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In India, dynamism meets dysfunction

In India, dynamism meets dysfunction
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First Published: Thu, Jun 09 2011. 09 32 PM IST

Rapid expansion: In Gurgaon and elsewhere in India, economic growth is often the product of a private sector improvizing to overcome the inadequacies of the government. Ruth Fremson/NYT
Rapid expansion: In Gurgaon and elsewhere in India, economic growth is often the product of a private sector improvizing to overcome the inadequacies of the government. Ruth Fremson/NYT
Updated: Thu, Jun 09 2011. 09 32 PM IST
Gurgaon: In this city that barely existed two decades ago, there are 26 shopping malls, seven golf courses and luxury shops selling Chanel and Louis Vuitton. Mercedes-Benzes and BMWs shimmer in automobile showrooms. Apartment towers are sprouting like concrete weeds, and a futuristic commercial hub called Cyber City houses many of the world’s most respected corporations.
Gurgaon, located around 24km south of New Delhi, would seem to have everything, except consider what it does not have: a functioning citywide sewer or drainage system; reliable electricity or water; and public sidewalks, adequate parking, decent roads or any citywide system of public transportation. Garbage is still regularly tossed in empty lots by the side of the road.
Rapid expansion: In Gurgaon and elsewhere in India, economic growth is often the product of a private sector improvizing to overcome the inadequacies of the government. Ruth Fremson/NYT
With its shiny buildings and galloping economy, Gurgaon is often portrayed as a symbol of a rising “new” India, yet it also represents a riddle at the heart of India’s rapid growth: How can a new city become an international economic engine without basic public services? How can a huge country flirt with double-digit growth despite widespread corruption, inefficiency and governmental dysfunction?
In Gurgaon, and elsewhere in India, the answer is that growth usually occurs despite the government rather than because of it. In Gurgaon, economic growth is often the product of a private sector improvising to overcome the inadequacies of the government. To compensate for electricity blackouts, Gurgaon’s companies and real estate developers operate massive diesel generators capable of powering small towns. No water? Drill private borewells. No public transportation? Companies employ hundreds of private buses and taxis. Worried about crime? Gurgaon has almost four times as many private security guards as police officers.
“You could call it the United States of Gurgaon,” said Sanjay Kaul, a civic activist critical of the city’s lack of planning who argues that Gurgaon is a patchwork of private islands more than an interconnected city. “You are on your own.”
Gurgaon is one of India’s fastest-growing districts, having expanded more than 70% during the past decade to more than 1.5 million people, larger than most US cities. It accounts for almost half of all revenues for its state, Haryana, and added 50,000 vehicles to the roads last year alone. Real estate values have risen sharply in a city that has become a roaring engine of growth, if also a colossal headache as a place to live and work.
Birth of a boom
Before it had malls, a theme park and fancy housing compounds, Gurgaon had nilgais, a kind of antelope. Or so Kushal Pal Singh was told during the 1970s when he began describing his development vision for Gurgaon. It was a farming village whose name, derived from the Mahabharata, means “village of the gurus”.
“Most people told me I was mad,” Singh said.
By 1979, Singh had taken control of his father-in-law’s real estate company, now known as DLF Ltd, at a moment when urban development in India was largely overseen by government agencies. In most states, private developers had little space to operate, but Haryana was an exception. Developers built the infrastructure inside their projects, while a state agency, the Haryana Urban Development Authority, or Huda, was supposed to build the infrastructure binding together the city.
Slowly, Singh began accumulating 3,500 acres in Gurgaon that he divided into plots and began selling to people unable to afford prices in New Delhi. Still, growth was slow until after 1991, when the government introduced market economic reforms. Outsourcing required workspaces for thousands of white-collar employees, the type of commercial space seriously lacking in India.
Gurgaon had advantages: It was close to the New Delhi airport and a Maruti Suzuki automobile plant had opened in the 1980s. But Gurgaon still seemed remote, and DLF needed a major company to take a risk to locate there. The answer would be General Electric Co. Singh had become the company’s India representative after befriending Jack Welch, GE chairman. When Welch decided to outsource some business operations to India, he eventually opened a GE office inside a corporate park in Gurgaon in 1997.
