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National Commission on Urbanization (N.C.U.) – URBAN POVERTY

Growing Concern for Urban Poverty:

Over the past three decades, India has made noticeable progress in accelerating economic growth and reducing poverty. While this record is impressive, poverty in the urban areas continues to be a matter of heightened concern for India’s development policy and strategy.
clip_image002Poverty in India, as in many other developing countries may have begun to urbanize itself, and as urbanization picks up speed, poverty in cities and towns may worsen, and impact negatively on the country's growth and other development goals and objectives. Even at the current level of urbanization which is extremely low by most comparisons (29.6% : 2009), and an equally low rate of urban population growth, urban deprivation levels are high, with cities and towns unable to provide basic shelter and associated infrastructural services.
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According to the National Sample Survey Organisation (NSSO), 40-50 percent of urban population lack safe drinking water and basic sanitation; nearly 35 percent of urban households live in extremely crowded conditions and many more live in squatter and slum settlements. Other human development indices for urban areas such as infant mortality rates (IMR), life expectancy, and literacy rates particularly among females, even after registering improvements, continue to be in an unsatisfactory state.
For one thing, despite an extraordinarily large increase in the urban share of the gross domestic product (GDP) from 41 percent in 1980-81 to 51.7 percent in 1999-2000 and currently estimated at about 60 percent – the numbers of the urban poor have continued to rise, with their share in the total having escalated from 18.7 percent in 1973-74 to 26.8 percent in 2004-05. Many observers attribute such a rise in the numbers of the urban poor to the forces of urbanization.

Defining Urban Poverty:

Urban poverty is a complex phenomenon and has many dimensions. One dimension is clearly that of poverty measurement. On the one hand, there exists a general acceptance of the proposition that poverty reflects the inability of an individual to satisfy certain basic minimum needs. The inability is expressed in terms of a level of income or expenditure that is considered necessary to satisfy those minimum needs.
Those who are not able to attain that level of income or expenditure are counted as poor and others as non-poor. According to this criterion which has been decomposed into laying down the basic minimum needs i.e., the calorie and associated non-food needs and the corresponding expenditures, there were in 2004-05, 80.8 million persons or 25.7 percent of the country's total urban population, who were unable to attain the requisite level of expenditure to stay above the poverty line and were identified as urban poor.
The average monthly per capita consumption expenditure of the urban poor was about Rs. 400.81, 34 percent lower than the threshold level of Rs. 538.6, considered essential to stay above the poverty line.
According to the Eleventh Plan, these settlements lack water and sanitation, have high incidence of vector borne diseases, and are vulnerable as they have no back-up savings, food stocks, or social support systems. It adds: “even though there is concentration of health care facilities in urban areas, the urban poor lack access; initiatives in the country to date have been limited and fragmented”.

Characteristics of urban poverty:

Most studies attempting to describe urban poverty have focused on drawing out the characteristics of urban poverty, often by comparing rural with urban poverty. However, there is still much debate as to whether urban poverty differs from rural poverty and whether policies to address the two should focus on different aspects of poverty.
In some views, rural and urban poverty are interrelated and there is a need to consider both urban and rural poverty together for they have many structural causes in common, e.g. socially constructed constraints to opportunities (class, gender) and macroeconomic policies (terms of trade). Many point to the important connections between the two, as household livelihood or survival strategies have both rural and urban components (Satterthwaite 1995).
Baker (1995) and Wratten (1995) illustrate this point in terms of rural-urban migration, seasonal labour, remittances and family support networks. Baker (1995) illustrates how urban and rural households adopt a range of diversification strategies, by having one foot in rural activities and another in urban. Conceptualising urban poverty as a separate category from rural poverty is also problematic because of different yardsticks for defining urban in different countries. The urban-rural divide is more a continuum rather than a rigid dichotomy.

