With the rise in transport infrastructure projects, in the name of nation-building, the informal economies continue to bear the brunt of ‘public purpose’ projects.

“Internal displacement is the great tragedy of our time. The internally displaced people are among the most vulnerable of the human family” – Kofi Annan, former UN Secretary General

For decades, India has been experiencing immense pressure on its transport infrastructure to meet the growing demand of its population. The aggressive approach to transport infrastructure development coupled with a lack of sustainable urbanisation policies has resulted in issues such as congestion pollution, overcrowding and accidents while also excluding accessibility for the economically weaker sections, women and disabled people. One of the major consequences of the rather disorderly and haphazard construction of such transport infrastructures, and which is the subject of discussion here, is the displacement of communities, particularly of the informal economies.

The informal economy encompasses a diverse range of economic activities, such as street vendors, day labourers, domestic workers and micro-enterprises, who operate outside the formal regulatory framework. In India, the informal economy plays a crucial role in the country’s economic development. Over 50% of the gross value added (GVA) in the Indian economy is contributed by the informal sector. “India’s informal economy is estimated to be 38.9% which represents approximately $4,183 billion at GDP PPP levels¹” and are projected to add further value to the country’s economy. The dynamic informal economy has also come to define our urban landscape. They bring with them a heterogeneous set of knowledge systems that add a unique socio-cultural value to our ‘place’.

Development-induced displacement of the informal economies is not new in India. Over the last 50 years or so, about 50 million people in India were displaced by development projects. And such statistics are generally underestimated. Physical displacement caused by forced land acquisition severely affects the displaced’s livelihoods and income-generating activities. The government’s resettlement schemes, focusing on cash compensation and replacement housing are typically never sufficient and India also lacks a clear rehabilitation policy to ensure that all dimensions of the affected person are addressed. The displaced often grapple with homelessness, food insecurity and heightened morbidity. Displacement is also a socio-cultural problem as it alters complex social connections that used to sustain a shared ethos.

We will take two examples of development-induced displacement caused by transport infrastructures and at different scales – an international airport in Cochin, Kerala and a street-development project in Chennai, Tamil Nadu.

The Cochin International Airport (CIAL) was the result of a new Private Public Partnership (PPP) model. The airport has been hailed a success story, boosting tourism, businesses, employability and, of course, mobility. But it also accumulated 1254 acres of land (including 65% fertile paddy lands), displacing 872 families who were predominantly from an agrarian background and belonging to the scheduled caste. This saw a seismic shift in the lifestyle of the displaced communities – from an agrarian society to one that is highly capital-dependent. They received sub-par displacement compensations, faced loss of livelihoods, underwent a drastic change in their socio-cultural life and endured the loss of their cultural community spaces.

In the case of the Pondy Bazaar – one of Chennai’s busiest commercial areas, the project started out as a new street development initiative called ‘Pedestrian Plaza Project’. The project gained further momentum when it was incorporated into the Smart Cities Mission (SCM). On one hand, it tried to create a pedestrian friendly street with wider footpaths, designated parking facilities, entertainment pockets and a respite from the obstructed footpaths, haphazard parking and unplanned utilities. In doing so, the project had already relocated the informal street vendors, to a small (and rather dull) building constructed by the government, called the ‘platform shop owners business shopping complex’. The complex was designed to house 629 shops but only around 300 were reported to be functioning, and unsurprisingly so. “When our shop was on the platform, we had running customers who would regularly walk through the main roads. Now after we moved to this building on the second floor, getting new customers is a big question. It has been 8 years now (2021) and there is no improvement”, said a vendor who sells ladies’ tops in the complex. While this manner of relocating street vendors significantly alters their mode of functioning as they are designed to sell on the street, it also seriously affects their livelihood. ‘The cultural aspects and the rights of street vendors have been completely eroded in this process of achieving smart cities’.

The above discussion, along with numerous similar cases across urban India shows why there needs to be a paradigm shift in the way we understand and address informality. A meticulous and rigorous methodology of participation and consultation has to be established, mediating collaboration between state planning agencies and the informal communities as well as other stakeholders.We need to objectively look at avoiding displacement of the informal economy and search for opportunities in creating inclusive environments for them, keeping intact their livelihoods but also their socio-cultural relationships. Incorporating and revitalising the nuances of these existing informal economies, serve to augment economic development but also create a vibrant cultural landscape. We have to plan with informality, not reject it.

