Public Disclosure Authorized

URR7306
VOL. 1
THE WORLD BANK

DEVELOPMENT ECONOMIC S DEPARTIENT 'laLK Ort

URBAN AND REGIONAL ECONOIIICS DIVISION
Public Disclosure Authorized

URBAN AND REGIONALI REPORT No. 73-6

REPORT ON BOMSAY

Main Report

(This report has four annexes)

Public Disclosure Authorized

B. B. KING and Others

March 31, 1971

Public Disclosure Authorized

These materials are for internal use only

and are circulated to stimulate discussion
and critical comment. Views are those of
the author and should not be interpreted
as reflecting the views of the World Bank.
References in publications to Reports should
be cleared with the author to protect the
tentative charaLter of these papers.
This report is based on the findings of a mission that visited Bombay
from November 10 to December 5, 1970. The mission consisted of the
following members:

King, Benjamin B. - Chief of mission

Bahl, Roy W. (Consultant) - Fiscal Affairs

Bargholtz, Percy B. - Public Utilities

Berrie, Thomas - Public Utilities

Kraft, G. (Consultant) - Transportation

Mera, Koichi - Urban Economics

Strombom, Donald A. - Transportation

 REPORT ON BOMBAY

TABLE OF CONTENTS

Chanter Page No.

I SCOPE AND SETTING ....................................... 1

Introduction ......... .................................. 1

A Brief Anatomy ......... ..... .................... 1
The Metropolitan Region ................................ 5
Center, State and Municipality ......................... 6

II - TRANSPORTATION .......................................... 9

Mass Transportation .................................... 9

Movement of Freight .................................... 17
Air Transport .......................................... 21

III - PUBLIC UTILITIES ........................................ 22

IV - LAND USE, HOUSI?'G kND THE URBAN PRICE MECHANISM ... ...... 27

Housing ................................................ 27
The Urban Price Mechanism .............................. 28
Land Use Plans ......................................... 31

J - THE FUTURE OF THE REGION ................................ 33

The Fiscal Position of Greater Bombay ................... 33

The Min Citv ............ I. 34
Planning for the Region ................................ 36

APPENDIX ON STATISTICS ........................................... 38

ANNEX I*

MAPS

STATISTICAL TABLES 1.1 to 6.8

* Bound separately for easier referernce to the maps and tables mentioned
in the text.
 REPORT ON BOMBAY

CHiAPTER I

SCOPE A1ND SETTING

Introduction

1. This report does not purport to be comprehensive in any sense of

that word. On the basis of a Lhree-week visit such a claim would be pre-
sumptuous. It is typical of cities thac information either does not exist
or is not readily accessible in many fields; where it does, it may be un-
certain in meaning or conflicting. Bombay is no exception although the po-
sition is in come respezts much batter than one might expect. Therefore,
rore questions will be asked in the report than judgments given, the ques-
tions themselves will be on different levels, and such judgments as are
made will be made with different degrees of confidence. The report is an
opening gambit and must be thought of as such.

2. One theme runs through the report, superseding but not excluding
others. This Js the allocation of resources to the development of the city.
What motivates the allocacion for each purpose? On what information and un-
der what constraints does each agency make its decision or put forward its
proposals? How are all the allocations put together and what sense doea
the final result of this process make?

A Brief Anatomy

3. Bombay is the financi.i capital of India and its leading port.

After Calcutta it has the largest population and largest industrial out-
put. It is the capital of the State of Maharashtra. Greater Bombay,
the present jurisdiction of the Bombay Municipal Corporation, has a pop--
ulation estimated in 1968 at about 5.4 million. This is lebs than 1% of
the cotal population of India, but the income generated in Bombay is in
excess of 3%. Industrial output is of the order of 20% of the total for
all India. Bsmbay's importance in the economy in very mech greater than its
share in population. 1/

1/ See Table 1 on the following page. The figures are rather old; they
have been chosen to ensure comparabllity.
 -2 -

Table 1

COMPARATIVE FIGURES FOR INDIA, KAHARASH.TRA, AND BOMBAY

Greater Bombay as
India Maharashtra Bombay /1% of Inidia

Population (19 61)

Total (millions) 439.2 39.55 4.15 (5.28) 0.9

Urban (millions) 78.9 i1A6 4.15 (4.64) 5.3

Males per 100 females 106 107 152 ...

Income, 1960/61

Total (Rs. billion) 133.1 15.4 4.25 (4.80) 3.2

Per head (Rs.) 307 393 1,025 (925) ...

Industry, 1961

Value added (Rs. billion) 12.0 3.0 2.3 19.5

Employees (millions) 3.70 0.78 0.51 (0.54) 13.8

Value added per industrial

worker (Rs.000) 3.2 3.9 4.6 ...

Public Expenditure (Rs. billion)

Annual (1966/67) 61.4 4.6 0.4 0.6

Fourth Plan
(1969/70 - 1973/74) 159 9 n.a.

/1 Figures in parentheses are for the metropolitan region.

Note: Annual expenditure includes all capital and current expenditure. For
India it is the consolidated zotal of the center and the states;
for Maharashtra and Bombay, only the budget expenditure of the state
and municipal authorities. "Plan" expenditure includes most capital
and some current expenditure.

Sources: -Statistical Abstract of Maharashtra State 1966-67, pp. 2, 3, 4, 18.

