International Policy Workshop on Rural-Urban Poverty Linkages

2-4 September, 2014, Hanzhou, Zheijiang, PRC

Diversity, informality and opportunities for the poor in villages in

Asian megacities: examples from Delhi and Mumbai
Banashree Banerjee

Table of Contents

Abstract..................................................................................................................... 1
1.Background and introduction .............................................................................. 2
2.Urban villages in Delhi .......................................................................................... 3
2.1 Growth and development in spite of policy paralysis......................................... 3
2.2 Land settings lead to informality and diversity ................................................... 5
2.3 Rental housing for the poor and informal economies are linked ....................... 7
2.4 Social and environmental costs of low cost ....................................................... 8
3.Urban villages in navi Mumbai ............................................................................. 8
3.1 City building starts with rehabilitation of existing villages .................................. 9
3.2 Negotiating a better deal ................................................................................. 10
3.3 Living off the land ............................................................................................ 11
3.4 Informality, diversity and the poor ................................................................... 13
4. Lessons from Delhi and Navi Mumbai .............................................................. 13
References ............................................................................................................... 14
Abstract
The development and expansion of cities in many parts of Asia follow a characteristic pattern
of engulfing traditional farming and fishing villages. These villages, once they become part of
the urban area, are known by the self-contradictory term of ‘urban villages’. The focus of this
paper is on urban villages that have had their surrounding farm lands expropriated by the
government to create public land reserves for planned city development in the Indian
megacities of Delhi and Mumbai.
Once villages are within the city, traditional village life intermixes with both formal and
informal urban development in a variety of ways. This paper examines how investment and
change of economic activity transform farming and fishing villages into multi-functional urban
territorial enclaves. These remain distinct and different from the surrounding city not only
because of the superimposition of urban uses on the original village morphology, but also
because of the freedom to build provided by secure tenure and lax development controls.
Unlike urban villages in Chinese cities, many of the villages in Delhi and Mumbai have
informal industries, warehouses, workshops, shops and coaching centres mixed with
residential use. They also display a unique self-supporting and incremental approach to
property development that functions outside the formal system but has strong linkages with
it.
There is a case for letting the incremental land development process flourish, as its flexibility,
entrepreneurial spirit and local flavour can never be captured by the homogenised process of
‘modern’ city planning and development. It actually constitutes an efficient market
mechanism for delivery of housing and jobs to the in poor. No policy is talking about
supporting this strong and vibrant urban village based informal economy, which is based on
using land as a resource to generate prosperity for villagers and provide migrants a foothold
in the urban economy.
The question is, are there better alternatives? Can urban villages continue to hold this
function, without their downsides? Can the city planning and development process
accommodate such incremental development and also ensure that thresholds of health,
safety and pollution are not crossed? Neglected by city planners so far, is the urban village
the new frontier of urban planning in Asian mega cities?