“When GE came in,” Singh said, “others followed.”
Self-contained islands
It is 8pm on a recent Tuesday, time for the shift change at Genpact, a descendant of GE and one of Gurgaon’s biggest outsourcing companies. Two long rows of white sport utility vehicles and cars are waiting in the parking lot, yellow emergency lights flickering in the early darkness, as employees trickle out of call centres for their ride home. These contracted vehicles represent Genpact’s private fleet, a necessity given the absence of a public transportation system in Gurgaon.
From computerized control rooms, Genpact employees manage 350 private drivers, who travel roughly 97,000km every day transporting 10,000 employees. Employees book daily online reservations and receive email or text message “tickets” for their assigned car. In the parking lot, a large LED screen is posted with rolling lists of cars and their assigned passengers.
Faced with regular power failures, Genpact has backup diesel generators capable of producing enough electricity to run the complex for five days (or enough for about 2,000 homes). It has a sewage treatment plant and a post office, which uses only private couriers, since the local postal service is unreliable. It has a medical clinic, with a private ambulance, and more than 200 private security guards and five vehicles patrolling the region. It has ATMs, a cellphone kiosk, a catered cafeteria and a gym.
“It is a fully finished small city,” said Naveen Puri, a Genpact administrator.
Actually, it is a private island, one of many inside Gurgaon.
“We pretty much carry the entire weight of what you would expect many states to do,” said Pramod Bhasin, who this spring stepped down as Genpact’s chief executive. “The problem—a very big problem—is our public services are always lagging a few years behind, but sometimes a decade behind. Our planning processes sometimes exist only on paper.”
Not all of the city’s islands are affluent, either. Gurgaon has an estimated 200,000 migrant workers, who work on construction sites or as domestic help. Even at the fringes of Gurgaon’s affluent areas, large pools of black sewage water are easy to spot. The water supply is vastly inadequate, leaving private companies, developers and residents dependent on borewells that are draining the underground aquifer. Local activists say the water table is falling as much as 10 feet every year.
Yet outsourcing is thriving in Gurgaon, anyway. Last year, a leading Indian industrial association determined that outsourcing was directly and indirectly responsible for about 500,000 jobs in Gurgaon.
Playing catch-up
Sudhir Rajpal, the wiry, mustachioed commissioner of the new Municipal Corporation of Gurgaon, has a long to-do list: Fix the roads, the sewers, the electrical grid, the drainage, the lack of public buses, the lack of water and the lack of planning. The municipal corporation was formed in 2008, and Rajpal, having assumed the city’s top administrative position a few months ago, has been conducting a listening tour to convince people that government can solve their problems.
It is not an easy sell.
In Haryana, developers make campaign donations to politicians and exercise enormous power. Critics say graft and corruption are widespread. Many developers have disregarded promises to construct parks and other amenities. Meanwhile, state agencies such as Huda operate with little accountability. Civic leaders say more than $2 billion (around Rs9,000 crore ) in infrastructure fees collected from Gurgaon have gone into Huda’s general budget without any benefit to the city.
“They used that money somewhere else,” said Sanjeev Ahuja, a veteran journalist in Gurgaon. “The government thinks the private sector will take care of the city: ‘People are rich. If they need water, they can buy water.’”
Some people hope Gurgaon’s new municipal council, which was elected on 13 May to oversee the municipal corporation, will create a political voice for the city capable of forcing action. Eventually, the municipal corporation is expected to assume responsibility for providing services in all of Gurgaon, yet some residents are leery of the change.
Santosh Khosla, an information technology consultant whose family moved to Gurgaon in 1993, has services provided by his developer, DLF. He said DLF had broken numerous promises and did only an adequate job of delivering water and power. Still, adequate is tolerable.
“I’m certain that if it goes to the government,” he said, “it will be worse.”
©2011/the New York Times
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First Published: Thu, Jun 09 2011. 09 32 PM IST