-Maharashtra Quarterly Bulletin of Statistics, Vol. VII, No. 4, pp.
4, S.
-Report on the Draft Regional Plan of Bombay Metropolitan Region,
Vol. I, pp. 51 ff.
-Fourth Five-Year Plan 1969-74, Planning Commission Government or
India.
-BMC inunicipal accounts.
 - 3 -

4. Bombay was founded as a fortified trading post on a collection

of islands long since consolidated by reclamation into one, flanking the
best natural narbor on the uest coast of India. The central business dis-
trict is still known as the Fort. Frorn this origin, Bombay has expanded
up through Salsette Island to the north, and northwards and northeastwards
onto the .ainland. There are thice Bdmbavs, rLflectinlg this historical
development. In ascending order of size - and descending order of density
of population - they are Bombay City, Greater Bombay, and Bombay Metropol-
itan Region. Bombay city - or the island city 1/ - was until 1950 the ex-
tent of the jurisdiction of the Bombay Municipal Corporation (Table 1.1). 2/
Its jurisdiction was extended 'n two stages (in 1950 and in 1957)
to embrace the suburbs wthich occupy most of Salsette Island to the north
(see Map 1). The city plus the suburbs together are know-n as Greater
Bombay. The metropolitan regior. is neither a political nor a historical
entity. It was defined under a Regional and Town Planning Act as the
basis for a study by an ad hoc board 'known as the Bombay Metropolitan
Regional Planning Board. It includes the rest of Salsette Island and
large areas to the north and east of it on the mainland.

5. Like all netropclitan areas, Bombay has grown faster than the
country of which it is pert (Table 2.1). In 1901, its population was less
than one half percent of lzdia's. Growth has fluctuated; there was none
in the decade 1921 to 1931 because of the recession, while during World War II
there was very rapld growth, a decenniel rate during the decade 1941-51 of
about two thirds. In the following decade, 1951-61, the decennial rate was
38%. Growth has taken place lately largely in the suburbs, whose population
has more than doubled in each of the two decades from 1941 to 1961. The
principal industrial growth took place in the suburbs and, more recently,
beyond. There has been substantial industrial expansion in Thans just be-
yond the municipal limits, in Trans-Thana across Thana creek on the mainland,
and in the complex of towns further east around Kalyan and Ambernath, mainly
on industrial estates operated by the M.IEDC, a state-owned corporation.
The various towns along the Central railway from Thana to Kalyan, some of
them already dormitories for Bombay, had a combined population of 350,000
in 1961. Tha growth of these towns has almost certainly increased as they
have come into the =nbit of the metropolitan area.

6. With few exceptions. which may be statistical rather than real,

the strtrctural characteristics of Bombay's population have changed little
in the last 60 or 70 years. A preponderance of the immigrants have always
been men, who most often retain ties to their villages; they may come tem-
porarily for work or they may bring their families later. Consequently,
the ratio of women to men is lov, as in Calcutta; in 1961 it was 663 per
thousand (Table 2.2). Consequently, there is a very high proportion of men
in the 15-59 age bracket, 42% of the total population co.pared with 26% in

1/ The wyord "island" is used here and henceforward as shorthand for Bombay
city as opposed to the suburbs or Greater Bombay as a whole.

2/ Tables and maps referred to he,.e and henceforward are in Annex I.

 - 4 -

the rest of Maharashtra; correspondingly, there are far fewer children of

either sex (Table 2.3). At the census of 1961, two thirds of the people
were born outside Bombay, a proportion not quite as high as it was in
earlier years. In the first four decades of the century net migration may
have accounted for more than the increase in pcpulation; 'n the decade 1951-
61 about half the increase.l/ The or'gin cf the migrants appears to have
been changing. In 1961, close to 407 of the "out-born" came from states
other than Maharashtra or nearby Gularat; this seems to be a higher proportion
than hitherto (Table 2.4).

7. The outward development of Bombay and the transportation svstem

which goes with it broadly resemble the form of the letter "Y". The trunk
is the island, che crotch is the southern tip of the suburbs; the arms ex-
tend into the suburbs of Salsette Tqland, which is divided in the center by
a national park, the airport of San;a Cruz and other open spaces, and onto
the mainland beyond. Despite the growth of Industry in the outlying torns
and in the suburbs, there are more EAployees living there than there are
jobs; the reverse is true on the islar.d (Table 3.4). Therefore, the
princinal rm vement in the morning is from the two arms of the "Y" down to
its trunk, and the reverse in tFe evening. Broadly speaking, the island
provides industrial employment in the northern part of it; wholesale and
retail trade and work on the docks rurther south; and office employment in
corrercial houses, banks and governzez.t offices in the Fort area close to
the tip.

8 Bombay is often identified with iacernal and external trade and

with assoc:ated activities such as cor=odity and stock exchanges and
financial institutions. These have always been important in Bombay, but
they are by no means predominant. 3ombay has long been one of the leading
textile centers in india. .Employnent in this industry has however grown
litcle in recent years: growth has s-:'tched to less traditional industries,
like chemicals ,nd engineering. In the 1961 census about 40, of workers
were in manufacturing of all kinds, but factory employment would be
substantially less, of the order of 30Z. The government is also a
large employer, about 20% of the labor force; this includes not only
the three levels of government proper, center, state and city, but also
the Railways, the Port and various financial institutions.2/ Bare statistics,
however, hardly do justice to che quality of employment in Bombay, which
probably is the leading center in India for sophisticated skills and
specialized ancillary and consultant services to industrv and conmece.

1/ See K. C. Zachaviah, Migrants in Greater Bombay, 1968. p. 15. As

the at:thor points out (pp. 93-106), there is substantial emigration
coiicealed in the 'net' figure.

