Seeing Mumbai through Its Hinterland Entangled Agrarian–Urban Land Markets in Regional Mumbai Sai Balakrishnan In the past, the “money in the city, votes in the cholars often pose a puzzle of Indian cities: why do some countryside” dynamic meant that agrarian of the richest cities in the country suffer from crumbling water pipes and potholed roads? (Varshney 2011; Bjork- propertied classes wielded enough power to draw man 2015) If India’s cities generate nearly 85% of the country’s capital and resources from cities into the rural gross domestic product (GDP), why are their revenues not hinterland. However, as cities cease to be mere sites of invested in better public services? To some political scientists, extraction, agrarian elites have sought new terms the answer lies in India’s political–economic para-dox: economic power is concentrated in cities, but political power of inclusion in contemporary India’s market-oriented resides in villages (Varshney 1995). The agrarian countryside urban growth, most visibly in the endeavor of the may contribute less than 15% of the GDP, but it is also home to political class to facilitate the entry of the “sugar 80%–85% of the electorate. Politicians cannot afford to ignore constituency” into Mumbai’s real estate markets. agrarian interests without grave losses at the ballot boxes. It is this configuration of political–economic power that explains why “for politicians, the city has primarily become a site of extraction, and the countryside is predominantly a site of legitimacy and power” (Varshney 2011). The electoral power of the agrarian countryside is evident in the relationship of Mumbai to its hinterland. India is the second largest exporter of sugar in the world and more than 40% of India’s sugar exports come from the western Maharashtra region. Sugar production in the region is organised in the form of cooperatives. These sugar cooperatives have been heavily subsidised by the state: 90% of sugar cooperative finances came from state-guaranteed cooperative bank debt; over three quarters of the equity was a direct handout from the state budget (Baviskar 1980; Attwood 1992; Jadhav 2008). It was Mumbai’s thriving industrial economy that was the source of sugar subsidies. Mumbai’s industrial classes tolerated the diversion of capital from the city to the countryside, as they understood that the state government legislators relied on the peasants for their votes, and that capital diversion was the price to be paid for the political stability from subsidised agrarian prosperity. A Liberalising and Urbanising India Following the 1991 economic liberalisation reforms, the state’s development framework has shifted from a state- controlled agrarian economy to a market-oriented urban one. In a clear departure from earlier agricultural development programmes like land reforms and the green revolution, the central government’s ongoing development policies have a strong market and urban orientation. The national government has launched flagship urban renewal programmes, including the Jawaharlal Nehru Sai Balakrishnan ([email protected]) teaches urban planning at the Graduate School of Design, Harvard University. This is a pre-edited version of the published article. To cite, please use: 55 Balakrishnan, Sai, “Seeing Mumbai through its Hinterland: Entangled Agrarian-Urban Land Markets in Regional Mumbai Cooperative Housing Society is located in the prime neigh- National Urban Renewal Mission (JNNURM) and the Smart bourhood of Colaba in the middle of the megacity of Mumbai. Cities Mission. It is investing in massive economic corridors The real estate “scam” involves a 31-storey residential com- that are envisioned as the spines for these new globally plex, built on defence land meant for the war heroes and war competitive cities. Economic reforms are opening up sectors widows of the 1999 Kargil War, but was diverted to politicians. like land to new market relations, with post-liberalisation This scam represents the movement of former “sugar elites” sources of private capital emerging as key financiers of urban into the “hot” real estate markets of a megacity. In both of these development. As old regulations that governed an agrarian cases, agrarian elites exerted their influence on the flow of economy are being dismantled to make way for urban growth, resources, both to produce appreciating land prices, and to new actors and coalitions are stepping into the institutional void capture these windfall land increments for themselves or for to make new rules that are most favourable to them (Hajer those favourable to them. To label these developments as 2003). In this moment of fast-paced regulatory change, key “corruption” is not enough; instead, we need to connect these works have