The Hindu Business Line : India beyond Delhi and Mumbai

Unlike in the US, where the metros and other cities have distinct reputations in such fields as industry, commerce, education and culture, their Indian counterparts hardly have any activity specialisation — they all have, or intensely aspire to have, all sectors of activity. This is the result of centralised planning polluted with politicking, says Bhanoji Rao.

THE United States of America, the second largest democracy after India, is in its cities and towns. Of its total population of around 290 million, close to 80 per cent lives in classified urban areas. Urban America is well beyond Washington D.C. and New York City. In addition to the two, the top ten populous cities include Boston, Chicago, Dallas, Detroit, Houston, Los Angeles, Philadelphia and San Francisco.

Together, the ten metros account for a third of the total US population and close to 40 per cent of the urban population. It is pertinent to note that these and several other US cities have achieved distinct reputation in fields such as industry, commerce, education and culture. Boston reminds us of Harvard and MIT, institutions with enviable reputations in economics, law, management, medicine, science and technology.

The city and the neighbouring metro area have several teaching hospitals and medical research institutions, on the one hand, and many hi-tech industries, on the other.

The city is the seat of major banking and insurance companies — John Hancock included. The area has a vibrant printing and publishing industry as well. It is said that publishing in America began when an English immigrant brought a printing press to Boston and launched his operations there in 1639.

Chicago is a transport hub, the country's main rail and trucking centre. Chicago's O'Hare International Airport is one of the busiest airports in the world. Detroit is the world headquarters of Chrysler, Ford and GM. Linked to the auto industry, many other activities flourish there.

Dallas has a diversified industrial base and boasts manufacturing facilities in technology-related products, including computers, biomedical products, and electronics. The city serves as a shipping centre for the regional producers of agricultural and mineral products.

Houston, close to major petroleum and natural-gas fields, is the nation's petroleum capital. It has the lead in petrochemical manufacturing and refining and in production of agricultural chemicals, fertilisers, pesticides and oil-field equipment.

Other industries in the Houston area are manufacture of paper products, electrical and electronic machinery, and iron and steel. Education and research have also flourished in recent times. Texas Medical Centre, for example, is globally renowned for organ transplant research.

New York is the financial and commercial capital. A great majority of New Yorkers depend on the service sector for their livelihood. San Francisco and the Silicon Valley are synonymous, just as LA and Hollywood are.

Despite the early expectation that Washington might emerge as a significant trading post, the city's final evolution was as the seat of federal government. The gradual growth of the federal bureaucracy provided the stimulus for the growth of the Washington metro area.

In addition to federal government employees, Washington has many international civil servants serving such organisations as the World Bank, the International Monetary Fund, and the Organisation of American States. All in all, Washington DC is a city of government and related services, including tourism.

The Indian scene

What about the Indian urban scene? As per the Census of 2001, we have an urban population of 291 million, a little less than 30 per cent of total population of 1027 million. Our top ten `urban agglomerations' are Greater Mumbai, Kolkata, Delhi, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune, Surat and Kanpur. They account for 26 per cent of the total urban population. Greater Mumbai leads the pack with over 16.4 million people making up for 22 per cent of the 74 million persons in the 10 metros.

Is New Delhi like Washington, with a concentration of government and tourism-related activities? One way is to look at the employment composition by sector to gauge the thrust areas of economic activity. The Census of 2001 does not provide employment data by detailed sectors of activity. One must, hence, rely on other sources.

Information is readily available on the Internet for Delhi and it is from a survey conducted by the National Sample Survey Organisation. `Workforce' refers to persons gainfully employed, either self-employed or as employees. The results are based on principal activity status — that is, major time spent during the reference period of one year. Survey estimates are based on a sample of 5,102 number of employed persons during 1999-2000.

The employment composition of the Delhi workforce based on the NSSO Survey is: Manufacturing 23 per cent; trade, hotels and restaurants 29 per cent; public administration, education and health 27 per cent; transport and communications, finance and business services 13 per cent; and construction 6 per cent; with the remaining 2 per cent spread across agriculture and mining. The fact is that Delhi is a manufacturing and commercial centre as much as it is the seat of Central government.

Historically, Mumbai prospered as the nation's textile industry hub. The industry employed more than half the total workforce in the early 1990s. Over time, other industries developed and these included petroleum refining, petrochemicals, pharmaceuticals, tobacco, leather, furniture, timber products, ceramics, paper, jewellery and food processing.

Despite the glorious industrial past of Mumbai, the contrast between it and Delhi is not as glaring as one would have expected. The only readily available data, though outdated, are from the 1991 Census and provide the following workforce composition for Mumbai: Manufacturing 37 per cent; trade, hotels and restaurants 25 per cent; public administration, education and health 22 per cent; transport, communications, finance and business services 11 per cent; and construction 4 per cent, with agriculture and mining accounting for the remaining 1 per cent.

Mumbai is all in one: industrial capital, financial and commercial centre and, of course, the home for Bollywood.

Kolkata, too, stands out for a glorious past. It was once the capital of British India and home to the country's jute and paper mills. The British ruled firm since the early 19th century. A couple of decades before Independence, the metro accounted for a third of the entire nation's industrial workforce.

Independence, the partition of the country and numerous other factors hurt the industrial climate of the city. The 1991 Census data indicate that a hefty 58 per cent of the active workforce was absorbed in services, 36 per cent in industry, 4 per cent in construction, and 2 per cent in agriculture and mining.

There is hardly any activity specialisation and orientation in our metros and other towns; they all have or intensely aspire to have all sectors of activity — industry, trade, finance and as many as others. That behaviour is the result of central planning polluted with politicking.

It resulted in regional allocations of steel plants and other industries, with least regard to scale of economies and inter-industry linkages. Even the IIMs, the IITs, the central universities and the research establishments were `allocated' to ensure regional balance and not to build international reputation. It is, perhaps, fortuitous that the Centre has had no role in the allocation of the IT industry; else it too would have been `allocated' across regions.

The result of all the planning plus politicking is that the workforce in the organised sector in the country as a whole stagnated at 27-28 million persons. Neither the top ten metros nor the other 25 cities with a million or more people, nor the relatively smaller towns that run into a few hundred, have grown in a way to evolve into centres of excellence in one or two major activities, which would have contributed new jobs.

For many in Delhi and Mumbai, there is not much of an India beyond those cities. Everything has to happen or must be decided at one or the other place — as if the country begins and ends just there. Moving away from such a well-entrenched practice requires a change in the way the country is governed — impinging on the important matter of Centre-State relations and division of functions.

(To be concluded)

(The author is Professor Emeritus, GITAM Institute of Foreign Trade, Visakhapatnam. Feedback can be sent to bhanoji@vsnl.net)

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