* How the country designs its cities, towns and villages will determine the degree to which it can buttress further economic and social development, and consequently determine its place in the global order
* India’s abrupt swing from a Nehruvian socialist State to a semi-open market post 1991 meant that, broadly, the industrial base entered with neither the adequate capacity to enjoy internationally competitive economies of scale, nor the necessary deep roots in India’s small towns and villages
* Empires of the past capitalised on India’s large population by designing cities that optimised resources while simultaneously investing in infrastructure that supported manufacturing, commerce, and education
As India steps into a post-Covid paradigm, its urban and rural development processes will be compelled to take a new and exciting trajectory. A confluence of economic and technological factors is set to accelerate the country towards a Fourth Industrial Revolution, a period involving comprehensive digital penetration and wide adoption of leapfrogging technologies by an increasingly literate society.
As India’s demographic dividend plays out against this backdrop, the country will capitalise on both reforms and new connectivity infrastructure to create an economy that most today would find hard to imagine. While predicting the exact nature and timing of this transformation is a challenge, trends in urbanisation will alter to fit this change. The structural shift ushers in a once-in-a-century opportunity to improve the lives of three-quarters of India’s population. Importantly, how the country designs its cities, towns and villages will determine the degree to which it can buttress further economic and social development, and consequently determine its place in the global order. For this, the public and private sectors can combine valuable lessons from India’s ancient past — when it continuously controlled the largest share of global GDP for millennia — with modern-day solutions for sustainability.
The state of affairs
Urban development post Independence has largely been characterised by foreign architectural layouts, which often lacked consideration for demand growth in housing, transportation, electrification, and sanitation. In many ways, it also took marginal cognisance of the environment, the need for inclusive spaces for knowledge exchange and cultural interaction, and the value of traditional architectural designs in providing sustainable solutions for urban problems. The lack of regulation enforcement and transparency created haphazard, unwieldy metropolises, left heaving under their own weight and bursting at the seams. This has yielded diminishing returns in productivity on several levels, especially in comparison with their counterparts in developed and emerging economies. India’s labour productivity was nearly one-and-a-half times that of China’s in 1978, and now sits at around half. Meanwhile, rural India either barely developed or grew organically with limited planning.
In 1960, American economist Walt Whitman Rostow, backed by empirical studies, postulated a development theory suggesting that a State goes through five stages during its transition from a traditional, pastoralist society to a mass consumption one. In this framework, the expansion of the ratio of output from the “secondary” or goods-producing sector to the “primary” or agricultural space is the inflection point between the economy’s second stage (pre-take-off) and third (take-off). The fourth stage is typified by the shift of focus in manufacturing from capital goods to consumer durables; or, in a technological age, the spawning of a services sector.
India’s abrupt swing from a Nehruvian socialist State to a semi-open market post 1991 meant that, broadly, the industrial base entered with neither the adequate capacity to enjoy internationally competitive economies of scale, nor the necessary deep roots in India’s small towns and villages. While the lack of connectivity infrastructure is partly to blame, the reality that India had to contend with was that the services space was the lowest hanging fruit in a newly liberalised economy.
Anchored in the cities, the ensuing national economic development became fragmented and uneven with large regional variations in wealth distribution. The move from a predominately agrarian economy to a service-oriented one — without a significant enough rise in share of total output from the industrial sector — had ramifications in the way urban and rural clusters grew. In the past, labour force transition across sectors was coupled with rural migration to megacities and Tier-II towns, contributing to a fourth of labour productivity gains since 1978 at an average of 0.9 per cent a year. However, the constraints facing existing metropolises are such that, in the future, sustainable small-town development will determine the extent to which labour can shift from agriculture to both manufacturing and services, in-situ.
Lessons from the ancient past
For the best part of the last two millennia, India’s leading position in global GDP contribution was predicated on many of the same fundamentals that are in place today. Even going further back to 4000-3000 BCE — the early period of the Saraswati-Sindhu and Sangam-era Vaigai Valley Civilisations — India was a major power that engaged extensively in international trade. What made the empires of the yore capable of long spells of dominance was the way they efficiently harnessed factors of production — land, labour, capital, and entrepreneurship. This happened within cities, which were meticulously planned.
