yazadjal.com

PM Manmohan Singh has just launched an ‘urban renewal’ plan that mainly talks about ‘helping the urban poor’. This, after parliament has legislated to the government the responsibility of ‘guaranteeing employment’ to the rural poor. For how long will the poor suffer such insincere affection? Blatant ‘pork barrel politics’ designed to add to the powers and coffers of our misproductive babus is the last thing the poor need.

As far as our urban areas are concerned, their most important requirement today is transport connectivity, both without the city or town as well as within. There is lots of land around Gurgaon, but forests of highrises are erupting 30 kms from the city centre, where our netas live in hundreds of palatial bungalows. There are no transport links between Delhi and Gurgaon. With transport connections, we could add to the supply of usable land, that is, usable to the city, and outlying areas would develop. In many, many ways our quality of life will improve dramatically. In the terminology of economics, our productivity would surge upwards, and our incomes would increase. My question is: Why is transportation not getting the importance it deserves?

The answer lies in the fact that the Indian state operates twin monopolies in this area. It is the roads monopolist; it is also the land monopolist. So much raw economic power over the real estate market will surely be exploited by our corrupt netas and babus to the hilt. That is why they deliberately undersupply roads so as to boost the price of urban land, which they have enormous powers over.

The Bangalore-Mysore Expressway is being held up because of issues related to land, as is the new airport proposed for Bangalore. It is reported that politicians privately bought land affected by these projects in advance, so as to be able to speculate on them, by virtue of their ‘insider information’.

We must corporatise the government’s highway monopolist and allow free competition from any highway developer from anywhere in the world. A small secretariat can be employed to pay out shadow tolls to them. We must also allow 100 per cent FDI in real estate development, so that private real estate developers can join in league with private road developers to build and link suburbs and satellite townships. Private investments must also be welcomed in areas like tramways, suburban and underground railways.

The state’s land monopoly must also go. This is basically a legal matter. Legslation empowering ‘urban development authorities’ must be repealed. Powers over land must be taken away. The ability to misuse ‘eminent domain’ must be legally curbed.