A battered Mumbai is trying to regain its mojo
9 min read 02 Jun 2020, 03:02 PM ISTWhen the city that never sleeps finally reopens, it will have to deal with a structural shift in its economyLabour shortages will be par for the course. The exodus of migrants could shift the balance between capital and labour in the city, at least for a while
PremiumMUMBAI : Terminal 1 of Mumbai’s Chhatrapati Shivaji Maharaj International Airport connects to the nearest rail head of Vile Parle, on the city’s western railway line, through Nehru Road. Along its 1.5km stretch are located three- and four-star hotels, some large commercial complexes, a number of residential societies, nearly a dozen restaurants, an equal number of bank branches, and a smorgasbord of shops.
On its pavements, Nehru Road has carefully laid-out complex arrangements of small businesses and make-shift shops that support daily living—duplicate key-making, shoe repair, small hardware, exotic vegetables, and Mumbai’s trademark snack vada pav.
All of these informal establishments and most of the formal ones have been shut for over two months now. The ever-congested Nehru Road looks spacious but their disappearance is emblematic of how Mumbai’s economy has ground to a halt during iterations of lockdown announced on 24 March to curb spread of covid-19.
There are hundreds of such streets across the city, all cradling hyper-local economies. These, along with gargantuan wholesale markets of various goods in south Mumbai and agricultural produce market, high-rises in new business districts and Mumbai’s local trains, were shut down swiftly with an executive fiat and police pressure.
Two months later, reopening them and resurrecting their rhythm while grappling with covid-19—and with a cyclone around the corner—presents a stiff challenge both to the Uddhav Thackeray government and Mumbai’s nearly 20 million residents. It could take months for the city—and its economy—to regain its mojo.
When it reopens, there will most likely be a structural and fundamental shift in the city’s economy, its intricate webs of socio-economic networks, its look and feel; there will have to be rethink on living, working and travelling in the second-most dense city of the world.
“We are in uncharted territory here and we will have to feel our way out of it," said Ajit Ranade, an economist. “Some sectors will be badly hit, others less so. What’s clear is that the value chains, supply chains, have been badly disrupted. Things we took as a given in Mumbai will not be same."
Parallel to the urban economy is urban design which, too, will see changes. “To say Mumbai has been badly hit is an understatement but this pandemic gives us an opportunity to rebuild Mumbai to address social equity and sustainable development—a different and better Mumbai," said P.K. Das, urban planner and architect.
The two themes—revving up a locked economy and rebuilding the city—form large parts of conversations about reopening Mumbai.
Economic contraction
The city and the larger Mumbai Metropolitan Region contribute 6-7% of India’s GDP a year. Once the nation’s textile and manufacturing hub, Mumbai’s economy spans various sectors —finance, gems and jewellery, construction, food and fashion, entertainment, small and medium scale manufacturing, boutique units in slums, and a host of services.
Nearly half or 21 of India’s 54 top companies are headquartered in Mumbai, according to a JP Morgan Chase report. The services sector, studies show, constitutes more than 75% of the economy. Mumbai also receives more than two million tourists a year. Most of this was paused mid-March.
The informal economy of the streets and cubbyhole outlets is devastated. A few large essential goods factories have been functioning, barely so. Nearly 90% of small businesses in Dharavi have suffered, said a representative association spokesperson. Given that many services are like perishables—restaurant visit and home spa service cannot be postponed like buying a vehicle—businesses are writing off one quarter, some like hospitality and tourism, two quarters.
“The high numbers of covid cases were unavoidable given Mumbai’s high densities, but lockdowns have ruptured the economy. It’s not a switch that can just be turned back on," said Shankar Sharma, vice-chairperson of First Global Securities. “We are far away from recovery of any kind. Don’t go by the stock market, it’s a flawed indicator."
Reliable data of losses in the large and critical unorganized informal sector is difficult to come by. This sector includes daily-wage workers, construction labourers, loaders and drivers at ports and truck terminals, also self-employed vendors, street hawkers, two or three-person staffed tiny operations, domestic help, even rag pickers. “Putting the economy back on rails means getting all these people and businesses back on their feet," said Neeraj Hatekar, director, department of economics, University of Mumbai.
The labour crisis
From mid-March when covid-19 began its silent assault, the exodus began. Economists and social activists estimate from one million to nearly four million workers have left the city. “Volunteers tell me that some slums in the suburbs are half empty, some have 10-20% fewer families," Das said.
Mumbai suddenly woke up to the existence of migrant workers. With its harsh environment, there is apprehension that many may not return. Labour shortages will be par for the course, said everyone Mint spoke to. The exodus could shift the balance between capital and labour, at least for a while. “There will be realignment between capital and labour, even the contract labour framework is up for discussion," said Sharma. “Businesses were capital-starved for a while, now they have neither capital nor labour."
Owners of manufacturing units in Dharavi echo this. “I’ll have to pay more to get labour back, till then I can’t get work done," said Mohammed Zahid, a leather unit owner. House-keeping firms which service Mumbai’s high-rise towers, small courier companies, gyms and beauty parlours, delivery firms for multinationals to app-based service providers may open for business when the government allows them to but may not have their staff.
