October 2013

Transforming India’s Slums: A Critical Step in Creating the New India


One of India’s biggest challenges today is coping with the wave of urbanisation unleashed by economic liberalisation.  An estimated 160 million people have moved to the cities in the last two decades, and another 230 million are projected to move there within the next 20 years[1].  Unfortunately, as any visitor to India can see for themselves, its major metros and tier-II cities are clearly finding it difficult to cope with the inflow of people.  It is no surprise that India’s famously poor infrastructure is critically over-strained.  In response, the ill-equipped urban systems and the informal housing that are the slums have expanded exponentially in the last few decades without proper access to basic services such as sanitation, healthcare, education, and law and order.  While they are often teeming with entrepreneurial activity, they are nevertheless an inefficient use of the city’s human resources and land.  In order to truly unleash the productive potential of this dynamic urban population, India will need to build scalable urban systems capable of housing, caring for, employing and integrating large and increasing numbers of new inhabitants.  India is not alone in this challenge of course; Mexico, Brazil and Africa have some of the largest slums in the world.  It is unclear that there are simple solutions to the problem of slums given their extraordinary organic growth rates– 70% of the world’s population is expected to live in urban centres by 2050[2] – and solving slums requires a rethink of the design of cities and their borders as well as of the role of rural areas.  The challenge, like with many such difficult transformations and reformations for India, is whether it can muster the political will and concerted efforts of its stakeholders to implement the level of change required. India’s Struggle to Keep Pace with Urbanisation

India’s growth over the last two decades has resulted in one of the largest human migrations in history – from the Indian countryside to its growing metros.  The country’s on-going industrialisation, while stop-start and riddled with missteps, has driven, and will continue to drive, the transformation and relocation of its pre-dominantly (rural) agricultural labour force into urban areas as they become industrial and service workers.  The massive influx of people has strained India’s urban systems to the point of breaking, creating massive slums with inadequate housing, sanitation, basic services and security.  In India’s financial capital Mumbai, which boasts some of the country’s most expensive real estate, approximately eight to nine million people (or over 40% of its households)[3]currently live in slums, which the Indian Census succinctly defines as “residential areas unfit for human habitation.”[4]  Tellingly, Mumbai’s slums, while seemingly ubiquitous, are estimated to occupy only 6-8% of the city’s land mass.[5]  Moreover practically every city in India is facing similar challenges.  The 2011 census indicates that there are 14 million households (or approximately 70 million people assuming an average household size of five people) living in slums in India’s cities[6].  While slums in India’s large metros such as Mumbai and Kolkata are the most well-known, in many ways, the urban housing situation in India’s smaller cities is worse.  Almost two-thirds of India’s slum population is in these smaller cities which have populations of less than one million people.  In five cities, the proportion of slum households to total urban households is greater than 40%[7]. Today, 50% of the world’s population lives in cities, a figure that is expected to reach 70% by 20503, implying an almost doubling of the global urban population within less than 40 years.  Among global city dwellers today, almost 900m people live in areas considered slums[8].  As cities continue to attract excess rural populations and people looking for economic opportunities, slums’ share of the urban environment will surely continue to grow, particularly in fast developing and low income countries where the rate of urbanisation exceeds urban systems’ ability to scale.  With an additional 230 million people2 projected to move to the cities in the next two decades, India is creating the equivalent of a new Mumbai every 18 months. Given this urbanisation phenomenon looks unstoppable, unless the relative size and power of the Indian economy and its distribution of wealth outpaces this shift by a substantial margin, India’s emergence will not result in a better quality of life for the majority of its citizens.  If India’s politicians fail to deliver on the economic front, the disparity will grow between those living on the edge and those in the centre.  It is widely held among a smug political and business class in India that the religious values of the nation forestall social unrest, but the patience of 230 million people housed in slums might well be tested if the government fails to deliver.

“Slums are litmus tests for innate cultural strengths and weaknesses. Those peoples whose cultures can harbor extensive slum life without decomposing will be, relatively speaking, the future’s winners. Those whose cultures cannot will be the future’s victims.” Robert D. Kaplan, The Coming Anarchy, 1994


How Slums Develop, India’s Freedom Trap

India’s democracy provides free mobility to its people.  Part of the freedom of India’s democratic population is the apparent liberty to pursue their dreams anywhere in the country and India’s aspiring population is dynamic and determined to do so.  The great slums of India are predominantly created when large numbers of individuals or families move to the urban centres of their dreams, usually in search of better economic prospects. Mumbai has been the number one choice of generations of Indians for decades.  These urban centres are not geared to, nor governed in a manner that can accommodate (or reject) such an influx of people. As a result, the incoming migrants find accommodation in unorganised dwellings.  India’s slums have received global attention not just from the global NGOs but also in popular culture through movies like Slumdog Millionaire,which portray them as centres of unmitigated squalor and despair.  However poor this quality of life may seem from the outside, from a migrant slum-dweller’s perspective, living there is an entirely rational decision based on three basic factors:

