New paths to urbanization, from farms to factories

New Delhi/Chennai/Chakan (Maharashtra): E. Deveraj, a resident of Molachur, some 40km outside of Chennai, spent ₹ 4,000 last spring, waterproofing his house before the onset of the monsoon. As well as a new roof, Deveraj built a fence around his property; it was expensive, but worth it, says Deveraj, even if his chosen building material is rather unconventional.

add_main_imageInstead of the customary branches of the coconut tree, a makeshift thatch made up of reinforced sheets of cardboard padding covers the tiles. Around the yard, the same material has been upended to form a fence, and a third piece fashioned into a trough for feeding the cattle.

His neighbours don’t find this remarkable; many of their own houses are supplemented with scraps from the factories in the region, plastic sheets to cover the doorways, and empty packaging to sit on.

In Molachur, the most commonplace aspects of life are now inextricable from the industrial development that has, in less than a decade, transformed it from a sleepy farming village to one of India’s new towns—they mimic a town, but there is nothing official about it.

Molachur is one of about 2,500 large villages classified as a census town by the Registrar General and Census Commissioner of India to signify populous areas where farming has been replaced by other professions as the main source of livelihood.

Paths to urbanization

The census towns that have emerged in the last decade, after experiencing rapid and often haphazard growth, are not evenly spread across India. In fact, two-thirds of them are concentrated in just six states: West Bengal, Kerala, Tamil Nadu, Maharashtra, Uttar Pradesh and Andhra Pradesh, in that order.

Partha Mukhopadhyay, a senior research fellow at think tank Centre for Policy Research in Delhi, differentiates between the types of growth.sixthMAds

“We are seeing two kinds of urbanization,” he said, “one is suburban sprawl, and the other is more organic growth of towns and villages.”

His colleague Kanhu Charan Pradhan agreed. “Census towns are a state-specific story,” said Pradhan, who is working on a draft paper on the subject.

As part of his research, Pradhan used Google Maps to plot the locations of the 2,500-odd census towns that emerged between 2001 and 2011 on a map of India. The visual effect is striking: dark clusters form around industrial towns such as Kolkata, Chennai and Ranchi; a dense impregnable line of “desakota” (high density, rural-urban agglomeration) runs down the Kerala coast, and smaller bursts appear around Hyderabad, Allahabad, Varanasi and western Uttar Pradesh.

“It’s in-fill development,” said Mukhopadhyay. “A lot of that is happening in Kancheepuram. Some areas just suddenly start to grow very rapidly; urbanization didn’t happen in Delhi, it happened in Gurgaon and Bangalore, and the villages nearby were swallowed. In Chennai, it’s the same.”

His theory is borne out by data. Of the 265 new census towns that have appeared in Tamil Nadu since 2001, 39 are in the northern district of Kancheepuram that borders Chennai and has the highest urban growth rate in the state—65.33% in 2001-2011.

In the middle of that growth is Deveraj’s home, Molachur, on the doorstep of the manufacturing bases of Hyundai Motor India Ltd, Ford India Pvt. Ltd, BMW India Pvt. Ltd and Mitsubishi India, as well as the factories of consumer products makers such as Nokia Oyj, Samsung India Electronics Pvt. Ltd and Motorola Mobility India Pvt. Ltd.

Until 10 years ago, most of Molachur’s inhabitants were dependent on farming paddy, lentils or watermelons, and the rest earned a living from the embroidery trade. But the arrival of the factories created a new ecosystem. While small industries and informal trades faded or moved into the city, new jobs at the factories and their supporting businesses became available. As land prices rose, the temptation to sell was difficult to resist.

Molachur, which had a population of more than 6,000 as of 2001, had reached a tipping point: more than three-quarters of its inhabitants were no longer working in agriculture. The village was reclassified as a census town in 2011.

From farmers to factory workers

Sakkayanmary is one of the few tenant farmers left in Molachur. She shares the harvest from the small plot at the back of the family’s one-room hut with the owners of the land, who, she suspects, are waiting for the plot to increase in value before selling it. Outside her hut, red chillies were spread on the ground to dry; inside, her eldest daughter Pornima sat embroidering a sari, a work for which demand has dropped since the factories arrived.

