Urban Economic Growth, Infrastructure and Poverty in India: Lessons from Visakhapatnam
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VISAKHAPATNAM Urban economic growth, infrastructure and poverty in India: lessons from Visakhapatnam Philip Amis and Sashi Kumar Philip Amis is a senior SUMMARY: This paper describes the rapid economic growth in the city of lecturer in the Visakhapatnam which is now one of India’s largest ports and an important indus- International Development Department trial town and seaside resort/retirement centre. It highlights how the city’s further of the School of Public growth is constrained by inadequate investment in infrastructure - especially for Policy, University of water and electricity - and discusses the political and institutional reasons for this. Birmingham. His main areas of interest are in It then presents the findings of participatory research on poverty, and the many urban governance, poverty dimensions of poverty which are emphasized by urban poor groups, including inad- and development in South equate incomes, lack of assets (“no shelter, no property, no gold”), lack of support Asia and Sub-Saharan (especially for widows, deserted women and the handicapped), illness and debt. It Africa. discusses the direct and indirect impacts on poverty of a DFID slum improvement Address: IDD, School of project, showing which improvements low-income groups particularly appreciated. Public Policy, University This demonstrated the importance of infrastructure and service provision to poverty of Birmingham, Birmingham B15 2TT, UK; reduction within a wider recognition that this is but one important aspect. e-mail: [email protected] I. INTRODUCTION Sashi Kumar is a partner in Thinksoft Consultants, a development THIS PAPER EXPLORES the relationship between urban economic consultancy based in growth, the provision of urban infrastructure and poverty reduction. (1) Hyderabad, India. He has extensive experience of The central argument underscores the importance of the delivery of infra- working with NGOs, structure in facilitating both urban economic activity and growth but also community development in addressing the “quality of life” dimens ions of urban poverty. In a finance and participatory methods in both rural and nutshell, however unfashionable and boring it might seem, infrastructure urban India. matters! It is an important lever that is available and capable of being delivered by local government (2) but one which the Indian state at all Address: Thinksoft levels (union, state and municipality) is manifestly failing to deliver. Consultants, 3-4 142/6 Barkatpura, Hyderabad Section II of this paper provides a general background to Visakhapat- 500 027, India; e-mail: nam and Section III considers the process of urban economic growth and [email protected] the problems related to infrastructure. Section IV considers perceptions of urban poverty and Section V is concerned with a donor funded slum improvement project as an example of the provision of infrastructure for poor households. Finally, the conclusion is a discussion on the importance of and constraints in the delivery of urban infrastructure in terms of urban economic growth and poverty reduction. Environment&Urbanization Vol 12 No 1 April 2000 185 VISAKHAPATNAM 1. This paper is based on II. BACKGROUND: A BOOM TOWN IN INDIA two separate but related pieces of research. The main VISAKHAPATNAM (3) (OR VISAG as it sometimes known) is located on source is one of nine city case studies prepared as India’s eastern seaboard in the state of Andhra Pradesh, approximately part of a research equidistant from Calcutta to the North and Chennai (previously Madras) programme on Urban to the South. Andhra Pradesh is an important state in South India with, by Governance, Partnerships and Indian standards, relatively good social indicators. The area of Visag was Poverty, funded by the UK Department for originally a small fishing village which began to gain prominence during International the British Raj as an alternative port to Bhimunipatnam on the coast north Development’s ESCOR of Madras. Table 1 provides population data. programme which was written by Sashi Kumar (Thinksoft Consultants) in Table 1: Population Growth 1998 and 1999. This in Visag, 1901-1991 involved research teams in each of these cities and a coalition of UK-based Year Population research groups from the 1901 40,892 University of Birmingham, the International Institute 1911 43,413 for Environment and 1921 44,711 Development (IIED), the University of Wales, 1931 57,303 Cardiff, and the London 1941 70,243 School of Economics. Summaries of other city 1951 108,042 case studies also feature in 1961 211,190 this edition of Environment and Urbanization . The full 1971 363,467 version of this study and 1981 603,630 other city case studies and also of theme papers may 1991 1,051,918 be obtained