shed light on the making of new real estate markets seemingly disconnected cases of regulatory abuse to deeper in a liberalising and urbanising India (Benjamin 2008; Sud political-economic shifts of the politically powerful agrarian 2012; Chakravorty 2013; Searle 2016). In the context of elites, now seeking new terms of inclusion in contemporary Mumbai, researchers have cast a spotlight on development India’s market-oriented urban growth story. mafias (Weinstein 2008), squatter-developers and private developers (Mukhija 2000; Chattaraj 2012), evicted “slum” Lavasa Lake City residents (Doshi 2013) and urban middle class associations Lavasa Lake City (henceforth Lavasa) is representative of the (Zérah 2007; Kamath and Vijayabaskar 2013), as new entrants new real estate developments on formerly agricultural and and exclusions in the liberalising real estate markets. Notable forestlands. Located on the forestlands of the Western Ghat amongst this rich profusion of urban scholarship is mountain range, the lake city spans 25,000 acres and is Venkatramani’s (2017) work which sheds light on the politics approximately one-fifth the land area of the Municipal of the artisanal Koli fishing settlements in Mumbai’s Corporation of Greater Mumbai (MCGM). The promoter, Ajit liberalising coastal development zones. My article asks what Gulabchand—the chief executive officer of the prominent new narratives emerge when social groups, who are generally Mumbai-based firm Hindustan Construction Company outside the purview of urban political economy because of the (HCC)—sees Lavasa as a bold response to the demands of methodological limits of city-centrism (Brenner and Schmid accelerated urbanisation. 2015), become key protagonists in the production of urban real estate markets. [Lavasa] is a grand project … It actually looks at the needs of India’s I argue that to understand the complexity of urban real urbanisation—an estimated 400 million people will move to urban centers in the next 30–40 years. So, we really need to consider our estate markets in liberalising India, we must bring in the urbanisation needs and this project couldn’t have come at a better time agrarian propertied classes and their embedded caste-based to create a kind of replicable model of a new city. The speed with which alliances. In the past, agrarian elites with their regional rural- we will have to build these urban centers or enhance existing ones based political parties had the political power to draw capital would need some kind of public-private partnership. (Iyer 2011) and resources to the countryside. In a market-oriented urban- Lavasa is an experiment in the making of a “private city” ising economy, these elites continue to influence the making (Parikh 2015). Unlike earlier new towns—including the ambi- of urban real estate markets by flexing their regulatory tious plan to build 120 steel towns in the early decades of muscle. The price of a plot of land increases when it is well industrial modernisation in the 1950s—Lavasa is a unique ex- connected to roads and transport networks, when it has periment in urban finance. The public- sector steel towns, for uninterrupted water supply, when it can rise high in the air instance, relied heavily on foreign aid for construction and on and thus maximise development rights. Politicians control the steel companies for maintenance (Sivaramakrishnan 1977). these road, water and air resources, and in a context where Lavasa, on the other hand, is setting a precedent by tapping into local governments are not yet fully empowered as decision- India’s newly liberalised equity markets. Lavasa Corporation makers, state-level politicians wield immense control over Limited (LCL), the promoter company that is a subsidiary of resources that get capitalised into the price of land. To unpack HCC, has regulatory approval to raise capital for the the role of agrarian elites in urban politics, this article focuses `33,000 million project from public equity, including foreign on two cases: Lavasa Lake City and Adarsh Cooperative institutional investors (FIIs) (LCL 2014). Housing Society. Though Lavasa is gearing itself towards domestic and for- Lavasa Lake City is India’s first private city, located in the eign investors, early financiers of the lake city included Sharad ecologically-sensitive Western Ghats forestland. It has been in Pawar’s daughter (LCL 2014). Pawar, the founding leader of the the eye of the storm, with activists accusing the urban promoter Nationalist Congress Party (NCP), is an influential “sugar elite” of fraudulent land transactions that have deprived forest from western Maharashtra. In 2003, Supriya and Sadanand dependents of their occupied land. Lavasa Lake City represents Sule, the daughter and son-in-law