Skewed priorities hurting city’s economy

In the globalised economy, metropolises are turbocharged engines that are driven by new and powerful forces capable of producing huge wealth, vast iniquities and economic imbalances. To regulate this, economies of metropolises should be planned, structured and nurtured by encompassing the basic principles of diversity and inclusiveness. For this, the planners and decision-makers should have knowledge of the metropolitan economy in all its depth and dimension.

In the case of Chennai it does not appear to be so. The Second Master Plan confesses this: “A comprehensive study of CMA Economy and Employment profile should be taken up to identify the activities and initiatives, both in the formal and informal sectors that can accelerate employment and income generation for the poor and low-income groups.” Thus, there was a vacuum! Perceptions, normally those of external agencies dealing with sectoral interests, fill this kind of vacuum. Chennai seem to have been influenced by the views of National Association of Software and Services Companies (NASSCOM) and Confederation of Indian Industry (CII) – the former representing Information Technology and the latter, large industry and business.

NASSCOM’s assessment was that Chennai had the distinct advantage of Tamil Nadu’s high bandwidth availability. It was also the major corridor to Southern India.

The higher level of literacy and the fine English language pronunciation of the people were drawing huge investment from multinational companies (MNCs).

The comparatively cheaper real estate value in Chennai and availability of ‘large tracts of unutilised land’ was a compelling attraction! According to a study commissioned by CII, “Chennai’s economic boom covered the auto and auto-ancillary industries and is now spreading with the growth of IT/ITeS, banking, retail, healthcare and construction industries.” Chennai’s economy was expected to increase to around $150 billion (Rs 7,50,000 crore) by 2025. “Infrastructure, especially airports, ports, flyovers and real estate, would play a key role, which would bring in a revenue of around $60 billion, followed by IT/IteS $23.16 billion, engineering $15.39 billion, and auto $12.78 billion.” This would lead the growth.

On the other side we had the sobering data of the State Commissionerate of Employment & Training. According to this data, employment of the organised sector in Chennai and Kancheepuram (including Thiruvallur) districts in 2000- 01 was 6,08,762. In 2001-02 when IT joined other activities like manufacturing etc., the figure rose to 6,55,474, an increase of 7.5%. Since then other activities seemed to have been edged out and by 2004-05 the figures declined to 5,91,499, a drop of nearly 10%, which was indeed disturbing.

The ‘IT revolution’ and MNC investments were indeed throwing out diversified employments and was spawning a ‘job-loss growth’, which could cause severe iniquity and socio-economic imbalance in the near future! While the planners recognised the importance of economic growth to realise the main objectives of planning and public policy, such as providing adequate and decent work opportunities, eradicating poverty, reducing disparities and improving the quality of life of people in general, they ironically sought to achieve most of these through the IT-real estate route! Accordingly, the Master Plan gave the ‘Most Favoured Status’ to IT/ITES/BPO industries while paying lip-service to SMEs and making cursory reference to the informal (unorganised) sector. The government went overboard trying to convert Chennai into an IT citadel. IT buildings were allowed within the city in all land use zones except primary residential with 1.5 times more Floor Space Index than other commercial/office buildings.

There are IT corridors, parks, townships and what is baffling, IT Special Economic Zones right in the city! It was virtually a ‘monoculture’ pursuit of one economic activity catering to high-skilled personnel, allocating to it hugely disproportionate resources like prime land and infrastructure investments.

Today, out of 10 million square-feet of office space lying vacant in Chennai, seven million is IT dedicated and two million is IT SEZ. Lots of land earmarked for IT development is lying unbuilt. No information is available on the jobs created during the ‘IT-boom’ since the government has been secretive and consistently refused to publish a ‘white paper’ despite repeated requests. Present strategies cannot meet the projected demand for new jobs - mostly unskilled and semiskilled – in the in CMA: 10.09 lakh in 2011, 16.70 lakh in 2016, 24.47 lakh in 2021 and 33.99 lakh in 2026! In this situation, Tamil Nadu Industrial Development Corporation has recently proclaimed that the “State Government is planning a special IT industry Economic Zone spanning 1,000 sq km (2,50,000 acres) on the outskirts of Chennai.” The CMDA has neither confirmed nor denied this mega-move on the ‘large tracts of unutilised land’ belonging to farmers. Pray, what is the real agenda?

(THE AUTHOR IS A RETIRED IAS OFFICER)