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1. Background and introduction
The development and expansion of cities in many parts of Asia follow a characteristic pattern
of engulfing traditional farming and fishing villages. These villages, once they become part of
the urban area, are known by the self-contradictory term of ‘urban villages’ or ‘villages in
cities’. Urban villages can originate in three distinct and different ways. First, villages legally
become urban when city or municipal limits are extended (Adusmilli, 2004), a practice widely
followed throughout Asia. Second, expanding cities interface with rural areas in a peri-urban
mosaic of urban and agriculture uses, typically in South and South-East Asian megacities
such as Jakarta, Bangkok, Colombo, Dhaka and Kuala Lumpur as what has been called
‘desa-kotta’ regions (McGee, 1991). Third, rural land is expropriated or purchased for
planned urban development but the village habitation is not taken over and gets engulfed by
the city, which is planned and developed around it on its agriculture lands.
This paper is concerned with this third kind of urban village, on which a fair amount of recent
literature has been generated. However most of this literature is in the context of rapidly
developing Chinese megacities such as Beijing, Shenzhen and Guangzhou, where villages
in cities have emerged as a significant source of cheap rental housing for large numbers of
rural migrants (Chung, 2013; Gransow, 2010; Zhenj, 2008; Guo, 2006). Even though not
written about as much, a similar pattern can be found in Indian cities such as Delhi, Mumbai,
Bhopal, Hyderabad and Bangalore. A typical urban village in such cities is associated with
squalor, narrow dirty streets, overcrowded dwellings and sweatshops - characteristics which
often lead to their being called slums. On the other hand, some of these villages are being
celebrated as places with a unique historic character and attracting high end residences, art
studios, boutiques and restaurants.
The focus of this paper is on urban villages that have had their surrounding farm lands
expropriated by the government to create public land reserves for planned city development
in the Indian megacities of Delhi and Mumbai. Such villages are scattered all over Delhi. In
Mumbai they are concentrated in Navi Mumbai, the new satellite city, which has been looked
at in detail. Both in Delhi and Navi Mumbai village habitations have been progressively
included in the city as specially demarcated areas.
Once villages are within the city, traditional village life intermixes with both formal and
informal urban development in a variety of ways. This paper examines how investment and
change of economic activity transform farming and fishing villages into multi-functional urban
territorial enclaves. These remain distinct and different from the surrounding city not only
because of the superimposition of urban uses on the original village morphology, but also
because of the freedom to build provided by secure tenure and lower levels of development
control. Unlike urban villages in Chinese cities, many of the villages in Delhi and Mumbai
have informal industries, warehouses, workshops, shops and coaching centres mixed with
residential use. They also display a unique self-supporting and incremental approach to
property development that functions outside the formal system but has strong linkages with
it.
The main purpose of this paper is to explore how these urban village settings in Delhi and
Navi Mumbai provide housing and livelihood opportunities to the poor. The benefits of these
opportunities as well as their environmental and socio-economic costs are considered.

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2. Urban villages in Delhi
About 6.82% of Delhi’s 2011 population of 17 million lives in 135 urban villages scattered
throughout the city. There are another 227 peri-urban villages, which are still considered
rural even though many of them show urban characteristics (Govt.of India, 2007).
Figure 1: Location of urban villages in Delhi

Source: Delhi Development Authority, 2011

2.1 Growth and development in spite of policy paralysis

The history of urban villages in Delhi goes back to the early part of the 20th century when
agricultural lands and village lands were acquired and villagers relocated outside the city to
build the colonial capital of New Delhi. In 1931 the policy changed to acquiring only
farmlands while the village habitations were allowed to remain and demarcated with a red
line (Lal Dora) on the land revenue map. 25 villages were engulfed by the city in 1931 and
this number increased to 47 in 1951 (Chattopadhay, 2014).
Urban Delhi grew rapidly around the villages, starting with independence and partition of
country in 1947 and building of the new national capital. Land was acquired by government
for refugee rehabilitation, government employees’ housing and other urban uses, but the
response was not fast enough for the huge influx of refugees and migrants. Squatter
settlements came up on unused public land and illegal ‘colonizers’ started subdividing and
selling land notified for acquisition as well as village common lands (Ahmad, 2011). The
villages also started densifying with the opportunity to construct cheap rental housing, a new
source of income. By 1961 more than 25% of Delhi’s population lived in underserved areas
represented by squatter settlements, unauthorised colonies, villages and the old city (DDA,
1962). This has now grown to 46% (DDA, 2007).

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1959 onwards the urbanizable area of the city, as proposed in the Master Plan (1961-81),
was expropriated in stages to create a land bank for planned development under the policy
of Large Scale Acquisition, Development and Disposal of Land, progressively engulfing
village habitations within the growing city and causing loss of livelihoods with the loss of
farming and grazing lands. The compensation package for land expropriation initially
consisted of a financial award, a residential plot and offer of government employment to one
family member (Govt.of India, 2007) but later dwindled to only the financial compensation.
Those who did not own land but depended on agriculture for their livelihood, received no
compensation and got absorbed in the vast force of unskilled workers in the city building
process.
According to the provisions of the Municipal Corporation of Delhi (MCD) Act of 1957 all
villages within the Master Plan area are to be declared as ‘urban villages’ by notification by
the state government. Currently there are 135 notified urban villages and 15 more awaiting
notification. After notification the village is urbanised through a three step process. First, the
Lal Dora ceases to exist and villages become part of the municipal ward in which they are
located. Secondly, the regulatory framework of urban planning consisting of zoning
regulations, area development norms and building byelaws comes into force. Finally, a
village development plan is prepared for “rationalising land use” and providing services and
amenities (Govt.of India, 2007).
In practice no urban village in Delhi has gone through the entire urbanisation process, even
though notification started in the 1970’s. These villages still continue to be circumscribed by
the Lal Dora, without any signs of integration with the city. Delhi has had 3 Master Plans,
spanning a period from 1961 to 2021. Each of them has recognised the unique character of
urban villages and the importance of integrating them with the rest of the city (DDA, 1962,
2007) but this has not been supported by action. Even when some village development
plans and schemes were prepared for providing schools, health centres, open spaces and
heritage conservation, no action was taken as no institution was given the responsibility to
implement them (Govt.of India, 2007). The Delhi Urban Arts Commission commissioned the
preparation of renewal plans of three urban villages which are significant from the heritage
point of view but these are yet to be implemented (Delhi Urban Art Commission, 2014).
Overall, urban villages have been neglected by urban institutions, which have a stronger
mandate for planning and developing new areas.
Meanwhile urban villages continued to develop rapidly with housing, factories, warehouses
and workshops, providing space at rates much lower than the surrounding city. Although
according to the MCD Act, no buildings except residential houses of up to 2.5 stories
(revised to 15 meters height in 2009), can be constructed without permission, no permission
is sought. In fact building permission cannot be given because villagers are not able to
provide evidence of land ownership. All land within the Lal Dora is held only by way of
possession with no record of ownership by name in the cadastre, which records only the
collective area of the village (Govt.of India, 2007). Thus all building activity takes place
unauthorisedly but with sufficient immunity, especially because starting with the order issued
by the Ministry of Urban Development in 1977 to regularise unauthorised colonies, including
unauthorised colonies and residential and commercial structures located within Lal Dora
areas, there have been a spate of such orders, especially before elections.
The upgrading of urban and rural villages with basic minimum municipal services, health
centres, schools and health centres began in the 1950’s. In 1983 the central government
approved a scheme for improvement of services in urban and rural villages with grants from
the central government and ‘village cess’ on residential plots leased by DDA. A Mini Master

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Plan was formulated as part of this scheme in 1985 (DDA, 1985) and revised in 1991 for
physical and financial planning of essential services. The upgrading activity has continued
with individual connections for water and electricity, underground sewerage, paved streets
and street lights. Power connections for commercial activities and small scale non-polluting
industry are also given. These services have brought about significant improvements, even
though they are not at par with services in the city and narrow winding streets still remain.
Public investment in services has boosted building activity turning villages into high density
mixed use zones responding to market demand for locating housing, industry, workshops
and shops in prime areas at lower costs. Some of these activities would not be allowed to
come up or would not thrive in the planned city. This increase in population and
diversification of use soon makes the services inadequate and increasingly difficult to
upgrade.
Over the years a number of working groups and committees have been set up to look into
the problems of urban villages. The most notable among these was the Expert Committee
for Lal Dora and Extended Lal Dora in Delhi set up in 2007(Govt.of India, 2007). This
committee prepared a well-informed report and recommended a strategy which would look
into livelihood options and encourage self-financing and selective redevelopment of
decaying and dilapidated buildings and areas by villagers themselves, and better utilisation
of village land by land owners entering into partnership with the private sector for
redevelopment. The latest policy of 2013 too considers urban villages as areas appropriate
for redevelopment where incentives are proposed to be given to private developers to take
up land pooling schemes (DDA, 2013).

2.2 Land settings lead to informality and diversity

Empirical evidence1 from urban villages points to a unique system of investment in and
income from land through an incremental process of land development without selling the
land. Even though land owners have possession rights, the building process is informal but
safe. It takes advantage of the policy contradictions of restricting building activity on one
hand and on the other, regularising it retrospectively and making public investments in
infrastructure. Unfettered by the need to observe regulations, the process responds to the
demand for lower costs in well placed locations, whether for housing or for commerce and
production. The village environment of narrow streets, large plots and lower level of services
along with informal building keeps rents lower than surrounding areas, with equal locational
advantages. Land owners then can be flexible in responding to market demand in diverse,
though informal ways.
The need to maximise incomes with the least possible investment has led to three distinct
streams of development. One is the construction of cheap rental rooms with shared water
points and toilets for the vast numbers of migrants flowing into the city. The other is renting
or leasing plots or sheds for warehouses and industries such as garment manufacture,
recycling and steel works. Both these streams thrive and survive because of the availability
of basic urban infrastructure as well as the freedom to respond to market demand unfettered
by the regulatory framework of urban planning and control. Depending on location-specific
demand, the surplus income from property is ploughed back into more of the same or higher
order development such as rental apartments and factory sheds and halls for offices,
coaching classes and garment manufacture.
The third stream consists of transferring land to developers through a quasi-legal process
since plots within Lal Dora cannot be legally transferred or entering into an agreement with a

1 This draws from the author’s ongoing research on land development in urban villages in Delhi.

5
property developer for sharing benefits in exchange for the right to develop the property.
Substantial portion of payments in such transactions remain unaccounted for (Government
of India, 2007). In the past such land was almost exclusively used for illegal subdivisions or
unauthorised colonies but the current practice is to construct apartment blocks or
commercial complexes for sale or lease. Related to this is the development of the extended
Lal Dora lands. In 70 of the villages the boundary of village habitation was extended in the
1950’s and 60’s to include common lands around the village. This was expected to be used
for schools, health centres and other facilities for the village and low cost housing. After
years of popular demand urban village boundaries were extended in 2013 wherever vacant
land was available. Unlike in the Lal Dora, land in the extended Lal Dora consists of freehold
residential land which can be legally transacted. In the last two years intense construction
activity has gone on in these areas, mostly with the construction of apartment blocks by
developers, with no requirement for building permission for buildings up to 15 meters height.
These methods of property development have enabled villagers to use their properties for
income generation, starting with low or no investment. Even those with low financial means
can participate in the process. For many families income from property is the only means of
livelihood. While this provides economic security, it has also led to a situation where many of
the younger generation do not feel compelled to work for a living. This is fast turning into a
social problem (Choudhary, 2014).
Figure 2: Determinants of diversity and informality
sq

As can be expected all villages do not evolve in a similar manner. There are significant
differences in land use and built form in response to market opportunities, but over the years
some broad typologies have emerged. Urban villages in West and North Delhi have a
predominant mix of industries2 and rental housing for industrial labour. They form part of the
large agglomerations of small and medium industries that spread across industrial estates,

2Industries include plastic recycling and e-waste units, dying, agro-based factories, PVC and rubber
based products, iron foundries, auto parts, hardware, electric wires and cables, textile dying,
manufacture of paints, soap, chemicals and construction material (Bentinck, 2001; Toxics Link, 2013)

6
unauthorised colonies and villages. Residents of surrounding squatter settlements provide
lower end services such as domestic and industrial waste recycling. The Badli area has
about 15,000 industries, at least 25% of these are in urban villages. East Delhi has villages
with different predominant functions such as rental housing for informal and formal service
sector workers, dairies and agro-based industries, warehouses and godowns, dying, and e-
waste recycling. South Delhi urban villages and unauthorised colonies are the hubs for the
export garment industry, which is almost exclusively based in these areas. Villages
surrounding major educational institutes have students’ housing and coaching centres for
competitive examinations. Rental housing is more diversified, including informal service
sector and garment industry workers, nurses, single men and women working in business
processing organisations (BPO’s) and Indian and foreign students. This city zone also has
villages which are gentrifying with high-end designer show rooms, restaurants and art
galleries.
Commercial development along the periphery and main street are common across all urban
villages, some catering to the village itself and others to a larger area. These vibrant
shopping streets are preferred over shopping malls and department stores by most middle
and lower class urban residents, hence their growth and continuance.
Apart from agglomeration economics and local demand, the metro rail has become a major
stimulant for intensification and diversification of use in urban villages. Peripheries of villages
close to metro stations are becoming commercial hubs and middle class residential areas.
Inner areas too are getting redeveloped with additional stories.

2.3 Rental housing for the poor and informal economies are linked
A large number of migrant workers, both single and with families, use rental housing in urban
villages either as a launch-pad in the city or as a permanent housing solution. Anything
between 30% and 70% of urban village residents are renters occupy rental housing that is
far below prescribed norms and standards of health and structural safety, but affordable and
conveniently located for poor migrants. For tenants it also provides a measure of security
which is absent in squatter settlements. Renters tend to cluster in homogenous groups
based on religion, caste or place of origin, allowing creation of social capital and sharing of
services, essential for survival in a big city. Property brokers and kinship groups enable new
renters to find their own social group. For land owners rental housing brings high returns on
low investment.
What is more significant is that the perpetuation of this kind of housing is closely related to
the demand for cheap labour in the informal economy of warehouses, factories, workshops,
shops and markets that develops within the urban village in the absence of land use
restrictions (Bentinck, 2001). A large number of urban village residents, especially women
and children, are engaged in home-based economic activities such as piece rate garment
stitching; traditional crafts such as embroidery; making small metal parts, paper bags and
home decoration items; making and packaging food items to supply to retail and wholesale
outlets or sell themselves. Thus the two property development streams reinforce the locally
self-contained informal economy with close work-home relationships. In time private service
providers come in with dispensaries, schools and day care centres to serve migrants who
have yet to get entitlements to government facilities.
That is not to say that the urban village is a totally self-contained entity. Rental housing in
well-located villages provides migrants the opportunity as well as the mobility and flexibility
to function as construction workers, domestic workers and provide all sorts of informal
services in the city. For the new generation of landowners the village is a launch-pad for

7
fulfilling aspirations of higher education, jobs, consumer goods and housing in city
neighbourhoods. Sections of the village that are in close proximity of the developed city,
typically adjoining main roads and metro stations cater to populations outside the village with
shopping areas, middle class housing etc., while the inner areas with their narrow streets
remain the precincts of the poor and informal trade and industry. This informal trade and
industry is well networked with other informal and formal trade and manufacturing. Activities
such as e-waste recycling, garment factories and metal working and auto parts industries
found in urban villages of Delhi are the ‘hidden’ elements of global value chains, which thrive
because of the low costs associated with low wages, child labour, home-based work and
lack of enforcement of workplace and environmental laws (Toxics Link, 2013) yet in a secure
environment of legal property rights.
Figure 3: Housing and employment linkages in urban villages

2.4 Social and environmental costs of low cost

However, the urban village economy of seemingly unending cycles of low incremental
investment in, and increasing income from, property results in the inevitable consequences
of overcrowded, high density, unsafe and unhealthy housing with very poor quality
infrastructure. Studies in some of Delhi’s urban villages show that unregulated industries
result in very high levels of air and noise pollution, discharge of toxic chemical into drains
and closed work spaces with very poor ambient indoor air quality (Toxics Link, 2014). Health
related studies show the disease burden of such environments (Balan, 2012).

3. Urban villages in Navi Mumbai

Navi Mumbai in the Mumbai Metropolitan Region (MMR) was conceived as a new town as a
counter magnet to Mumbai and planned for a population of 2.1 million. It came into being in
1970 and reached a population of 1.12 million in 2011 in its 14 planned ‘nodes’ or townships.
The site selected for Navi Mumbai had an area of 344 sq. km. and included 95 villages and
two towns. A little more than half the proposed land area was owned by the government and

8
the remaining was acquired from 25,000 private land owners by the Government of
Maharashtra State and handed over to City and Industrial Development Coporation (CIDCO)
to plan and develop the new town and to Maharashtra Industrial Development Corporation
(MIDC) for developing industrial estates3.
Figure 4: Location of urban villages in Navi Mumbai

Source: CIDCO, 1973

3.1 City building starts with rehabilitation of existing villagers

About 117,000 people inhabited the villages in 1971. As in Delhi, village habitation areas,
known as ‘gaothans’ were not acquired allowing the original population to remain. However,
the expropriation of farm lands and reclaiming of marshes along the creek meant loss of
income from the traditional occupations of farming, salt cultivation and fishing. In addition to
land owners a sizable community of landless agriculture labour, salt pan workers, fisherfolk
and artisans were affected (Shaw, 2004). All these people became the Project Affected
Persons (PAP). The villages are now occupied by many others. There has been a five-fold
increase in the gauthan population between 1971 and 2011. Villages occupy 35% of the
developed land of Navi Mumbai and constitute 43% of its 2011 population.

3 Both in Delhi and Navi Mumbai creating public land reserves by expropriating land was seen as a
way of ensuring planned development as well as using land to generate financial resources for public
infrastructure and undertaking non-profitable activities such as low income housing.

9
Rehabilitation of villages and their integration with the new city was identified as one of the
earliest tasks to be taken up in the Navi Mumbai Development Plan.“…villages in New
Bombay (as it was then called) area will not only be kept intact but will also be actively
developed by providing social amenities and otherwise encouraging the process of
absorption of the rural population into the new urban setting to enable them to participate
fully and actively in its economic and social life” (CIDCO, 1973).
To begin with, CIDCO entered into an agreement with village Panchayats4 regarding the
compensation and rehabilitation package (Shaw, 2004). Villagers were allowed to cultivate
their land till it was required for development. In the interim, economic rehabilitation
programmes were initiated with education and skills training but there was poor demand for
these. Preferential employment in industry and services meant low paid jobs as villagers had
low levels of literacy and skills for urban jobs. As part of the effort to build entrepreneurship
among the villagers, CIDCO awarded small contracts for activities such as horticulture and
sanitation only to villagers and also permitted certain price concessions for them in larger
contracts. Even though this practice was discontinued after a while, it did make the villagers
employable for lower end urban jobs and encouraged some of them to become small and
medium civil works contractors, and find plenty of work in the fast growing new city
(Adusmilli, 2004).
The second rehabilitation scheme was the Gaothan Improvement Scheme, in which grants
were made available by CIDCO to the Panchayat for implementing priority infrastructure
needs of the village. Since village lands were not owned by CIDCO, it really had very little
say in the matter and even though provision of piped drinking water, toilets, street paving
and drainage brought about some improvement in living conditions, improvements were
piecemeal and benefits were cornered by the more influential, either in terms of location of
services or contracts (Adusmilli, 2004). When Navi Mumbai Municipal Corporation (NNMC)
was formed in 1992, panchayats were dissolved and services in villages along with the rest
of the city came under it with better results.
Finally, land compensation is provided to villagers in addition to financial compensation in
the form of developed land at lower than market prices. This started with the Gaothan
Expansion Scheme (GES), under which 10% of the land acquired from a village was
reserved for development of the village5. GES lands were around the existing gaothans. But
there was considerable delay in allotment because of disputes regarding entitlements and
pricing of the land and delays in providing infrastructure. In some villages the area
earmarked for GES was subdivided illegally and sold before the allotments could be
made. The GES benefited a small number and in the four years of its operation only 27 Ha.
land was allotted for 7 villages (http://www.cidco.maharashtra.gov.in/).

3.2 Negotiating a better deal

The delay in implementing GES got linked with the protests of farmers against the
government acquiring their lands at low rates and selling it on for profit for urban uses. The
protests were supported by political parties and escalated into violent protests, police action,
arrests, loss of lives and court cases. In spite of upward revision of compensation rates, the
agitation grew and snowballed into a major protest movement till the government agreed in

4 Democratically elected for local governance in rural areas

5 Half the land is used to develop roads, social facilities, open spaces, etc. and the remaining 50% of
land in the form of residential plots between 100 and 500 sq m was returned to PAPs. Landless
labourers, salt-pan workers and village artisans whose livelihood depended on the rural activities that
existed before CIDCO acquired the lands, were entitled to 40 sq m plots under this scheme.

10
1986 to a land return scheme (Shaw, 2004) under which one eighth or 12.5% of the land
acquired from farmers was to be given back as developed plots in planned and serviced
layouts at one tenth the cost of development. In 1990 GES was merged with what is
popularly known as the 12.5 Scheme. After this, the takeover of lands progressed smoothly
but slowly and with the obvious implication of an additional and growing financial burden for
CIDCO till it completes the implementation of the scheme6. The 12.5 Scheme became fully
functional in 1994 but implementation was slow till 2005. In 20 years about 750 hectares of
the earmarked 1064 hectares have been disbursed. (http://www.cidco.maharashtra.gov.in/)

Despite these efforts, gaothans and their surroundings present a picture that is not very
different from the overcrowded and underserved urban villages of Delhi and here too land
relations have played an important part. CIDCO’s actual delivery of the elaborate and
complex rehabilitation package, especially up to 2005 was unsatisfactory and inequalities
between CIDCO built nodes and original gaothans were increasing. Continuing
dissatisfaction has sustained gaothans as an intense arena for political activity in three
distinct but interlinked ways: first in demanding a fair rehabilitation package, second in
demanding opportunities equal to CIDCO nodes, and finally in their representatives entering
the formal democratic system as municipal councillors7.
The latest initiative of the government is the proposal to implement an Urban Renewal
Scheme in partnership with private developers for which development regulations are being
revised by NNMC. It will be applicable to ‘congested areas’ that is, ‘gaothan areas and
extended gaothan areas up to CIDCO development sectors’ (NMMC,2012) and will entail
high density redevelopment of these areas with Floor Space Index (FSI) of 3 and additional
incentive FSI for developers who participate. The existing residents of these projects will get
apartments of the size they currently occupy with a minimum of 33 sq m. The remaining
apartments will be sold for profit by the developers. The scheme can be initiated when 70%
of the residents of an area agree to pool their lands together and invite a developer to work
with them. The announcement of the scheme has met with protests from gaothan land
owners, who are apprehensive about losing their land and their way of living and uncertain
about the fate of informal shops, industries and workshops in the villages and 12.5 lands.

3.3 Living off the land

Events such as the shifting of the wholesale vegetable market, establishment of the
industrial area and special economic zone, starting of the rail link with Mumbai, and
development of the nodes stimulated the transformation of Gaothans with investment in
property, both for improving living conditions and for enhancing incomes. The rehabilitation
and compensation package has made resources available to villagers for investment both in
terms of land and money. As property values soared in the planned city, Gaothans became
attractive not only for the poor but also the middle class. The allotment of plots under the
12.5 scheme brought property developers in the picture, with high rise building and sale of
apartments. However, Gaothan lands within the original village boundaries cannot be
transacted legally. As in Delhi, land owners have traditional occupancy rights but no
documents to prove ownership. Another similarity with Delhi is that building activity is not in

6 12.5% returnable land actually amounts to 24% of the salable land area of Navi Mumbai.
7 Adusmilli, 2004 points to the gaothan leadership getting built and strengthened during the initial
years of the struggle. The first election of NNMC gave these leaders the chance to emerge as
recognised elected representatives, with gaothan based leaders cornering two thirds of the seats.
This has continued with every election, whichever be the party in power and has helped villagers to
acquire basic services and their better maintenance as well as profitable contracts for works.

11
conformity with regulations and takes place without any permission even though there are
Gaothan-specific regulations. Gaothans have developed as high density mixed use areas
with inadequate services and unsafe buildings. A study of the environment in Navi Mumbai
raised concerns for the deteriorating environment in the Gaothans (XXX)
As in Delhi, income property has become the main source of livelihood. The allotment of
plots in the 12.5 schemes sparked off intensive real estate activity. The PAP can develop the
plot himself or enter into an agreement with a developer for development8. Farmers who had
large land holdings have benefited the most with ownership of several plots, which have
been used to leverage lucrative deals with property developers through various
arrangements: power of attorney, sale, lease, sharing benefits etc. and build assets such as
rental housing, apartments for sale, shops and show rooms, which turn into continuing
income streams. Some of this income gets invested in gaothan properties, with returns
coming as rent or sale of small residential apartments and rooms, commercial space,
workshops and small industries.
Figure 5: Incremental investment in property

As in Delhi the concern to maximise profit has meant 100% plot coverage and buildings
much higher than the permitted 3 stories with increasing densities and building mass, while
streets remain narrow and infrastructure does not improve sufficiently. This is increasingly
turning gaothans into habitations of the poor. Even the 12.5 scheme areas have low quality
development because CIDCO has compromised standards to keep development costs low.
The development regulations9 for the 12.5 area in any case permit less open space and
higher densities as compared with other parts of Navi Mumbai and also allow mixed use and
lower standard of services, further worsening the situation in the settlement clusters
consisting of gaothans, 12.5 lands, unauthorised layouts and slums and intensifying the

8 Initially transfer of plots was not permitted for 10 years after allotment but property transfer through
‘power of attorney’ was rampant and the state lost out on revenues. Sales of 12.5 plots are now
permitted.
9 On the 12.5% entitlement, only 30% is reserved for roads, social facilities and public utilities. The

plot allotted to the individual has 1.5 FSI and 15% commercial component permissible on the plot.

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divide between the nodes and gaothans. These concerns have provided the rationale for the
new policy for complete redevelopment of gaothans and surrounding areas.

3.4 Informality, diversity and the poor

In 2003 CIDCO commissioned a study of villages to understand the changes and found that
the change started with the availability of monetary compensation and basic infrastructure,
which stimulated accumulation of assets such as vehicles, televisions and refrigerators and
house improvements and additions for family use, renting or economic activities. Many of the
plots had building material shops and workshops. The study found that the proportion of
tenants had risen to 53% from the figure of 18% in 1971. These tenants were migrants,
predominantly from Maharashtra and were employed in industry or services. Surprisingly,
tenants as well as villagers mostly found work in their own and other villages in Navi Mumbai
rather than in other areas of the city, reinforcing a parallel informal economy bred in the
network of gaothans.
On the other hand, people of slums or squatter settlements, mostly migrants from other
states and poorer than village residents, were better connected to the city working as
construction labour, quarry workers, hawkers and vendors and as domestic help. Many of
these slums came up next to villages and used village infrastructure. Unauthorised layouts in
which CIDCO land was illegally subdivided and sold also clustered around gaothans and
used the village infrastructure. So even before the GES or the 12.5 schemes took off, some
of the gaothan surroundings were already developed informally.
The poor have also benefited in several ways from the rehabilitation package as well as from
the informality that continued in its inadequate implementation: 40 sq m plots in GES or 12.5
schemes provided landless agriculture labour and saltpan workers with a foothold in the
city’s economy with the possibility of building secure housing, workshops and shops, which
they could use or rent out. Housing built in gaothans is much more affordable to buy or rent
as compared with public housing. There is also evidence of a ‘filteration process’ by which
CIDCO built subsidised public housing for economically weaker sections and low income
groups is sold at a premium with the original allottees moving into gaothans (Shaw, 2004).
Then there are the rags to riches stories of poor villagers who made much of the preferential
contracts for quarrying, earthwork and horticulture (Adusmilli, 2004). Many of them have
become small and even big civil works contractors, especially because of the building boom
on the 12.5 plots.

4. Lessons from Delhi and Navi Mumbai

The case of urban villages in Navi Mumbai is interesting for two important reasons: firstly it
demonstrates an ‘active’ policy approach, which is very different from the laisez faire
approach followed in Delhi, Mumbai and other Indian mega cities. Secondly, the approach to
developing Navi Mumbai as a new city adjoining an existing metropolis, with public land
ownership as the basis for self-financing development; controlled, time bound development
of industrial estates and port; housing for different sections of the population; central
business districts and rapid mobility corridors has resonance with what later became the
Chinese development model, of course at a much grander scale. Here again the policy for
integration of villages into the city from inception is vastly different from the ‘island’ approach
followed until recently in Chinese cities.

13
The lack of efforts to bring urban villages into a functional domain of administrative
coherence through reforming the system of land holding has been a key weakness of policy
in Delhi, Navi Mumbai, other Indian cities and even in China. This has hampered integration
of these villages with the city and kept them in a state of informality, even though land
owners have tenure rights by possession. In the absence of this reform other solutions are of
a patchwork nature.
There is a case for letting the incremental land development process flourish, as its flexibility,
entrepreneurial spirit and local flavour can never be captured by the homogenised process of
‘modern’ city planning and development. It actually constitutes an efficient market
mechanism for delivery of housing and jobs to the in poor. No policy is talking about
supporting this strong and vibrant urban village based informal economy, which is based on
using land as a resource to generate prosperity for villagers and provide migrants a foothold
in the urban economy.
The question is, are there better alternatives? Can urban villages continue to hold this
function, without their downsides? Can the city planning and development process
accommodate such incremental development and also ensure that thresholds of health,
safety and pollution are not crossed? Neglected by city planners so far, is the urban village
the new frontier of urban planning in Asian mega cities?
The concept of "urban village" opens a vast theoretical and practical area for reconsideration
of the urban reality in Asia. There are some critical questions in relation to the current
thinking in Navi Mumbai, Delhi and also Chinese mega cities of redevelopment as the
answer to the problem of what urban villages have become. A mega city can be
characterised by the existence of a heterogeneity of socio-territorial mosaics, which are part
of its historic process of development. The urban village is part of those mosaics and has
become an arena to accommodate a discrepant multiplicity of urban challenges – from
housing the poor, providing them with jobs, fostering social capital, thriving on exploitative
labour relations to accommodating environmentally precarious industry. As cities grow they
will continue to engulf villages within themselves. Managing the intersection of traditional
sociocultural orders and modern urbanized lifestyles is emerging as one of the major
challenges facing Asian urban management.

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