– Written by Shawn Kejriwal, Research Fellow

Footnotes:

1. India’s Informal Economy Size | Shadow Economy | 2024 | Economic Data | World Economics. (n.d.). World Economics. Retrieved March 22, 2024, from https://www.worldeconomics.com/Informal-Economy/India.aspx#:~:text=The%20size%20of%20India’s%20informal,easy%20comparison%20with%20other%20countries. ↩︎

Bibliography and Additional Readings:

1. Bose, A. (2015). URBANIZATION INDUCED DISPLACEMENT IN INDIA: CITIES AND ITS PROBLEMS. The Indian Journal of Political Science, 76(3), 357–362. https://www.jstor.org/stable/26534846
2. Mohan.B & George, Filomina.P. Airport Solarisation – CIAL Steals the Thunder. https://www.cial.aero/userfiles/CIAL/CIAL_SCMS.pdf 
3. Prasad, D., Alizadeh, T., & Dowling, R. (2023). Smart city planning and the challenges of informality in India. Dialogues in Human Geography, 0(0). https://doi.org/10.1177/20438206231156655
4. Roy, A. (2009). STRANGELY FAMILIAR: PLANNING AND THE WORLDS OF INSURGENCE AND INFORMALITY. Planning Theory, 8(1), 7–11. http://www.jstor.org/stable/26165882
5. Roy, A. (2009). Why India Cannot Plan Its Cities: Informality, Insurgence and the Idiom of Urbanization. Planning Theory, 1, 76–87. https://doi.org/10.1177/1473095208099299
6. Song, L. K. (2016). Planning with urban informality: a case for inclusion, co-production and reiteration. International Development Planning Review, 4, 359–381. https://doi.org/10.3828/idpr.2016.21 
7. T.V., A., & Patil, R. (2015). DEVELOPMENT AND DISPLACEMENT IN KERALA: AN EXPERIENCE OF COCHIN INTERNATIONAL AIRPORT LIMITED (CIAL). European Scientific Journal, ESJ, 11(10). https://eujournal.org/index.php/esj/article/view/5714 
8. Vanclay, F. (2017). Project-induced displacement and resettlement: from impoverishment risks to an opportunity for development? Impact Assessment and Project Appraisal, 1, 3-21. https://doi.org/10.1080/14615517.2017.1278671
9. Varkey, Biju & G.Raghuram (2012). Governance issues in Airport Development: Learning from Cochin International Airport Ltd. India Infrastructure Report 2002, 303-311. https://www.cial.aero/userfiles/CIAL/CIAL-IIMA.pdf
10. “Chennai’s Pondy Bazaar Pedestrian” (2021, January). C40 Cities Plaza, https://www.c40.org/case-studies/chennai-s-pondy-bazaar-pedestrian-plaza/
11. Dhanasekaran, Tanuja (2021, 8 August). “Tales from Theagaraya Nagar”,  https://storymaps.arcgis.com/stories/74e37db7cfec445aa226d0b1e6f2c72c
12. Navya, K.V. (2021, 20 October). “Dedicated footpath? Yes. Useful? Not really”, The New Indian Express, https://www.newindianexpress.com/cities/chennai/2021/Oct/20/dedicated-footpath-yes-useful-not-really-2373448.html 
13. Omjasvin, M.D. (2023, 12 January). “A sham called pedestrian plaza”, Times of India, https://timesofindia.indiatimes.com/city/chennai/a-sham-called-pedestrian-plaza-in-tamil-nadu/articleshow/96924276.cms
14. Vishwanathan, Nirupama (2019, 14 Novemeber). “T Nagar Pedestrian Plaza project delights walkers but leaves shopkeepers sour”, Times of India, https://www.newindianexpress.com/cities/chennai/2019/Nov/14/t-nagar-pedestrian-plaza-project-delights-walkers-but-leaves-shopkeepers-sour-2061455.html