2/ For various employ,nent statistics, see Tables 3.1 to 3.3, 4.1 and ';.2.
9. The income level in Bombay was estimated in 1961 about three times
that of the rest of Maharashtra. One need not look far for an explanation.
In tha rest of Mahara:hlra the great majority of people are engaged in low
productivity occupations, such as agriculture and household industrv. Even
outside of agriculture, the productivity of the average worker ia Bombay is
a great deal higher than in the rest of the state.l/ Income has the usual
skewed distribution. A recent enquiry (in 1968) suggests that about two
thirds of the households have an income of less than Rs. 400 per month,
perhaps an average per capita annual income very roughly of the order
of Rs. 500, which would still be substantially higher than the average
for India as a whole. Amorg the poorer people, hovever, there is a
submerged class, about a sixth of the total population, with household
incomes of under Rs. 150. These probably correspond to the so-called
"hutment" dwellers or squatters on vacant land.

The Metrooolitan Region

10. The Bombay Metropolitan Regional Planning Board, which was consti-
tuted in 1967 at the time when the region was first defined, presented its
Draft Regional Plan to the state government in 1970. The principal oper-
ational significance of the Plan is a land use plan for the metropolitan re-
gion which, when accepted by the state government, will be binding for the
next ten years. Beyond that, the Board made a large number or recommenda-
tions and it included in its report a list of projects ca.led an "Immediate
Operational Progran for Other Bodies to be Completed". What it did not say
and, in the circumstances, probably could not say was how these projects
could be financed. Nor will it be able to do so in the futu.:e because once
its plan has been accepted by the state government, the Board will go out
of existence. The Board reco-zended against the constitution of a develop-
ment authority for the region and, instead, recommended a hligh level coordi-
nating council. Such a council has in fact been formed subsequently with
the Minister foi Urban Development as chairman, but it has no staff. Th6
report of the Planning Board was thus a one-shot affair.

1/ It is tempting to couch comparative statements about income in terms

of inc3me per worker and, indeed, there are figures to this effect in
Table 3.1 in the annex. However, these can be quite misleading.
Des'ite the much higher proportion of men of working age in Bombay, the
so-called participation rate is lower than in the rest of the state,
41% as against 49%. This is because of the prevalence of family laoor
in the rest of the state engaged principally in agriculture. Bombay
has a high proportion of students and of women engaged in household
duties who do not form part of the labor force. In the rest of the
state the people in these categories are a much lower Droportior, since
many in the corresponding age-group are classified as agricultural
workers (Table 3.2). One may well question a simple statistical
comparison between a family on the one hane, in which the man werks,
Mis wife stays at home and the children go to school, with another
familv in which el'. of cnem work on the land but are in different
degrees not fully emp,oyed on it.
11. The most far-reaching recomziandation of the Planning Board was
the development of a i:ew city across the harbor from Bombay on the mainland,
known variously as the Metrocenter or Twin City. Without this development
cle Soard projected Greater 83rhay would grow from a population of a little
over four million in !961 to nearly ten million in 1991 and the outlying
urban areas from about half a million to one and a half million in the same
seriod. This prolection was based on the continuation of the present trend
for the development of Bombav, in wh.ch the centers of econom'c activity
are mainly down on the island while the population is strung out in a
northerly and northeasterly direction along the railway lines. In order to
ptrevent the growing "congestion" this causes, the twin city was proposed as
a new focus of economic activity which together with other satellite towns
would draw people from the city to the excent of nearly three million
(Table 27.5).

12. In essence, the notion of a twin city has been accepted with the
creation of the City and Induscrial Development Corporation of Maharashtra
(CIDCO), a state corporation 1ith very wide powers for urban development
throughouL the '.tate. Its prinzipal task initially, however, is well re-
cognized to be the development of the twin city; already 55,000 acres in
the project area have been "notified", that is, the owniers have been put on
notice that the government cay exercise an option within the next three
vears to buy the land, during which time their use or sale of it is re-
stricted. The metropolitan region, h:zSever, is more than Greater Bombay,
for wnich the Municipal Corporation is the authority, ani the twin city to
be, for which CIDCO is now responsible. The towTis along the railway lines
leading out of Bombay, which already contained a population cloce to 400,000
in 1961 and have grown considerably since, are linked to Bombay by suburhan
rail services and, togethe:, their industrial employment is in total as
large as that of Poona, frequently regarded ae the second industrial center
in the state (Table 4.2).

Center, State, and Municioalitv

13. -The figures under Expenditure in Table 1 are significant in two

ways. First, one may compare the annual expenditure of the Bombay hunicipal
Corporation with public expendiure in India as a whole (the consolidated
total for center and states) or with the public expenditure of Maharashtra
State. Contrary to the trend in other figures, which are hiFher than the
proportion of population, this one is lower. This does not mean that the
level of all public expenditure in Bombay is .ow, but it does indicate the \
reduced role of urban goverrGent in India. The second significant figure
is one that is not there, the share in Plan expenditure. If Bombay can be
said to nave some sort of plan o' expenditure comparable to those for India
as a whole and for states, it consists of bits and nieces of other people's
plans plus a little expenditure of its own. Financlng of expenditure ma"
be by the city, the state, the center or any combination of these, including
all three. Capital expenditures under the city's direct control are very;
limited. Responsibilities within Bombav, and even more within the metropo-\
litan regior, are divided among all three levels of government. It would
take considerable time and effort to find ouc what public expenditure in the
Sombay region has been.
 - 7 -

14. The Railways, which run the vital suburban services 1/, are oper-
ated by two divisions of the Indian Railways, the Western railwav and the
Cencral railway. National roads run into Bombay; the state government,
through its Buildings ard Cocmunications Depart.nent, is responsible for
rajor road construction in Bcmbay. Virrually all expenditure on railways,
civil aviatior, and most of the expendirure for ports is the province of
the center and !ts agencies. There is, however, locai representation on
the Bonb.oy Port 'irust, which operates the port of Bombay. The Municipal
Corporation, through fts subsidiary, the Bombay Electric Supply and Trans-
port Undertaking (BEST), runs the buses in Greater Bombay and electricity
distribution in Bombay city (a private company does the latter in the su-
burbs). Two subsidiaries of the state government, the Maharashtra State
Housing Board and the Maharashtra State Road Transport Corporation, are
respectivaly responsible for public housing and for bus transport outside
Greater Bombay. CIDCO would have the responsibiliry for all the usual ur-
ban services in the proposed area of the twin city.

