land owners are not unwilling to give up a proportion of their lands.

The TPS mechanism does not work at all in the greenfield sites, that is for planning within urbanizing limits of the city where development is expected after a 15-20 years. Such lands are still used for farming. If parts of such agricultural lands are appropriated through TPS mechanism, the farmers, who are already under great economic stress, would further lose their livelihood and go down the poverty route. The desire for planned development in rural areas surrounding an urban area has led to a situation of conflict of urban planning authority with the villages. For example, in case of Ahmedabad, 68 villages of Ahmedabad and Gandhinagar districts have demanded withdrawal of a notification declaring their village lands (a total area of 625 sq km) to be part of the Ahmedabad Urban Development Authority and thus be brought under the TPS mechanism.

Pre-empting appropriation of farm lands for planned development of the peripheral areas of a city is also abuse of the mechanism. In Gujarat, the Special Investment Region (SIR) Act of the state has made mandatory use of TPS mechanism in the proposed SIRs such as Dholera (also declared as a smart city), and Dahej. This means that instead of RFCTLARR Act, 2013 (the current land acquisition act that gives fair compensation to the farmers, the TPS mechanism would be used. In other words, TPS mechanism is being used to subvert the RFCTLARR Act! This is surely an abuse of the TPS mechanism.

The TPS mechanism works in certain situations and does not work in some other. It should not be seen as a coercive mechanism of appropriating private lands for public purposes. On the other hands private ownership of lands in Indian cities require some mechanism to procure them at low costs for public goods. There has to be careful application of the mechanism, which till now has been practiced as a mechanism of negotiations and not coercion. It seems its wholesale promotion and adoption may lead to more coercion than negotiations as PILs pending in the Gujarat High Court for the SIRs indicate.

For full report on the TPS mechanism, see: https://www.wri.org/wri-citiesforall/publication/ahmedabad-town-planning-schemes-equitable-development-glass-half-full