  1. A Higher and More Stable Income. The productive employment opportunity in the urban centre will likely generate a higher and more consistent personal disposable income than in the place of origin – likely a rural, farming centre (e.g. being a chauffeur in Mumbai is a more lucrative and sustainable job proposition than being a labourer at a farm, typically a small plot in an un-electrified village with erratic water availability.
  2. Social Mobility for the Next Generation. Raising children in an urban environment creates a higher “option value” for the next generation. Typically, cities offers a wider choice of education and employment opportunities, and while no parent wishes their child to grow up in a slum, the chances that the child could rise to a middle class life provides a strong incentive to migrate to one from the countryside. This contrasts to a child growing up in a village dominated by a sub-scale farm with poor education and employment opportunities, who is unlikely to ever have the same social mobility opportunity.
  3. No Other Option. Unfortunately, slums are the only way to inhabit the city for the vast majority of migrants.  With little available low-cost housing of decent quality near the city centre, a rural migrant would need to go well outside even the suburbs and outskirts of the city to be able to afford real estate. Given the poor transport linkages to the cities, this can create a significant trade-off for migrant in terms of the occupations that are available and their earnings potential.  As a result, most are willing to compromise and make the trade-off to slum housing in the city to be closer to the place of work.

The coalescing of this process over decades, with successive waves of migrants and no exodus of the previous waves leads to slums growing in scale and scope (see inset on the phases in slum development).  Over time, informal economies develop in these slums as they form their own social practices and codes in the absence of any effective oversight from the local government.  The larger slums often become a zone for small-scale industries by illegally diverting public resources (water, electricity) to meet their requirements.  These slums also provide blue-collar labour for construction, manufacturing, and other trades.  For example, Dharavi, a large Mumbai slum with a population of over one million people living on 1.7 square kilometres, has 5,000 businesses and 15,000 single room factories which produce pottery and leather and also recycle a large portion of the waste generated in the city.  The total output of the Dharavi, most of it part of the informal cash economy, was estimated at US$500-650 million in 2010[9].  Clearly, India’s slums are far from their popular stereotypes as only centres of disease and want.  Indeed, an overwhelming number of people in these slums have left their homes in the countryside in the pursuit of opportunities in urban India because of their strong aspirations. Ironically, it is the informal economy which traps many of these slum-dwellers into the vicious cycle of poverty.

Without real options for their children to secure competitive standards of schooling and with the overwhelming number of slum-dwellers not trained for the better jobs, social mobility for this class, though inspiring when it occurs, is still limited.   Further, continuing urbanisation and slum growth through fresh arrivals from the countryside increases competition for limited resources and, opportunities further reducing both liveability and individual chances for mobility.  The very presence of slums ultimately risks creating a different class of urban citizens who only rarely mix with the other ‘classes’ other than as employees.  While India’s slums today are full of ambitious hard workers, lack of opportunity can quickly institutionalise poverty and create an unbridgeable gap between poor and rich.  Although global technological innovation and India’s growth provides its slum dwellers with access to some of the modern consumables such as motorcycles, televisions, and mobile phones, their ability to shape their own destiny remains limited – and the productive potential of the young migrants eager to work is under-utilised.  However, having established viability and survived attempts to dismantle the slum, India’s largest slums like Dharavi, are now in phase VI, continuous growth through adaptation.  This makes them an organic entity that has demonstrated its Darwinian survival status.


Indian Slums in a Global and Historic Context

While the Indian subcontinent is home to the largest number of slum-dwellers given its large urban population and (see chart), slums are of course not unique to India; there are large slum cities in developing countries across the world from Mexico City, to Rio de Janeiro’s favelas, to Johannesburg’s Soweto, and Jakarta to name a few.