“Pornima keeps cursing me that I didn’t let her study like her brother and sister,” Sakkayanmary explained in Tamil. “But we didn’t have money back then and I needed her to work. If she went to school, she’d have had the option of working in a factory.”

Pornima’s younger sister and brother both studied up to class X and now work for the factories, one at mobile phone component maker Foxconn Technology Group and the other with glass manufacturer Saint-Gobain India. Combined, the siblings earn ₹ 7,000 a month.

In Molachur, the factories have created job opportunities for educated villagers, but for the unschooled, the prospects are bleak. Parents prioritize education as a result, keen to make sure their children get a fighting chance for one of the coveted factory jobs—but it’s not easy.

In nearby Irungattukottai, schools only teach until class V and children have to travel to Sriperumbudur, a distance of 6km, to get a high school education. U. Fathima, a housewife and member of a self-help group, has four daughters, one of whom attends high school. Each month, Fathima pays ₹ 1,500 for a private van to drive her daughter there.

Now, with Bharat Forge Ltd and Maharashtra Industrial Development Corporation (MIDC) developing a multi-product special economic zone, and an international airport planned nearby, Chakan has seen large-scale but uneven job creation.

Mahesh Patil runs a contract labour firm and placement agency in Chakan. “Every day we receive applications from 70-100 youths for jobs in the new industries,” he said. “And I can say we manage to provide jobs to a majority of them.”

Some locals feel left out, and clashes have taken place between industry representatives and local businessmen, who want first preference in their supply contracts. Suresh Gaikwad is one of the disillusioned. A native of Chakan, Gaikwad was once a farmer and now works as a building contractor.

“Five acres of land belonging to my family was acquired for the industrial park by MIDC,” Gaikwad said. “But no member of my house found any job in the industry, and all the contracts for supply of hired vehicles, canteen, small spare parts go only to those who are politically connected. The common man like me has not got any benefit of industry coming to the area.”

Services deficit

Ejaz Ghani, an economic adviser for South Asia at the World Bank, has studied the urbanization of India’s manufacturing sector since the 1990s. In a recent report for Harvard Business School, Ghani and his colleagues found that while informal and unorganized small industries (such as Molachur’s embroidery trade) were moving from rural areas into cities, the reverse was true of the formal industrial sector—the Hyundais and the Nokias.

“The main message is that the organized manufacturing firms are moving out from urban areas of districts and into the rural,” said Ghani. “That’s a trend which cuts across industries and states. We also found that new plants tended to open in places that had better infrastructure and better education facilities.”

But, he added, if those facilities are not available, there are other options. “They might as well set up their own power plants or connecting roads,” Ghani said. “Organized firms can do that.”

“Along with industry, social infrastructure such as schooling and housing for workers and white-collar employees needs to be built,” said Sethuraman. “Only then there will be full-fledged development.”

But that will be difficult without the government providing what Ghani describes as a “virtuous circle” in which more and better infrastructure attracts more industry.

For the residents of Irungattukottai, who live within view of the Hyundai factory, the choice is between no services at all and the ones that the private interests are willing to provide.

“Hyundai has built toilets for us and also distributed garbage bins,” said G. Stella, a former school teacher. Although their children watch Sun TV, take computer courses in accounting software, and dream of working in banks or as teachers, the housewives of Irungattukottai make do with small victories when it comes to daily necessities: water now flows in their taps once every two days—compared with once in 10 previously.

At Deveraj’s house, the influence of the factories is more pervasive. On the first floor, his 25-year-old son, who works at the Nokia component supplier Foxconn, has installed two personal computers. He intends to start a computer class for locals, and the estimated additional income of ₹ 1,500 a month will provide a much-needed boost to the household budget.

This is the second in a six-part series on India’s census towns. The third part will focus on the changing spending habits of census towns’ residents—a growing segment of the consumer economy.

Read the third part in the series.