There could be moderate increases in wage rates and better conditions which workers will welcome. “Migrant workers (for lack of a better term) will now look for reasonable assurances on their livelihoods and living conditions to come back," said Ranade.
Across industries, from media and entertainment to manufacturing and retail, the covid-19 months have seen pay cuts and lay-offs. This has already begun affecting home rentals, consumer spends, loan uptakes which will have a cascading effect on the economy. Companies tightening their belts would want to save on Mumbai’s high commercial rentals too. Construction projects are being shelved or downsized. The real estate—a large part of Mumbai’s economic chain—is distressed and should see changes.
The sectors largely unaffected are finance, insurance, lending-borrowing, and software where digital connectivity ensured work-from-home during lockdown. “In some cases, productivity even went up but those at the heart of Mumbai’s economy like real estate, food-shopping-entertainment are hurt badly," said Sucheta Dalal, editor of Moneylife magazine. Unlike them, most informal sector jobs are not of the work-from-home category.
Dalal believes that the big whammy will be tackling covid-19 uptick with Mumbai’s over-stressed health infrastructure, especially during the monsoon. The covid-19 crisis has exposed the utter inadequacy of Mumbai’s public health infrastructure and the reluctance of its better-equipped private system to step in. The system is creaking under the load of nearly 42,000 cases—and counting. Rebuilding Mumbai would have to begin with ramping up its health infrastructure rather than a fancy coastal road that serves less than 10% Mumbaikars.
Mumbai of 2020 is somewhat similar to that of 1896-97 during the outbreak of bubonic plague and later in 1918 during the Spanish flu. Those epidemics gave Mumbai its sewage network, Bombay Improvement Trust and Bombay Development Directorate which focused on planned development and public housing. The last two decades saw a booming economy, but haphazard growth and poor quality of life for a majority of Mumbaikars.
Supriya Sule, Lok Sabha MP, sees opportunities instead of challenges to change, beginning with “the cleanliness drive and getting citizens’ involved" while former MP Milind Deora believes that there will be new protocols for work and travel. “The state government must speak to people to find out what they need to resume economic activities, and put protocols in place. I don’t see it happening enough," he said.
The road map
When economic activity resumes full throttle, safe commuting will be Mumbai’s biggest challenge. It cannot be the way it was till mid-March—densely-packed buses and trains, crowding at entry-exit points, peoples’ noses and mouths within inches of one another’s. Urban planners suggest companies start bus services for employees and stagger office timings to reduce, even if marginally, the crush-load on public transport.
Besides, new protocols for commuting will have to be devised like checking commuters on railway platforms and bus stops, regulating the numbers allowed into trains and buses, and so on. The staggering numbers—suburban rail network carries 7.5 million people and BEST bus service about 3.5 million a day—leave little elbow room for new ways of commuting.
“Other cities may have grappled with this but their solutions won’t work for Mumbai," said Pankaj Joshi, architect and executive director, Urban Design Research Institute. “Stockholm is smaller than the suburb of Andheri. New York’s built up area per person is 1,500 sq. ft, Mumbai’s is 30 sq. ft. So we have to devise our own strategies to travel and work in covid-19 times."
The necessary condition now, according to Deora and Hatekar, is for Mumbaikars and their government to change their mind-set from fear to cautious reopening without which recovery will be difficult. New protocols and norms like physical distancing could increase demand of space and may well mean a rise in the cost of property which, in turn, could mean rising prices of goods and services, explained Hatekar. “But we have to start somewhere," he said.
The key condition, according to Rajesh Jain, founder and managing director of Netcore, is for the 24x7 coverage of covid-19 in the media to be tapered off. “This will immediately reduce fear," he said, “Then the government should upgrade health infrastructure so that people are assured of care if infected, and then introduce reforms to restart the economy."
Among the reforms Jain prescribes are “Dhan Wapsi" or raising resources from public lands, creation of Special Economic Zones, and a mayor answerable to Mumbaikars. “There is big economic devastation. We will have to rebuild the economy and learn to live with the virus. It isn’t going to say goodbye to us at 5am on July 1st," Jain added.
Rebooting the economy without re-imagining the city would be an opportunity lost, say urban planners. This includes, for example, reviewing the true value of space. Mumbai’s shops, bakeries, restaurants and manufacturing galas double up as living/sleeping spaces for workers with inadequate and inhospitable living conditions, pushing them into low quality of life. Joshi feels these standards should be improved now.
This idea of social equity, making the city for all its citizens, is important, said P.K. Das. He wants this layered with the principle of ecological sustainability. The impact of climate change and rising sea levels threaten large parts of Mumbai. There is reason to believe, Das said, that 15-18% of Mumbai will be submerged in 70-80 years. “Rebuilding the city and its economy now cannot ignore this danger sign ahead," he added.
Experts call for a panel or study group that could chart Mumbai’s recovery plans that make all those who contribute to Mumbai’s economy feel at home in the city. People like Ram Narayan Singh, vegetable vendor near Nehru Road who hails from UP, and super-energetic Sachin at Parleshwar Vada Pav Centre who migrated from a village in Konkan, want to resume work. “It’s our present and our future," said Singh. They also want a kinder Mumbai.
Smruti Koppikar is a Mumbai-based journalist and urban chronicler.