15. The story is 3uch the same for public utilities. Telecommunica-
tions are wholly naLional (the Indian Posts & lelegraphs Department). In
elec.ric power the national level is engaged through the Central Water and
Pcy.er Commission. which scrutinizes the expansion plans of the state elec-
t:icity boards, and through the Atomic Energy Department which is also
engaged in p.wer generation. The state is engaged in generation, transmission
and distribution, through the Maharjshtra State Electricity Board (MSEB),
and regulates the private utilities tn the sector. The metropolitan region
consumes about three quarters of all the power in Mahav3shtra. For water
supply and sewerage the primary responsibility rests with the municipalities,
but the state is responsible for the construction o: dams; it gives financial
assistance to municipalities and other local bodies for investments; it carries
out the construction of new facilities for all municipalities but the BMC
itself- and, through the .'aharashtra Industrial Development Corporation (MIDC),
it is cirectly engaged in water supply and distribution in some areas.

16. Such a list of divided responsibilities is far from being unusual.

Nevertheless, it does raise questions abzut the future planning of the allo-
cation of resources within the metropolitan region. Possible claims on
these resources are large and they will need stringent examination before
allocation is made; and other economic policies should be consistent with the
allocation. It is by no means clear how this is to be done under the e ,.ing
system.

17. in deciding on the allocation, the authorities will have a formi-

dable list of problems to face. The preamble of the summary version of the

1/ One third of all passenger-trips in India by rail are made in Bombay.

Planning 8oard's report describes them in this way:

"Bombay the beautiful" is no more beautiful. Many parts

of it are not even tolerably clean and healthy. Housing
deficits are ever_uidening: and slums, like a cancerous
growth, is threatening to 6eeak down and serious law and
order situations develop on the slightest provocations.
Tie geography of the island imposes severe limitations
on the optimum and healthy population size and grrnth.
Despite these limitations, however, the city contiaues
to attract large streams of migrants. Concerted action
and co-ordinated planning is necessary to salvage this
situatlon, il

With one exception this is a pretty fair summary; the exception is an im-
pending shortage of power, which is not yet an actual problem and which it
may be possible to forestall to some extent. In the following chapters we
shall examine how these problems have been dealt with in the past and how
it would appear that the agencies concerned intend to deal with them in
the future.

1! Strategy for Bombay Metropolitan Regicn, p. 5.

 - 9 -

CCHAPTER 11

TRANSPORTATION

ass Transportation

18. Mass transportation ranks first among the possible claimants on

resources, since proposals in the vind for the next decade could cost as
much as Rs.5C0 crores. Ezpenditure on this scale is contemplated because
of the supposed need to build several subway lines down the length of the
island of Bombay ci.y ir.order to accommodate the growth of comrM,ter traf-
fic. Among commuters tc work at the peak hours, about twice as many use
the railway as their main node as use the buses; in terms of passenger-
kilometers the discrepan^y must be much greater. The neec; for a subvay
turns on.the assumptions used for determining the ultimate capacity of
the railways and the growth of commuter traffic. As we shall see, bott.
these assumptions are o;en to question.

19.. Suburban transportation is provided by the two divisions of the

Indian Railways u."hich haze .Aeir headquarte:s in Bombay, the Western and
the Central (see Map 2). The Western railway line from the terminus at
Churchgate near the foot of the island is double-track for about four
kilometers to Grant Road, the station before the main line terminus at
F-nbay Centrall/; it has 'our tracks for the remaining 30 kilometers nir:h
z.o Borivli, but suburban services extend on the two main lines Across tne
creek as far north as Virar (60 kilometers). On the v. .tral railway,
w'.ich starts at Victoria Terminus fairly near ChurchgaLe, four .-rks
rin up the eastern side of the suburbs through the town of Thana c. the
o0.tskirts of the municioal limits as far as Kalyan 54 kilometers away
on the zminland. Lesser suburban servicea run even further, another 67
..,ometers to Kasara on the main line to Agra, and southwe3t 46 kilcmeters
to Karjat on the main line to Poona. These rail lines roughly, but by
no means exactly, parallel the main road system running into Bombay, which
includes a .jur-lane expresswe' through the suburbs on either side of
Salsette Islani as far as iLs Junction with the i:land to the south. An
extensive network of bus services within Bmbay city is provided by BEST.
In the suburbs BEST provides principally feeder services to the railheads.
There Is a limited aount of long distar._e bus service from outside BombAy
operated by the Maharashtra State Road Transport Corporation.

20. The forerunner of traffic studies in Bombay was one made by

Wilbur Smith in 1963. despite the fact that even nuw only about one in
80 persons owns a car in Bombay, that some 902 of all passenger-trips in

1/ An additional two tracks qre under construction on these four kilometers.

 - 10 -

iombay a-re made by rail or bus and zany of the remainder consist of short-
distance taxi trips or school bus trips and the likei/, the study was heav.ly
oriented towards passenger au:tomobiles. In projecting future demand for
trafi,c thc study had to take as its basis the existing land use plan for
Greater Bombay. The scudy recommended an expenditure of about Rs.96 crores
in the following 20 years, mainly for freeways up the sides of the island
some-hac on the analogv of the West Side highway in New York, with cross-
connectors. Lit:le was do,ne to im.plement these proposals until the Fourth
Plan under which 12 crores were allotted (4 crores each from the center,
the state and the city) to building parts of the western and probably less
r.ecessary of the two freeways. both of which are something of a luxury.
Most cities woald be happy to have the lw volume of automobile traffic
that Bombav has.

21. A direct descenidanr of the Wilbur Smith study .as the Mass Trans-
portation Study of Bombay. This s udy was prepared by an ad hoc body knowtn
as the Traffic Cell createc! in the Directorate of To-n Planning of the
state government. It carried out its work- in 1968 and 1969 and fin'shed
its final report .n the latter year. As the title would imply, thc study
is much more heavily oriented :oward mass transportation. Such a need had
been alluded to in the Wilbur Smith report and subsequer.tly emphasized by
a body known as thp Metropolitdn Transpcrt Team appointcd by the Central
Pluinning Commission One may take issue with some aspects of the metho-
dology followed by the Traffic Cell and with some of its conclusions, but
the fact remains that its final report is by far the most comrrehensive
study of the movement of people in Bombay. It could well have been pub-
lished to enable those intcrestei in the future deveLopment of Bombay to
debate the many issues more solidly on facts and less on mere opinione,
efpecially as the Traffic Cell has now been dissolved.

22. According :c the Traffic Cell's report, the present patter-A of

movement. in Bombay is as follows. Of the 5.4 million people in Greacer
Bombay in 1968, about 3 million take regular trips every weekday - to work
or to school. About ' 3/4 million, including most of the students, go oa
foot. The remaining 1 1/4 million use one or more modes of transportation
(Table 3.4).

23. Since there are more jobs than workers in the island and vice-
versa in the suburbs and outlying areas, the predominant movement at the
peak hours is in one direction: north-south in the morning and the re-
verse in the evening.2/ There is a substan:ial and apparently increasing
movement in the opposiLe direction, but there is not much evidence to say
I:ow much. The volume of rhe north-south novement begins to taper off in
the industrial district of orli and Parel in the center of the island

1/ For rip distribution see Table 6.3.

2/ Fo: distribution of trips by hour of day see Table 6.6.

(district 6) but it is still substantial at the extremities of the subur-
ban lines. About 300,000 workers travel to the Fort area (the central
business district) every dav, more than 200,000 arriving by rail at Church-
g,ate or Victoria terminals (Table 3.4, Col. 7). From here most go on by
foot, since the distances are not great. The Fort aree contains the offices
of the state and municipal governments and many branchts of the central
government, the Reserve Bank of India and many commercial banks, and
the h2ad offices of numerous large business firms or public enterprises.
Most of it is within one kilometer of the terminals; the great majority
of those who walk from the *erminals spend less than ten minutes doing so.

24. Some, however, continue by bus, especially to Colaba, the southern

tip of the island.1/ They are not many, because there is not much employment
in this area at present. This, however, is changing and will continue to do
so if the most controversial project in Bombay continues. This is the re-
clamation of Backbay, a large body of water already partly enclosed. If this
project goes ahead and the land is sold for commrercial development, tnaybe an-
other 150,000 jobs will be created there by 1981, increasing not only the load
on rail transportation to the two terminals but or. road transportation from
there on.2/

25. It is perhaps for t'his reason that the Traffic Cell concerned it-
self particularly with traffic arriving in the Fort area and continuing
south, at some expense to the treatment of other traffic conditions through-
out Bombay. There is however another reason. There are really two differ-
ent, though related, problems connected with the flow of traffic up and down
the island. One is the capacity of the railway and bus services to cope
with the flow at peak hours, which appears - the evidence is not very strong
- to be at its maximum around Dadar in the industrial north of the island.
The total daily flow at about this latituJe, if we may call it that, is very
much greater than it is further south on the edge of the Fort area, as much
as 80% higher on the railways (Table 6.4). The difference, however, may
be less at peak hours, although the information on this is not clear.
It would appear that about 120,000 people travel south on the railways
during the peak hour, but at the two terminals the number is down to 80,000
(Table 6.7). These 80,000 people however give rise to the second problem,
since they all get out at the two terminal stations. Those that do not
try to board a bus at this time interfere with the buses and other traffic
as pedes:rians. In other words there is a dispersal problem.

26. The Railway Board, a central body, has commissioned further studies
on both these problems, entrusting the work to a specially constituted body
known as the Metropolitan Transport Project (not to be conh-ised with the
Metropolitan Transport Team). As in considering the capacity problemn, the

1/ Colaba, incidentally, was served by a direct rail link at one time; it

was replaced by a road in 1933.

2/ If all the occupants of the jobs came by rail, they would need 50 ;rain-
loads-even at the peak density.
 - 12 -

HrP has accepted the forecast of future traffic prepared by the Yraffic Cell,
it is necessary to examine these projections and their underlying assum?tions.
In making its study the Traffic Cell, following the Wilbur Smith report, es-
tablished a series of "screen lines" crossing the island east to west in order
to identify the number of people crossing these lines every day. The impor-
tant screen lines for our purpose4 are screen line No. 1 which divides Colaba
from the Fort, screen line No. 2 which divides the Fort from the rest of the
island, screen line No. 7 which divides the island from the suburbs, and
screen line No. 8 which is to the north of the suburbs.1/ In 1968 the aver-
age trip, according to the Traffic Cell's estimates, crosses two screen lines;
in 1981 they estimate that the average trip would cross three screen lines.
This means thac the incremental trips added between these two yearc vould
cross an average of 'ive screen lines (Table 6.5). Many trips, including all
those which take place entirely within the suburbs, do not cross a screen
line at all and therefore count zero. 2 / If we make an off-the-cuff assumption
that 30% of all trips do not cross a screen line, the remainder of these
incremental trips must cross seven screen lines, i.e. they must all come
from the suburbs :,r even further out and go all the way down to the Fort
area or Colaba.

27. One may juggle with these figure. as one likes but the fact re-
mains that the vast majority of the incremental trips, according to this
forecast, come from outside Bombay city and cross the entire island. This
is almost too much to believe, even if one accepts, as the Traffic Cell
had to accept, the assumption that a very large number of jobs would be
created by 1981 as a result of the reclamation of Backbay. Ho' much of
the forecast increase in north-south traffic is due to some quirk in the
projection and how much t' this assumption about the Backbay is not clear.
In any case it is the Backbay which is largely responsible.

28. The Traffic Cell in their report threw out some pretty broad
hints about the unsatisfactory consequences of their projections for the
city's developm.ent. At that time of course, the report of the Metropol-
itan Rzgional Planning Board had not yet been prepared. Its report went
a great deal further and listed among the major policy decisions needed,
first, in general, that noth bte aone to "perpetuate the north-touth
development trend" and, secon-ly, in particular, to abandon the Backbay

1/ The remaining screen lines of course fall between screen lines 2 and 7,
as shown on Map 2.

2/ Bus trips to a railhead for the purpose of catching a train are counted
as separate trips.
 - 13 -

reclamation project.i, They recomnended in the first instance giving

pricrity to the Bandra-Kurla reclamation, a project at the southern end
of Salsette Island wh1ch as been on the books for some time. Ultimate-
ly, thev recommended shifting as much of the office developmeiLt from the
present central business district to the proposed twin city. The MTP
project on the other hand, appears to be u-nder the constraint of planning
on the assumption that tnh Backbay project would continue.

29. This was not the only constraint under which the MTP appears to
have operated. Another was the use of main lines into Bombay. Each rail-
way leading into Bombay has two pairs of tracks running down the middle of
the island, one pair being primarily for suburban traffic and the other for
main line traffic; the Central, in addition, has a purely suburban line along
the east side of the island known as the Harbor Branch.2/ Thus there are
five pairs of tracks running down the island. At present, some suburban
traffic rur% on the main lines but the constraint was imposed upon the MTP
that no further suburban traffic should run on these two pairs of main lines
in 1981, dcspite the fact that only a dozen or so passenger trains run during
the peak hours (9-11 a.m. and 5-7 p.m.).I/

30. A third constraint was to confine the actual use of the paEsenger
cars to their "marked capacity"; the latter is 1,750 passengers per 9-car
rake, which is the normal train. Present conditions, where the actual num-
ber of passengers on a train may exceed 3,000, are regarded as intolerable.
However, this constraint goes rather far in the opposite direction .ince it
allows something like tiree and a half square feet per standing passenger.
This is better than the conditions endured by commuters in other cities.4/
Moreover, much space is given over to seats.

1/ They have not bcen the only ones to raise this sort of question. For
example, the following extract from "Work, Wages e-d Well-being in an
Indian Metropolis" by D.T. Lakdawala and others, 1963:

"In this connection attention may be drawn to the extension

of the already existing sites or erection of new ones, under-
taken or completed in the recent past by the various govern-
mental agencies in the already concentrated areas of Fort and
Colaba. This is bound to have given a further twist in the
wroaLg direction and worsen the problem of transportation in
a city like Bomliy where the traffic is mostly in one direction.
The question might be asked whether it were not possible to
develop an alternative site by pooling together the resources
of all these agencies. As however, the amounts already ccm--
mitted are substantial, for some time to come at least, the
opportunity of dispersal has been lost." (p. 703).
2/ There is also a spur from Kurla to the rrombay area, which is also
reported to be having capacity problems.
3/ There are 36 mainline paspenger trains arriving daily in Bombay and the
same number departirg. plus three in each direction weekly or biweekly.
4/ Trains in Tnkyo are reportea to be even more crowded than those in
Bombay at present.
 - 14 -

31. If oue were to abandon these constraints by allowing less relief

from present crowding, by turning over the main lines wholly to suburban
traffic on the island at least during the peak hours, and if one wLre to
introduce various improvements suggested by the MTP (signallirg, use of 12-
car rakes on the Central railway, etc.), one could - at consiH4erable expense,
but far less than for a subway - increase capacity to a poir where one could
carry about two and a half times the present number of peak-hour travelers
in the center of the island, or just about what the MTLP e-_timated the needs
would be even with the Backbay reclamation continuing. If one abandons that
constraint too, then there would be ample capacity for many years to come,
although not without certain costs. Some of these can readily be quantified,
for example the capital cost of introducing various operating improvements
on the present lines. Others are less easy, for example the added discom-
fort to the commuter of losing a square foot of standing space, or of re-
ducing his probability of getting a seat, or the inconvenience to the main
line railway trav?ler of arriving outside the center of the city, but still
at a point which is much closer in than most airports, including the one in
Bombay.

32. There are also the costs to be taken into account of forcing or,
alternatively, inducing organizations to move their offices to the south-
ern tip of the suburbs instead of the southern tip of the i3land. They
would suffer the loss for the time being of what are popularly known os
economies of agglomeration. That these econoamies exist is attested to by
the very high prices for land which are paid in the reclamation project.
prices which may reflect the benefits anybody occupying the land might ex-
pect to enjoy but not necessarily reflecting the costs which he may impose
on the urban economy, at least under present conditions.

33. That employers in the Fort area do impose considerable cost on

the urban economy seems t.o be beyond question even at present, without
contemplating the prospect of a subway. Very low season ticket fares are
available on a monthly basis; for example, a passenger from Borivli to
Churchgate pays a monthly rate of Rs. 10.60 for the whole month or, based
on 25 days and a 70-km round trip, about 0.6 paise per trip-kilometer; on
a quiarterty basis, the price is only five sixths of this. A rough calcula-
tion would suggest that this fare on a marginal train required only at the
peak hour, when most of the season ticket holders would be supposed to
travel, may be below the interest cost on rolling stock, let alone any other
 - 15 -

expense.1/ A far more searching analysis of costs involved in running

commuter traffic is needed. There are, as we shall see, also additional costs
involved in providing other public services.

34. It is only natural that with the cheap fares currently available,
.eople with jobs in the Fort area would tend to move further out, where land
prices are cheaper, than they would have done otherwise. The trade-off be-
tween the cost of living space and transportation is weighted further out
than it would be if economic costs of transportation were charged. That a
policy which tends to aggrave e this situation is even considered occurs be-
cause the cost of adding commuter services at low prices is borne by the
union government; the benefit from reclamation of land in the Backbay area
in fiscal terms accrues to the Maharashtra Government. However, all resour-
ces ultimat ly come out of the same pot and it is doubtful whether anybody
gains from such a policy in the end. The employer of course has no incen-
tive to change his ways because the low fares enable him to pay lower sala-
ries. Were railway fares to be raised, it is commonly believed there would
be violenc protest; there is no reason to think that this is not a reason-
able fear.

1/ Let us take as an example a marginal peak-hour train from Borivli to

Churchgate. Since it takes well over an hour with stops to travel the
35 kilometers to Churchgate in one direction, such a peak-hour train is
not usable outside the peak hour; or rather, thete are enough additional
trains available "or any non-peak-hour service. The cost of running the
train during the peak hour must be measured against the receipts during
the peak hour. If we adsume that a train from Borivli is packed with
3,000 passengers, which in fact it is not, and that they are all third-
class monthly season ticket holders (which ^s generov'3, as many would
have quarterly tickets), the receipts per month would be of the crder
of Rs. 32,000. To allow for the fact that there may be some higher
charges for first-class passengers, we c&n adjust this to, say, Rs.
36,000; that is, Rs. 4,000 per car in a 9-car rake. The annual re-
ceipts of that peak-hour run would thus be Rs. 48,000 or $6,600 per
car. At 10% interest, which is really too low a shadow price of capi-
tal, this would be the interest cost, but only the irterest cost, on a
ca.- costing $64,000. It might be possible to buy a *.ar such as is used
on the suburban lines for this price; certainly the price would not be
less. Thus, a peak-hour train may not even earn the interest on its
capital cost, l:t alone depreciation and running expenses. The econo-
mics of a trdin from a point somewhat nearer in, such as Bandra, might
be a little better since there is a possibility of running the samo
train twice; moreover, the fares for shorter distances are somewhat
higher per kilometer. The trend, however, is of ccurse in exactly the
opposite direction towards longer and longer peak-hour trips.
 - 16 -

35. If wages were raised to compensate for increased fares, there

would again be considerable inequity, because in fact not everybody travels
to work from long distances. Because of rent c itrol, a limited number of
employees can afford to live much nearer, which means of course that they
enjoy to some ex,tent at least an invisible rent. Raising Eheir wales would
just increase the rent they Žnjoy. Thus, the very distorted market, if one
could call it that, makes for the familiar results that resources are allo-
cated in a distorted way too.

36. Any increase in the flow of traffic to the Fort area would of
course aggravate the dispersal problem. While it is true that there is
some congestion as a result of the disorderly flow of pedestrians out of
the two main terminuses, there are cheaper solutions, at least at present,
than building subway lines further south in order to break up concentra-
tion at these two stations. For one thing, the walking distance for most
people is, as we have said before, not very great. Secondly, better dis-
cipline of pedestrians vno now overflow onto the street or cross against
the traffic could be enforced. Additional traffic lights would be help-
ful in this respect. If that is not enough at certain crossings, pedes-
tria.. overpassas or underpasses would certainly be a cheaper solution than
a subway. If the capacity of the sie.ewalks is not great enough under pres-
ent conditions, it may be necessary gradually to prohibit along certain
streets the vendors who now ':reat the sidewalks as the free good which it
no longer is. It is a sobering thought that the opportunity cost of per-
mitting the sidewalk sale of miscellaneous goods, which like as not may be
smuggled, is to put in an expensive underground subway system.1/

37. The road traffic itself Is aJso in need of greater discipline

and the segregation of parts of the larger intersections as bus loading
stations, much as is done at the Museum, might also help to improve the
flow of craffic. It might then be possible to put more buses on the
road if, as is alleged, the principal constraint on the number of buses
is the condition of traffic in the downtown area. Neither the BEST fleet
nor the number of passengers it cirried changed very nuch between 1962/63
and 1967/68, although there appe,rs to have been an increase of about 10%
per annum since (Table 6.2). T. so (and the evidence is not clear),
this is rather a remarkable f:.ct considering that feeder services in
the suburbs either have been or could have been growing during that time.
Prima facie there would appear to be a good case for additional investment
in buses or in traf"ic engineering to improve their use; in some ca.ses& new
in-vestment could be avoided by freer allocation of foreign exchange for
spare parts. Moreover, in the case of buses there is, in view of the
preporierance of short-distance traffic in the island, a strong case
for reducing the proportion of seated versus standing passengers.