Slums world- over share some common characteristics including a higher incidence of violent crime due to lack of attention from local law enforcement, a higher incidence of disease due to poor sanitation and access to healthcare facilities, the dominance of the informal economy and political bosses, and a higher incidence of child labour, prostitution, and substance abuse.  Clearly, the culture of a nation or region plays a large role in determining the degree to which these factors shape the slum. The development of slums appears to be an entirely organic phenomenon which occurs when poorer countries that have under-developed urban management, governance structures and poor infrastructure undergo rapid industrialisation and urbanisation and fail to minimise the disparity of prosperity between the urban and rural population.  In history, this was evident in the experience of the ‘great’ global cities such as London, Paris and New York.  Each of these cities faced issues during its industrialisation phase in the growth of informal housing, workhouses, exploitation of the poor and disenfranchisement of migrant workers.  Over time, however, these cities found ways to expand and make room for the increasing numbers of migrants flowing in and became great cities in part because of their ability to  not only gainfully employ these migrants but also to attract and accommodate even more highly skilled immigrants.  Each city developed the ability to absorb and assimilate the influx of migrants and was ultimately able to provide low-cost housing, infrastructure and services to its growing populations.  However, slums do not seem to fully disappear: they are a phenomenon of disparity and migration that persists in even rich nations.  Despite the prosperity of the UK, France and America, in the outskirts of their major city centres, slums have been replaced by housing estates segregating their inhabitants along socio-economic lines, which even today pose a risk to the stability of their nations.  Social exclusion and the lack of opportunities leading to disenfranchised populations left the Paris suburbs burning in riots and protests as recently as 2005 and London and major cities of the UK in 2011.  Moreover, although the downtown areas of cities like London, Paris and New York have or are being gentrified following decades of development with only pockets of the old poor areas remaining, many others, such as Detroit, continue to suffer from inner city decay that drives the creation of new urban slums.

In that context, India’s slums are perhaps the to-be-expected outcome of the rapid economic changes the country is currently undergoing.  However, before classifying them as a “necessary condition” and relegating them to the list of unsolved global phenomenon (and therefore not India’s responsibility to address), India’s leaders will need to recognise three important facts about slums unique to India:

  1. Unprecedented Scale. No country has or is facing the issue on the scale at which India is.  By 2017, India is expected to have over 100 million people living in slums[10] and another 10 million migrants moving to the cities each year.  India cannot afford to pause or be complacent on urban development given the scale of this migration and in fact needs to play some ‘catch-up’ in scaling the infrastructure of its cities to match their populations.
  2. Political Clout Cuts Both Ways. India’s slum-dwellers are fully enfranchised and actively vote for national and local leaders who they feel will protect their interests.  Slum-dwellers’ today know they represent a strong and highly influential vote and politicians know that delivering things of value to this constituency plays an important part in their ability to win their vote.
  3. No Control. Some other developing countries have more effective political tools to control urban migration.  However, India’s democracy which assures the free movement of people throughout the country prevents any such controls from being even remotely feasible.

While slums may be born organically, they will not disappear automatically just because cities build more houses.  If the slum is a fact of modern urbanisation of India, India’s choice is to decide what is its vision for the slum of the future, the role of the slum, its design and purpose, how it will transform slums to make them assets and thereby put them on the path to transforming into being the waiting room to enter a better life. If this is to happen, the real challenge is to support of the organic process of mutating slums into dynamic city sub-centres in an ever-expanding city boundary.

Strategies for Transforming India’s Slums

As we have said of London, Paris and New York, the history of urbanisation is full of examples of cities which started off by being the hosts (willingly or not) to the economically weaker section of the population who were ultimately graduated from poor living conditions to a combination of affordable housing and basic civic amenities.  The solution ultimately lies in better nations, not just better cities, which are scalable and capable of not only absorbing the inflow of people (from within or without), but in fact are economic magnets in attracting the best talent from the country.  Five insights provide the basis of the solution.  Firstly, slums are a logical response to urbanisation and the relative lack of opportunity outside of major urban centres in predominantly poor countries. They are facilitated by the right to migrate.  So, they are a structural phenomenon.  Secondly, slums become a system of living perpetuated by economics, politics and societal factors.  Therefore, it makes sense to see them as a part of the system of a country and also the global system of trade and distribution of wealth.  Thirdly, people accept and adapt to their circumstances without (external) triggers to encourage them to do otherwise.  In this sense, slums are adaptive organisms.  Fourthly, slum dwellers can improve the slum to a large extent if mobilised to do so.  Therefore, they can also be developed as one would any organisational entity through the application of techniques of change management.  Finally, slum dwellers cannot transform their slum (into a non-slum) without the support of the environment around them.  They lack the critical human and financial resources to make a clean break from their situation.  Their transformation requires external impetus and resources.  In the absence of this external intervention, they can become disenfranchised rather than citizens in-waiting and have the potential to develop a culture, set of values and behaviours that can threaten the on-slum environment they live in.

