From Mumbai To Mumbai-Plus: A New Charter

Paul Romer, an economist and professor at New York University, is an ardent advocate of the idea of “charter cities.” Charter cities are cities run to rules different from those governing the rest of the country or the state they are located in; their policy independence is guaranteed by state or federal government. If you accept the logic that smart urbanisation is the way to creating growth and jobs for millions of Indians, charter cities are a key to achieving those goals.

Hong Kong and Shenzhen, the latter being the spearhead of Deng Xiaoping’s project of capitalist rejuvenation of the Chinese economy in the 1980s, are two cities that come closest to the idea of a charter city. In Romer’s words, charter cities have to be big, since millions of people will gravitate there; and they must be “reform zones”, where there is no backlog of existing policies to hold back experimentation and new types of law-making. Romer likes to think of charter cities as startup cities, since “you can propose something new without having to go through a long process of consultation and agreement amongst the people that might be affected by a change, one that would inevitably mean that a change that some people do not want is imposed on them.”

Romer has something here, but he may be at least partly wrong on two counts: his emphasis on large parcels of land to take care of millions of migrants; and the idea that cities may be smarter if they are created from scratch, rather than superimposing reforms on unwilling existing cities. If charter cities can only be created from the ground-up, there is no hope for existing, thriving megalopolises such as Mumbai; and, more importantly, this thought runs contrary to how successful cities rose in the past.

Cities evolve; they seldom get created through “intelligent design”. Historically, cities have been hubs of growth and jobs, and they are also economical users of land. This is the key to their higher productivity, and their smartness comes from putting thousands of smart people in close proximity in small spaces. The more the number of creative, smart people per square mile, the higher will be a city’s gross domestic product(GDP) and growth and potential for job creation. You cannot easily get smart people to come and live in a synthetic new city; they come because something that has already worked in a city attracts them.

Take the case of Mumbai, which was a bunch of seven islands originally inhabited by the Kolis, a fishing community. Its importance grew during the Mauryan period (third century BCE) when they acquired control and started making it a centre for Hindu and Buddhist culture. But it was the British-Dutch rivalry on the western coast of India that changed Mumbai’s fortunes. Growing Dutch power in the seventeenth century forced the British in Surat to acquire Mumbai from the Portuguese, and by the eighteenth century, Mumbai became an important trading town, doing business with the hinterland and West Asia. By the time the British left India, Mumbai had grown into the country’s commercial capital, leaving behind Kolkata. Wrong policies, including the policy of freight equalisation, shifted India’s growth node westwards, making Mumbai’s position unassailable.

Put simply, Mumbai became India’s commercial hub by accident and evolution; it was not created by charter.

However, that does not mean it will evolve into a better city than it is today without a new charter. Its potholed roads, choked drains, horrendous traffic jams, overcrowded trains, and slum sprawls are evidence to Mumbai’s growing unattractiveness. Mumbai may still be generating wealth and taxes, but most of its wealth is not creating a higher quality of life for its residents. And when we talk Mumbai, we are talking about the entire Greater Mumbai agglomeration, which includes Navi Mumbai, Thane, and several other municipal entities to the north and north-east of the island city.

What Mumbai needs is a new political and economic charter, where governance can be improved and the city made an even bigger wealth creating hub than it is now. The key hurdle to negotiate is the power of vested interests who control its fortunes today: the real estate lobby, and politicians and bureaucrats who feed from the same corrupt trough. Mumbai’s current charter is implicitly defined by realtors and politicians, not citizens. We can prove this with a simple circumstantial illustration: the priciest parts of central and south Mumbai would not have been so pricey if something as simple as a bridge had been built to the mainland on the east of the island city. There is plenty of land towards the east across the harbour, but actual development is taking place towards the north and north-east, with the western and central suburban lines providing the development logic.

Contrary to what Romer believes, land isn’t the problem even in existing cities. Wrong policies are. Mumbai has enough land to the east and, moreover, can also grow vertically. Both are constrained only by lack of transport and social infrastructure, which can come only from sensible policies. The fact that there is a huge uproar whenever the state government talks of raising floor-space-indices(FSIs, which prescribe the multiple for development of any given area of land) suggests that vested interests with money to lose in existing high-priced properties may be thwarting the reforms.

The question to ask is: given the vice-like grip of the vested interests, why would Mumbai get a new charter?

The answer lies in politics, not economics. India is ripe for city-based parties which will provide a natural outlet for urban aspirations, but the Shiv Sena has a dual character which militates against this: it is largely Mumbai-based, but its history comprised phases where it wanted to drive out non-Marathi migrants from the city. Migrants are always key to a city’s growth. Later on, the Sena moved to a mix of Hindutva-cum-Marathi manoos positioning, but this too is a limitation since sizeable sections of Mumbai’s trading community are Muslims.

There is space for an urban political party which can then negotiate a charter of higher rights for the city, just as the Telangana agitation succeeded in creating a new state. The future of India lies in smart urbanisation driven by charter cities, and Mumbai should be the place to start a new kind of urban politics from which to build vibrant communities and better quality jobs.

And when we talk Mumbai, we mean the entire bundle of cities and satellite towns adjacent to it. In short, Mumbai Plus. It doesn’t mean having one large and unwieldy municipality, but multiple ones, each empowered to fix its problems and invest in its growth. What we need is one charter for Mumbai Plus.