from the Publications Office, School SOURCES:Drawn from Indian Census data. of Public Policy, University of Birmingham, As in many urban centres in India, the rate of growth was slow until the Birmingham B15 2TT, UK; 1970s. However, since then, the growth rate has been spectacular; indeed, tel: (44) 121 414 5020, fax: (44) 121 414 4969 or e-mail Visag has been the fastest growing urban area in India since 1971. Its to: [email protected]. population has increased from 363,467 in 1971 to 603,630 in 1981 and to City case studies cost 1,051,918 in 1991, representing average urban growth rates of 6.6 per cent UK£10 each including postage) but are free to between 1971 and 1981, and 7.4 per cent between 1981 and 1991. This NGOs and teaching growth has been partly associated with the inclusion of areas into the institutions in non-OECD municipal boundary since 1965. The inner-city area has grown from a countries. This paper also draws upon work population of 353,000 in 1971 to 593,000 in 1981 and to 823,000 in 1991, undertaken as part of the average annual growth rates of 6.7 per cent and 3.9 per cent, respectively. "Impact Assessment Study This is in contrast to the overall urban growth rate in India which slowed of Indian Slum down from 4.6 per cent in the 1970s to 3.7 per cent in the 1980s. (4) Improvement Projects", carried out in 1996/97 by Visakhapatnam is a port and major industrial centre but also a smart Sashi Kumar, Lalita and residential and seaside resort and retirement area. In UK terms, it is a very Vithal Rajan of Thinksoft unusual combination which might be characterized as the mix of an Consultants, and Gita Dewan Verma from New industrial location such as Middlesborough with a seaside/retirement Delhi, for DFID, India. centre such as Brighton. The key development in Visag was the develop- Neither DFID India nor ment of its well-protected natural harbour into a port, which was planned ESCOR are responsible for by the British in 1858 and on which proposal a report was published in the comments made here. 1877. In 1922, the Bengal Nagpur railway revived Colonel Cartwright 2. Amis, Philip (1999), Final Reid’s proposal to construct a harbour at the mouth of the Report on Impact Assessment Meghadrigedda. Construction was started in 1927 and the port was Study of Slum Improvement Projects, DFID opened in 1933. On the eve of independence in1947, the Scindia shipyard, which was based in Visag, was taken over by the government of India and 3. The spelling of the city renamed the Hindustan shipyards. Similarly, the Caltex oil refinery was can vary. 186 Environment&Urbanization Vol 12 No 1 April 2000 VISAKHAPATNAM 4. These all-India figures include substantial nationalized and became the Hindustan Petroleum Corporation. The city boundary changes in most has benefited from a succession of large public sector investments in the Indian cities. area. In this context, it is worth noting that until its recent liberalization in the 1990s, the Indian economy contained a substantial public sector. In Visag, this included Coromandel fertilizers, Bharat Heavy Plate and Vessels, and Hindustan Zinc. These were all attracted to Visag primarily because of its port. Visag’s strategic location on India’s eastern seaboard enabled the 5. What today is nascent Indian navy to convert its repair facility established during World Bangladesh was part of War II into a proper navy base. This was given a major fillip during the India under British rule; it (5) became East Pakistan after 1971 Indo-Pakistan war which led to the establishment of Bangladesh. partition in 1947 and finally For security r easons – and presumably because of its distance from achieved independence in Pakistan – the Navy upgraded the base to become the headquarters of the 1971. Eastern Naval Command concerned with the security of India’s entire eastern seaboard. These naval dockyards are the largest ship repair facil- ity in South and South-East Asia, employing 8,000 people. The port handles a wide range of bulk, break-bulk, container and other general car go and this has attracted a lot of heavy industry. Recently, India’s first port-based steel industry was set up for the import of raw materials and the export of finished products. In addition, a new export processing zone has been established in an attempt to attract both local and inward new investment. It is too early to judge the success of this initiative. During 1996-97, Visakhapatnam Port Trust handled 27.8 million metric tonnes compared to the 27.4 million tonnes handled by Mumbai (Bombay) Port Trust. This was the first time Visag had surpassed Mumbai, making it India’s largest port in terms of tonnage, which has increased by approx- imately 10 per cent per annum over the last ten years. In terms of the type of cargo handled, petroleum products were the most important followed by iron ore, coking coal and thermal coal.