GO
Loading...

The American invention India really craves: Exurbs

Lavasa, a manufactured resort city in India, south of Mumbai a few hours by road. Lavasa was built by the Hindustan Construction Company. View of the homes along Portofino Street. This is a park at one end of the stretch of buildings.
Spencer Wynne | Toronto Star | Getty Images
Lavasa, a manufactured resort city in India, south of Mumbai a few hours by road. Lavasa was built by the Hindustan Construction Company. View of the homes along Portofino Street. This is a park at one end of the stretch of buildings.

The images are bright and hopeful: Smiling citizens walking past elegant buildings on the shores of pristine lakes, balanced employment, free trade zones, respect for the environment. The congestion, inadequate municipal services, and rich-poor divide characterized by slums next to gleaming hotels have all been left behind.

These are India's new planned cities, and while they have been started in the last decade, their founders already see them as the answer to regional economic development and, more broadly, to the pains of the subcontinent's urbanization.

Unlike the cities newly built in the era before India's 1991 economic liberalization, these entities are funded either partly or entirely by private money. Lavasa, a planned "hill city" three hours from Mumbai and one hour from Pune, is being developed by Hindustan Construction.

(Read more: In drought era, firms may be up the creek)

Meanwhile, Mahindra World Cities (part of the Mahindra Group, an automotive multinational) consists of two exurban centers located 30 minutes to an hour from Jaipur and Chennai; a third outside Ahmedabad is being planned. The World Cities are conceived as special economic zones focused on production and job creation.

There is also Naya Raipur, the capital built by the government of Chhattisgarh state, which proposes to revitalize the existing city of Raipur with new public spaces and high-tech ventures.

To backers, these cities present a more sustainable urban model that will supply newcomers with skilled jobs and enhance opportunities for businesses. To critics, the rise of India's "exurbs" is just another way for the upper and middle classes to isolate themselves without solving the country's problems. It's a transition to a better quality of life for the few.

Promotional materials for the planned cities are buoyant. They advertise renewable resources and pitch an ecofriendly profile, aspiring to blend into their local environments.

(Read more: How ugly, polluting buses can drive future cities)

"The main purpose… is to create new urban centers that complement/decongest our existing cities by providing a well-planned ecosystem with modern infrastructure and connectivity," a Mahindra spokesperson said.

Hindustan claims that Lavasa will "redefine the notion of the city as we know it" with a mix of businesses and upscale residences. In accordance with the principles of new urbanism, the company envisions residents' living within walking distance of both work and recreation, including outdoor cafés and sports facilities.

Most of the planned cities aim to give residents the infrastructure missing in large Indian municipalities—a purpose that's bound to appeal to the growing Indian middle class, which in 2010 was estimated at 70 million people, or 10 percent of the nation's population.

While India is still predominantly rural, the number of people living in its cities is projected to rise to almost 600 million by 2030, according to the McKinsey Global Institute. Its government must focus on building inclusive cities that provide at least basic services, but India invests only a 10th of what China invests in urban infrastructure. Fewer than two-thirds of India's city dwellers have individual water connections. Notoriously, 60 percent of Mumbai's residents, many of them migrants who have come to benefit from it growing economy, live in slums.

(Read more: Colombia: Urban past, rural future?)

It's too early to judge the planned cities' claim that they will benefit all socioeconomic groups, but India can cite at least one example of a successful privately planned city, and it has a long history, in fact, a history that dates to well before the rise of the U.S. exurbs and gated communities.

Jamshedpur, built on the design of tycoon Jamsetji Tata in the state of Jharkhand, has for 100 years been a bustling center of the steel industry while maintaining reasonably high environmental standards.

Yet the challenge of attracting the diversified range of residents and workers needed to maintain a full-fledged city, rather than primarily a company town, is greater. India's dream cities focus on innovation when proposing ideas for future business: The "Making of Lavasa" video confidently states that the city will welcome "research and training centers, IT-related businesses and film facilities."

India’s Planned Cities: A Closer Look

City name
Location
Date launched
Size
Type
Population target
Lavasa
Maharashtra
2004
25,000 acres
(currently 10,000 acres)
Private
300,000 plus
2,000,000-3,000,000
tourists a year
Mahindra World City, Jaipur
Rajasthan
2008
3,000 acres
Public-Private Partnership
25000
Mahindra World City, Chennai
Tamil Nadu
2007
1,500 acres
Public-Private Partnership
10,000-15,000
New Raipur
Chattisgarh
2012
3,230 acres
State-led
560000
Dholera SIR
(land by Mahindra World City)
Gujarat
Not yet
136,000 acres
State-led with private or PPP
2000000
Source: Katherine Foshko Tsan

Mahindra says its work has been a boon to industrial activity in Jaipur, bringing in companies such as Infosys, Deutsche Bank, MetLife and Genpak. Their activity is said to account for close to 30 percent of information technology exports of Rajasthan, one of the most underdeveloped states in India—a meaningful result given the mere five years Mahindra World City Jaipur has been operational.

Mahindra hopes to attract international investments from sovereign funds, with foreign direct investment channeled to the cities, and has set its direct employment targets at 75,000 to 80,000 for Chennai (population 4.5 million) and 120,000 to 125,000 for Jaipur (population 3 million).

Despite the promise, Aditya Barve, a native of Pune who is now at MIT's Urban Risk Lab, does not see privately backed cities as a viable solution to the problems of urbanization, because of their lack of jobs compared with nearby municipalities. Instead, these are "bubble projects that represent an alternative reality, like 'The Truman Show.' " In other words, these centers are not in touch with the needs of their constituencies—the poor who make up most of new urbanites.

Mahindra acknowledges that its target resident is a white-collar employee of a company in one of its cities. To help poorer, blue-collar workers, the company has launched a program to provide work to locals, 50 women's groups and a youth professional education center, which has had 900 students.

(Read more: Brazil's City Protests Are the Next Global Oil Crisis)

Whether suitable housing will be built for different classes of people remains an open question.

Almost a third of Navi Mumbai, Mumbai's satellite township planned by the state government in the 1970s, has turned into slums as the city grows and construction does not keep pace.

Improving the governance of existing cities, rather than building new ones, would help India, experts say.

Arish Dastur, who served as team leader of the World Bank's Eco2 Cities program, sees such cities as primarily real estate ventures that "do not address the urgent and fundamental requirements for inclusive and meaningful urbanization." Scaling up and appropriately adapting successful policies, such as Gujarat's government-facilitated Town Schemes, would be more effective, he said.

The new planned cities are being taken seriously. Though they may never be all-inclusive, what they develop into may be lived in by between some 70 million and 600 million people.

—By Katherine Foshko Tsan

Latest Special Reports

  • Financial advisors stress that now is the time for investors to get serious about year-end financial planning checkup.

  • In a world of big box retail and e-commerce, successful business owners are taking new paths to Main Street success.

  • File photo: Participants at a hacking conference in Germany

    A series of high profile cyber attacks has created huge economic opportunity as businesses look to fend off future attacks.

Retail

U.S. News

Technology

Energy