Approach to Urban Poverty Challenges:

It is now widely recognised that the rapid growth of urban populations has led to a worsening in absolute and relative poverty in urban areas. Urban poverty has, until recently, been low on the agenda of development policy because of dominant perceptions of urban bias and the need to counter this with a focus on rural development policy. However, policy interest in urban issues is increasing as a result of two phenomena:
· projections of a large and increasing proportion of poor people living in urban areas, partly as a result of urbanisation;
· and claims that structural adjustment programmes - which have removed some of the urban bias, by removing price distortions - have lead to a much faster increase in urban poverty than rural poverty.
There have been two broad traditions in policy approaches to urban poverty (Amis 1995; Moser 1995). The first set of approaches have focused on the physical infrastructure problems of housing, sanitation, water, land use and transportation. Recently there has been more emphasis on private investment and an increased focus on institutional and management aspects of urban development.
The second set of as employment, education and community services. Recently such approaches have put a lot of emphasis on sustainability issues and community involvement/participation in projects and programming.
Policy and programme intervention aimed at directly reaching the urban poor have evolved in India as a result of a broad based appreciation and understanding of the problems of urban poverty as also the realization that income growth by itself may not be sufficient to alleviate urban poverty and may need re-distributional inputs, including direct transfers.
The 1980s explicitly recognized the problems of the urban poor which were seen to be linked with creation of employment opportunities, shelter upgrading, and access to basic services involving community level organisations.
The National Commission on Urbanisation (NCU) set up by the Government of India in 1988 recommended that the amelioration of urban poverty should be accorded the same priority as that given to rural poverty.
As a follow up of the recommendations of the NCU, the Government of India in 1989 adopted a four-pronged strategy of addressing the issues of growing incidence of poverty in urban areas comprising:
(a) Employment creation for low-income communities through promotion of micro-enterprises and public works;
(b) Housing and shelter upgradation;
(c) Social development planning with special focus on development of children and women; and
(d) Environmental upgradation of slums.

Summary of Programmes, Costs & Benefits:

Programme for Enhancement of Income and Employment Opportunities :
1. National programme of employment training for urban poor youth.
2. National programme of credit support for expanding micro-enterprises and technological up gradation.
3. Micro-enterprise infrastructure development support (marketing and production centers).
4. Marketing development supports.
5. New programmes of public assets creation for promoting wage employment for the urban poor.
Extension of Basic Services:
1. Universalization of Urban Community Development (UCD) and Urban Basic Services (UBS) activities.
2. Educational support for extension of family planning and maternal and child health services.
3. Intensification of non-formal education for school drop-outs and working women.
4. Slum Improvement, shelter up gradation, sites and services schemes, land supply, tenurial security and facilitation through participatory approaches and NGO involvement.
5. Extension of public distribution system.
6. Extension of the family security programme.
7. Support for innovative programmes of voluntary agencies.
8. Support for training and action research in urban poverty.
National Programme of Employment Training for Urban Poor Youth:
Under the National Programme, employment Training is recommended for urban poor youth, it is proposed to train about lakh young persons from urban poor households annually (about twenty lakh youth over a ten-year period). A set per cent of those who are trained get jobs or start their own enterprise after training. The rest would get immediate relief through stipendiary incomes and might find indirect uses for the skills learnt by them.
The training programmes should embrace manufacturing trades as well as skills needed for the tertiary sector — e.g. Domestic service, crèche and balwadi teaching, health visiting, etc. Consultants and trainers should be drawn from, formally trained professionals and also from amongst the poor themselves who have made very successful ventures out of the skills being taught.
Most of the services can become affordable and generate their income momentum from the community itself.
National Programme of Credit Support for Expanding Micro-enterprises & Technological Up gradation:
The coverage of the Self-Employment Programme for Urban Poor (SEPUP) needs to be broadened by setting apart about 5 per cent of total bank lending under the priority sector urban poor over a period of 5 years. The goal of directing credit flows towards supporting the economic activities of the poor should be pursued w25ith firm determination. The urban poor entrepreneurs have pointed to lack of credit as the most pressing constraint on the expansion of their business, it need hardly be pointed out that the lesson of integrating short-term credit with marketing of goods and long-term credit for upgrading production infrastructure applies with as much force here as it does in the case of rural credit.
Micro-Enterprise Infrastructure Development Support (Marketing & Production Centers):
It is recommended that the municipal corporations and municipal councils should be encouraged and assisted to develop about ten lakh small-enterprise marketing and production centers through credit support. Most of them should be outlet centers in business areas to support group production activities in slums and other poor areas where women are organized to produce eatables, clothes or other materials. They should preferably be controlled by the cooperatives or non-formal groups. Sites and services projects should be oriented to incorporate such marketing and production centers. Town planning rules may need suitable modification from this point of view. Loans will be required at a higher level by entrepreneur groups/cooperatives which are given possession of these units.
Developing Marketing Supports:
Credit support alone is not enough. Goods produced by the urban poor need to be marketed at a price which can provide reasonable returns to the producers. The producers also need feedback regarding preferences, habits and tastes of consumers. The market- participation of the poor must be expanded considerably if substantial income flows in their favor are to be ensure0d.
Micro infrastructural support is essentially meant to be a device to expand the business of local producing groups. However, social entrepreneurial development for handling marketing responsibilities is essential if the intentions behind the proposal are to be adequately realized. The producers’ groups will have to be organized into cooperative forms so that they can bid for bulk government orders, price preference and facilities being given to such cooperatives to produce articles of the desired standard. To impart a sense of direction and urgency, even targets can be set and monitored for a state-supported co-operative and a purchase system regarding the quantum of goods to be purchased by them from approved organizations of very small producers for eventual sale to the public.
New Programme of Public Assets Creation for Providing Wage Employment amongst Urban Poor:
Expansion of wage employment is needed for those who do not opt for self employment ventures. The small and- medium towns which require investment in: public works on a vast scale offer suitable opportunities for launching such a programme. Compared to rural works, these are likely to be more material-intensive. Labor-intensive repair and maintenance of physical infrastructure and services can also be planned as part of a national programme of public asset creation for providing wage employment amongst the urban poor. Priority could also be given to construction of micro-infrastructural units discussed earlier.
While possibilities of land and water resource development, construction of road and common amenities and development self-help and mutual-aid housing with the help of labor-intensive techniques would favor small and medium town developme1 projects, projects of labor intensity could b found in the larger cities also. The more important effect of the public asset creation programme would be maintain the minimum wage level as prescribed by law without relying excessively o enforcement machinery with its restriction effects and liability to leakage.
Universalization of Urban Community Development (UCD) & Urban Basic Services (UBS) Activities:
The pilot project phase of the UCD/UBS programmes have provided sufficient experience for designing and tooling participatory programmes which are vital f successfully organizing development activities amongst the urban poor. The utility of the UBS/UCD institutional structures in coordinating the services and enlisting contributions from citizens in, terms of money, material, experience and Loyalty has been demonstrated.
