There may be an opportunity before India to urbanise in a healthy, happy and profitable way, especially as we try to resolve the crisis created by Covid-19 pandemic in big towns and the farmers’ agitation in the countryside. This could be just the right window for the government to shed its hesitation in setting up greenfield towns by roping in farmers as partners, introducing a robust auditing framework and bringing on board builders as executors of such projects. The recent grant of Rs 8,000 crore by the Fifteenth Finance Commission to the Ministry of Housing and Urban Affairs to incubate eight new cities has come at just the right time.
Given the positivities that such projects could generate, perhaps the only thing holding them back is lack of trust. Lack of trust between government and farmers, lack of trust between farmers and builders, lack of trust between the common public and builders.
Bridging the trust gap: between govt and farmers
Between government and farmers, there is a long legacy of distrust created over the last two decades by so-called public-private partnerships where farmers’ land was acquired for a song and given to builders. Giving farmers a fair share in the profit of such projects can generate trust. A clearly worded contract with the financials spelt out in detail would be of great help. The one thing missing from a vast range of government projects is a clearly worded contract that spells out the deliverables of all parties and the timelines. The written word helps generate trust.
Land pooling was a methodology devised to avoid such conflicts. But it has rarely worked. In the Magarpatta city model in Pune, farmers formed their own consortium and hired builders to build a township. In our book Jal Swaraj (authored by M Rajivlochan and Meeta Rajivlochan), which documents successful case studies of community management of water supply schemes, ‘taking the initiative’ is underlining theme in each of the stories. So rather than the government choosing the land for a greenfield city, it might actually be better to invite groups of farmers in a 100-kilometer radius of a big town/city, to offer the land needed for townships. Whichever group meets the land requirement, can also execute the project. After all, much of the distrust is due to the doubt that by fixing a spot in advance, someone might be able to jack up the price to make a quick profit. That problem is addressed by not fixing a spot.
Partnering builders and farmers
How is trust possible in the interface between farmers and builders?
One way to deal with this would be to build cities as a straight expenditure procurement contract — the government assumes all the risk and pays for the project in instalments. This way, the farmers are under no pressure to look for builders who are willing to bear the risk. Such a strategy would also considerably lower the cost of the city. Once land cost and risk to the builder is zero, our estimate is that a greenfield township for five lakh people can conceivably be built at a cost of Rs 9000 crore. This cost would also include the cost of building 30,000 houses in the low-income category. It is only when the cost of risk is added, that infrastructure costs balloon ten times this amount.
Still, this might not be enough.
All farmers are not savvy, like the Magarpatta people evidently were. They fear they would be taken for a ride. To assuage such fears, farmers could be offered the services of a consultancy firm they might like to hire for a given period, at government cost. If the government can hire knowledge partners, they can assist the farmers in doing so too.
Builders and public: another key interface
The third key interface is between the common public and builders. In real estate projects across the country, builders have squeezed every ounce of profit out of the project while sacrificing public utility services. If Gurugram, Mumbai and Bengaluru are urban horrors today, much of the responsibility for the situation lies with such builders. It is rare to find a private township where 30 per cent of the space is devoted to urban amenities. Often, open spaces are easily converted to commercial use.
This is the knottiest problem. The only way out is for the government to suggest the town plan, frame bye-laws and audit the project consistently. It could be argued that government auditors can be just as corrupt and can collude with builders. But then in societies, where it is believed that everyone can be suborned and no one has any morality to speak of, nothing works anyway.
Developing small, modern townships as greenfield settlements can create intelligent, socially inclusive, green cities. Urbanisation that depended on densification and going vertical, made sense in a time when communication technologies were poor. In the day and age of connectivity, optic fibre cable and artificial intelligence, development models that suit such technologies make better sense. During lockdown, we saw how quickly companies switched to work-from-home. And by all account, many found significant cost-savings in this model. Perhaps India has reached a stage where better connectivity can change how we visualise urban spaces.
Building new greenfield cities can also be seen as a massive food-for-work programme with one major difference: the assets produced would be of high quality and value created would be permanent. Such projects can provide employment to lakhs of migrant workers.
The only real issue that needs to be resolved is that of building trust.
Meeta Rajivlochan is an IAS officer and author of Making India Great Again: Learning from our History. Views are personal.