“People accept and adapt to their circumstances without (external) triggers to encourage them to do otherwise … slums are adaptive organisms”

Therefore, ultimately, a comprehensive and long-term solution to the problem of India’s slums cannot be about the slums themselves.  A viable solution would have to take a holistic view dealing with India’s larger macro challenges and recognise the critical role which cities will have to play if India is to successfully transition into a middle-income country.   Such a solution and would include the following strategies:

  1. Industrial Revolution and Continued Development.  While it was the industrial revolution which led to a wave of rapid urbanisation in the West and gave rise to slums, without the industrial revolution, the West would not have been able to afford to develop housing and infrastructure required for its growing populations.  The solution to slums is not to reverse industrialisation or to try and contain urbanisation, but indeed to press forward with it more aggressively so that businesses can afford to provide jobs to slum-dwellers and pay them a proper wage.
  2. Knowledge and Freedom Advantage.  India is not fully leveraging its “freedom advantage” (see our previous paper on China[12] which highlights the strong link between a society’s freedom and its development potential) which should in theory allow for people to strive to realise their aspirations.  In particular, India needs to create an open knowledge economy where the slum-dwellers are empowered to solve their own problems and have the access to financing to do so.  This requires scaled charities and NGOs that can apply global best-practices to tackling India’s urban issues and also raise the necessary financing.
  3. Slum Architecture.  Lesson from other cities indicate that slums are best solved when housing is horizontal not vertical.  In order to assimilate slum-dwellers into urban life instead of further ostracizing them, India cannot just bulldoze the slums and pile up the people into apartment blocks.  A real solution would involve building high-quality, low-cost, multi-storey, diverse formats in the current areas such that these become integrated with the rest of the city (as we see in London or Paris).  This needs the best brains in India and the world to come in and design the solutions.  The slum is merely the platform for an urban re-invention.
  4. Sustainable Continuous Dynamic Infrastructure Provisioning.  The government needs to create a framework for gradual and continuous upgrading of slum infrastructure through innovative public-private models and by leveraging the many dynamic charities and NGOs in India. Such a model would see the slum-dwellers become the driving force of, rather than bystanders to, the improvement of their living conditions by empowering them to identify the solution and then finance and implement it.
  5. Rural Re-Visioning and Investment.  India cannot solve its slum problem by focusing on the cities alone.  Any city which develops the systems to accommodate more people and create economic opportunities will attract a disproportionate number of migrants putting it under further strain unless opportunities in rural areas are sufficiently attractive relative to those in the city.  Therefore a comprehensive solution would necessarily have to involve improved infrastructure, schools, employment opportunities and the overall quality of life in India’s small towns and rural centres.  India’s countryside has all the potential of a Switzerland (Kashmir and the Himalayas), the Caribbean (the many beaches along its long coast), an African safari (the many wildlife sanctuaries and forests), and a Gulf desert trek (Rajasthan’s deserts and palaces) – however, the country has barely begun to exploit this potential.

Reflections: The Transformation of Slums is Really about the Transformation of India Itself

None of the five strategies described above on their own can transform the slums.  However, if implemented together, they could represent a sea change in the way that India’s mass migration and resulting urbanisation is managed.  This requires a recognition that the reason why slums in India persist and continue to expand is because of the failure to address fundamental issues of economic opportunity across the country, population growth, urban and rural development and education and skills development.  A middle income India will indeed demand world-class cities and conversely, to reach middle income levels, India needs to create opportunity for the population to be gainfully employed.  Given India is already in the midst of a rocky economic cycle at the same time as slums are growing at the edge of every major city, the investment in urban infrastructure can create a highly positive multiplier effect for the economy while addressing a major issue.  There is no single point in time or crisis which will tell us that India’s cities have suddenly become “un-livable”; however if the status quo prevails for the next 20 years, they will get progressively more chaotic and at some stage in the not-too-distant future, it will be impossible to harness the economic potential of India’s population without even more radical changes than those outlined above.  Addressing this issue is one of the key steps in the regeneration of the India story and will have a highly positive impact on the success of the next government.  Indeed, solving the issue is about as difficult as putting a man on the moon, but would have massive collateral benefits for the nation as a whole and would be a true indicator that India is truly ready to play its role on the global stage.

“Solving the issue is about as difficult as putting a man on the moon, but would have massive collateral benefits for the nation as a whole and would be a true indicator that India is truly ready to play its role on the global stage.”

[1]Source: McKinsey, India’s Urban Awakening, 2010
[2]Source: United Nations Analysis

[3] Full defined as “residential areas where dwellings are unfit for human habitation by reasons of dilapidation, overcrowding, faulty arrangements and design of such buildings, narrowness or faulty arrangement of street, lack of ventilation, light, or sanitation facilities or any combination of these factors which are detrimental to the safety and health.”
[5]Other government reports, such as the Pranab Sen Committee Report indicated a higher slum population of approximately 90 million (as of 2010)
[6]Vishakapatnam (44%), Jabalpur (43%), Mumbai (41%), Vijaywada (41%) and Meerut (40%); Source: Government of India Statistics
[8] Housing and slum UN Habitat News, Naples Italy, (September 5, 2012)
[9]Source: Deccan Herald, “Dharavi Self-Created Special Economic Zone for the Poor”, 2011
[10] Source: Pranab Sen Committee Report, 2010
[11] For a more detailed perspective on the future of urban management systems, see Grand Design and Society: Creating the Cities of Tomorrow on GPC’s website


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