Among the tasks UBS/UCD will have to give maximum attention is assistance in community education for building local organizations for a variety of purposes—housing, fair price distribution, economic activities, child nutrition and mother care, legal and labor contracts and a number of others. It has to disseminate information on a number of subjects relevant to daily living like sources of credit and assistance programmes for basic sanitation, water and other amenities.
Augmentation of Building Funds for EWS Housing, Slum Improvement, & Sites & Services Schemes; Security of Land Tenure and Facilitation.
The present rate of fund mobilization for the economically weaker sections (EWS) shelter support will have to be stepped up nearly three and half times to reach a level of about Rs 700 crores a year, at which level it will have to be maintained over a period of 10 years.
Modifications in sites and services schemes are needed to ensure that they do not become middle-class camouflage to cover appropriation of scarce land resources in their favor at subsidized rates in the name of the poor. Tenurial security is fundamental to any improvement process based on the participation of the occupant. Threats of eviction operate against efforts for durable improvement. Provision of homestead land to those families which do not have such land elsewhere and have been living in the city for more than five years would itself be a fairly radical measure, but it has to be accompanied by provision for basic infrastructure development and selected housing. loans preferably to groups. Unless newly allocated sites are developed for use, there is a likelihood of land parcels passing into better off hands.
Extension of the Public Distribution System:
The public distribution system has been geared to supplying limited quantities of certain essential goods like cereals, edible oils, pulses and kerosene at fair prices to card holders.
If, public distribution card holders were confined to those whose incomes are below the poverty line, it should be possible to meet about 80 per cent of the needs of the poor for rice, instead of the present 40 per cent.
Revalidation of cards every year may be cumbersome but would be economical because the rise of families above the poverty line would be reflected in the turnover and ghost holder ship would be more often detected.
Extension of Family Security Programme:
While employment programmes would cover able-bodies persons, the aged, disabled and woman-managed households would require social security cover as they are unable to participate in the work activities of employment programmes. The eligible population has to be identified and educated about them benefits available to them.
Educational Supports for Extension of Family Planning & Maternal & Child Care Services:
Special efforts including strengthening of the mother and child care component of UBS/UCD for which a universal coverage of areas of urban poverty concentration is recommended. Extension of other basic services like water supply, latrine connections, electricity and other shelter related basic services. Non-formal educational programmes on mother and child care to be given extensive coverage.
Intensification of Non-formal Education for School Drop-outs & Working Women:
School timings and curricular requirements to be flexible and much less formal than at present, if urban poor children are to succeed in getting enrolment. Besides, some income supplementation in the form of food supplements, means-and-merit scholarships, or income from practical gainful activity in school premises, may induce parents to send their children to school. The non-formal education stream would create part-time job opportunities for educated men and woman who should preferably be drawn from poor families in the same area and then trained.
Support for Innovative Programme of Voluntary Agencies:
The wide variety of roles that the non-governmental, voluntary agencies play in various urban situations is often not appreciated by governments and their agencies. Assisting the weaker sections in obtaining services as well as the state in effectively delivering them; providing professional services in research, project formulation and implementation; monitoring effects of developmental actions; highlighting their contra- dictions; generating alternatives; advocating causes; protecting and upholding values; organizing people to actualize their internal, dormant potentials and strengths and to assert their rights; strengthening democratic values and institutions; and facilitating participatory processes through education and intermediation, are some of the roles that voluntary agencies perform at the community city, state and the national levels. The watchdog role, the corrective role, the intermediary role, the innovative role and the service- provider role are predominant in the list of priorities of voluntary agencies whose number and potential in urban areas is no longer insignificant.
Support for Training and Action Research in Urban Poverty:
The study and research agenda for urban poverty alleviation efforts will be quite complex and extensive, and will need the establishment of additional research institutions which would cooperate with like-minded agencies prepared to make contributions to and support initiatives in the area of poverty eradication.


Addressing urban poverty is an integral part of the way in which the entire process of urbanization is viewed and understood and the way in which it is managed and governed. Urbanization can be exclusionary as it has often been - no formal place for the poor in cities and towns being the obvious evidence - or it can be made inclusive by jettisoning the archaic ways in which cities are planned, designed and governed. The size, depth and nature of urban poverty are directly affected by these considerations as these are by other macro-economic and global events.
Urban poverty with over 25% of urban population is largely concentrated in small and medium towns. Though the incidence of poverty is lower in larger cities, the poor face acute shortage of basic amenities there.
It is mentioned that the level of urbanisation in India and its pace over time has been amongst the lowest in the world. It has in fact been lower than the previous decade in 1991-2001. The slow growth of urbanisation is also due to the structure of employment in India where a large proportion of total number of workers continue to be engaged in agriculture in spite of its slow growth and declining share in the GDP.
Quote of the Day:
No one can be free who does not work for the freedom of others.
--Shashiikant Nishant Sharma
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