550 Years!

The annual average rate of gross deforestation is a little under 3.5 bn metric tonnes (2005-2009). India is responsible for ~10% of this. USA and China for another 11% and 9% respectively.

Following table: Percent share of countries (top 50%) in gross 3.3 bln mtrc tn deforestation in 2009:

The forest cover has depleted at a much higher rate of over 85,000 Sq Km between 1990-2000. This has moderated to close to 70,000-75,000 Sq Km in recent years. Nevertheless the rate is not innocuous. It is not just deforestation that contributes to green house effect and climate change, the effect is compounded also by the derived wood fuel that is burnt.

At this celerity, the forest land will completely disappear in ~550 years!!

the market solution to slum rehabilitation

I was recently introduced to the concept of market based solutions for slum rehabilitation.

At the fore: slums are not a result of market failure, rather a result of markets. The solution therefore, lies embedded in the working of markets.

The solution is provision of low cost housing to the slum inhabitants, who were too poor to afford extant housing. A prerequisite: inexpensive land. The current demand supply mismatch in the real estate market seems large. Authors suggested accelerated clearance of disputed land, conversion of unused public lands and conversion of agricultural lands at city periphery for urban use.

Following calculations based on cheapest available land around Bombay (Thane district?) at Rs 2,500 /sq ft show ~1,000 acres of residential land needs to be made available (further, land for infrastructure will also need to be made available) to meet demand. There may still be some people who may need titling benefits or subsidies.

Releasing this kind of land should not take much, it is only about 1% of Mumbai’s total land.

• Households with annual income less than Rs 90,000 per annum will be eligible for subsidies.
• Given the magnitude of 'inexpensive' land required, converting agricultural land and developing satellite towns may actually be the best available option.
• Substantial investments would have to be made for provision of infrastructure, particularly transport.

Paper: "Working with the Market: a New Approach to Reducing Urban Slums in India"

the scintillating urban and the static rural

Higher urban wages attract rural poor, leading to migration, unemployment, emergence of squatter settlements etc.

Higher wages or the ‘expected higher wages’ in the urban sector drive the immigrants.

Of course migration cannot be stanched. Two pronged policies:

• Cities should expand to keep pace with immigrant population. Policies to integrate informal into mainstream economy, Govt provision of adequate physical infrastructure.

• Productivity in rural areas can be enhanced (for example through imposition of minimum wages).

In India, rural labour market seems to have settled at a low productivity equilibrium encouraging migration.

Productivity in Agriculture sector has not progressed over past few years: