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Workshop on Working with the Market: A New Approach to reducing Urban Slums in India

Organised by:

- Wolfensohn Center for Development at Brookings

- National Institute of Urban Affairs (NIUA)

12 November 2010

NIUA, New Delhi

Chetan Vaidya welcomed the participants. He said that Government of India has initiated Rajiv Awas Yojana that aims at Slum-Free Cities. There is also focus on providing support to Affordable Housing in urban India. Understanding of housing markets is important for successful implementation of slum upgradation and affordable housing programs. In this context the workshop is very important.

Ms. Patricia Annez, Urban Advisor, World Bank, presented a paper entitled "Working with the Market: A New Approach to reducing Urban Slums in India" by Patricia Clarke Annez, Alain Bertaud, Bimal Patel and V. K. Phatak. The paper examined the policy options for India as it seeks to improve living conditions of the poor on a large scale and reduce the population in slums. Addressing the problem requires first a diagnosis of the market at the city level and a recognition that slums are a result of the working of the market—not a failure of the market. It shows that government programs that directly provide housing would cost, on conservative estimates, about of 20 to 30 per cent of GDP, and cannot solve a problem on the scale of India’s. Using two case studies, for Mumbai and Ahmedabad, it offered a critical examination of government policies that shape the real estate market and make formal housing unaffordable for a large part of the population. It then illustrated how simple city level market diagnostics can be used to identify policy changes and design smaller assistance programs that can reach the poor. It also examined the linkage between chronic infrastructure backlogs and policies that make housing unnecessarily expensive. Increasing the carrying capacity of cities is essential for gaining acceptance of real estate policies suited to Indian cities. The paper proposes differentapproaches for funding major investments to achieve this goal.

Participants included Mr. K. C. Shivramkrishnan, President CPR, Dr. Indira Rajaraman, Former Member, 13th Central Finance Commission, Mr. Amar Nath, CEO, Delhi Shelter Board, representatives of research organization, international agencies, NGOs, etc. There was extensive discussion at the end of the presentation. Discussions were mainly focused on: implications of raising Floor Space Index with or without densification, reasonable sale of land for financing urban infrastructure, improving access of poor to shelter finance, bifurcation of housing markets for low income and other income households, recognize informal housing and provide improved infrastructure, improved land and market information, capacity of public agencies to manage slum upgradation and affordable housing programs, etc.

Prof. Usha Raghupathi NIUA gave vote of thanks to Ms. Patricia Annez and all the participants of the workshop.

Presentation