Without water, there is no life. Recognising this, the Saraswati-Sindhu and Vaigai cities invested in sophisticated water harvesting and drainage systems along with a network of reservoirs engineered to take advantage of the surrounding topography to optimise flows. This ensured cleanliness, disease prevention and efficient irrigation, on which they placed significant value as the bedrock for development. Even in Shortugai on the Afghan-Tajik border, in the upper reaches of the Saraswati-Sindhu Civilisation, over 25 km of canals were discovered, pointing at dryland farming in the strategic trading outpost some 5,000 years ago. Yet, today, the importance given to an urban cluster’s “water independence” has diminished in public thought.
India’s water demand is set to outstrip supply twice over by 2030; and while Himalayan glacial melt, accelerated by global warming, is exogenous, the State has done little to curtail water mismanagement, which has resulted in the depletion of the groundwater table in key agricultural regions. In this context, the effort by the Jal Shakti ministry to provide universal piped water by 2024 will become sustainable if local sources are utilised and drip irrigation is implemented as a part of village planning.
A salient feature of India’s “golden eras” — from the Saraswati-Sindhu to the Kushan period and beyond — was the standardisation of bricks and regulation of building techniques. Ancient Indus’s preference for baked and sun-dried bricks over mud blocks helped ensure longevity of construction, and mass production was enabled using moulds of 4:2:1 and 3:2:1 dimensions. The emphasis on high-quality material, despite the steep upfront costs, kept with the concept of developing lasting, organised urban centres for which repair expenditures were minimised. Taking a leaf out of this, newly urbanising regions with overarching rules on quality control can utilise prefabricated parts, for which replacement costs and upkeep is kept to a minimum. India’s smart city projects will have to take the next step into the rural space and engage the latest technology to continuously monitor and optimise the delivery of municipal services and track infrastructure roll-outs.
Over the millennia, trading guilds proved to outlast empires, ensuring a relatively smooth continuity of economic activity through periods of political upheaval. This lasted until the invasions from Central Asia around 800 years ago, which ultimately broke the back of a gold-collateralised economy. However, through their heydays, these merchant guilds leveraged existing city infrastructure to facilitate trade with continents afar to benefit from competitive advantage in domestic industries. From the Harappan times through to the Chola period, coastal cities placed value on developing ports and warehouses as a part of their vast merchant naval ecosystem. At the forefront of global metallurgy and textile production, the industrial base from the 2nd millennium BCE until British colonialisation often demanded the dedication of entire towns to specialisation. While this continues in part today, rural India has yet to transition its resources and human capital into the industrial space such that it gains economies of scale and international competitive advantage. However, supported by physical and digital connectivity, specialist industrial hubs have a chance to increase labour productivity and wealth generation, which feeds back into creating ancillary services jobs. For this, the cities need to be designed with spare capacity with future projected growth in mind, the detailed planning of which can guarantee development projects work in lockstep.
Education, not literacy
Fostered by knowledge exchange and multidisciplinary education, entrepreneurship is critical for pushing the boundaries of innovation and staying ahead of the curve in a competitive free market. While little is known about formal tutelage in the Indus period, the legendary successes of Takshashila, Nalanda, Vikramshila, Sharada Peeth and Pushpagiri in the centuries that followed, point at the institutional importance lent to a balanced education covering both sciences and the arts. Unlike many modern Indian universities, the campuses were integral parts of thriving, multifaceted urban centres. This gave the opportunity for the cross-pollination of ideas, which resulted in achievements across the academic spectrum. Many of these were in pure mathematics and medicine, and they travelled with or got commercialised through the guilds. Taking a cue from this and combined with e-learning, new educational institutes can grow in the urban mix and benefit from interaction with industry.
Empires of the past capitalised on India’s large population by designing cities that optimised resources while simultaneously investing in infrastructure that supported manufacturing, commerce, and education. Today, reflecting on their achievements, a balance must be struck between State-mandated long-term growth planning and private sector-driven development in urbanising clusters that host layers of modern economic activity. Therein, India has a unique opportunity to rebuild itself in the image of its past glory, brick by brick.
Surya Kanegaonkar, a finance professional passionate about Indic culture and global geopolitics, is based in Zug, Switzerland