1/ Most. if not all, of these remarks apply in some other parts of the
island as well.
38. Ill all, there are many minor improvements possible before onp
need resort to more expensive solutions. Perhaps, in the cour-e of time,
it might become desirable to continue the existir.g lines a little further
south and to link them so that they form a loop; this would permit faster
service. If the need slould arise, it i3 a fortunate accident that both
stations are adjacent to the Maidans (open areas) running almost due south.
Corst-uction on or under this open space would certainly be cheaper than
under existing buildings. If the use of a traditional open space such as
the Maidans appears little better tharn sacrilege, it might be pointed out
that reclamation of the Backbay could provide many times the open space
that now exists. Moreover, land in the reclamation area zould be reserved
for part of the extension. F 4 nallv, the question still remains as to whether
it is a good idea to induce traffic by improving the transportation service,
.hen prices are somewhat inflexible. The prospect might be a never-ending
series of capital expenditures to keep up with the demand and only temporary
improvement in service. Given the inflexibility of prices, the alternative
policy would be to accept a standArd of service which approximates more
closely the price .'hich is paid for it and does not involve such claims on
scarce r .ources.

39. No apologies are offered for the length cf this section on mass
transportation. Not only are the potential expenditures involved extreme-
ly large but certain morals can be drawn from the discussion. The first
is thaz, although any study 7rinvestigation must of necessity have ics
terms -f reference bounded in some. way, it reie-r.heless should be conduc-
ted under the aegis of a planning body with a broader perspective. Fur-
thermore, such a planniag body should have a continuous existence; so many
of the studies mentioned in this context have been carried out by organiza-
tions put together and then dissolved. Yet againi, where different levels
of government and different agencies thereof stand to gain or lose, at
least in the short run, from a particular course of action, they will na-
turally exert pressure to pursue that course or not, as the ctase may be,
without counting the cost or benefit to others. In this way, all may
stand to lose in t1he long run.

Movement of Freight

40. As in most cities, the movement of freight ia Bombay is less well

documented than the movement of people. What is needed is a sort of phy-
sical input-output table which would shuw the origin and destination of
goods entering or leaving Bombay, distirguishiag between those which merely
pass through ana those which are consumed or transformed in the region.
The facts about certain bulk commodities are reasonably clear. Finished
fertilizer is imported from overseas for direct consumption up-country,
while phosphate rock is transfarmed into phosphate fertilizer before it is
exported to agricultural areas. Clinker covaes In by sea from Gujarat for
manufacture into cement. Foodgrains have been an extremely heavy import,
but with higher production their importance ha, greatly fall.en off. With
the exception of oil, these are the main bulk commodities imported by sea.
There are three bulk commodities exported, all of which come from up-coun-
try without transformation in the Bombay area, namely sugar, oil cake and
 - 18 -

manganese orel/. Most oi the movement to or from the hinterland of bulk com-
modities is by rail to Bombay city but not necessarily directly to the port,
despite the existence of an extensive railway system along the docks owned
and operated separately by the Bombay Port Trust.

41. Bcmbay is the largest importer of oil in India. Tha oil is unloaded
at Butcher Island in the middle of the harbor from which it is piped to Tr-m-
bay, a large low-lying arsa of mud flats which juts out into the harbor at
the southeastern corner of Salsette Island; this is the location for oil
refineries, tb_ermal power plants, fertilizer factories, and the physical
plant of the Atomic Energy Department. A large proportion of the output of
thte il refineries leavcs Bombay, partly coastwise but mainly by rail, to
the hinterland of Maharashtra over the steep escarpments of the Ghats. For
the rest, not much is 'nown except in a qualitative sense. Obviously, a
good deal of food and some building materials such as timber comes in by
road to Bombay from the agricultural areas, as does raw cotton for the tex-
tile industries on the island. But there is a mass of traffic known in port
parlance as general cargo whose destination or origin may be identified as
BomBay for the purposes of port statistics, but in reality part of it goes
to or comes from the industrial area of Poona to the south, or as far away
as the Punjab to the north. There is also said to be a fair volume of traf-
fic by rail which comes down the Western railway from the north, is trans-
shipped onto the Central railway inside Bombay and then goes on to other
destinations to the south, such as Poona; similarly, the reverse movement
takes place.

42. A number of projects have been proposed in order to cheapen the

current movement. One is a railvay link between the Western and Central
railwsys on the mainland north of Bombay, for example between Bassein at
the western end to Diva at the eastern end, just west of Kalyan. 2 / This
would eliminate the haul of transit goods into Bombay, its transs7hipment
inside Bombay, and then the corresponding haul out again. A Recond proj-
ect, with somewhat the same objectivd, mong others, is the creation of a
satellite port across the harbor at Nha a-Sheva. In the first instance
at least, it would serve as a port for 'ulk commodities vhich are trans-
ported directly to or from the hinterland and as an industrial area for
the transformation of any such bulk toiodities; the proposed site fa.1s
within the area of the proposed tvin city. An advantage of the site is

1/ For port sta:tstics see Table 6.8.

2/ An alternative across the northern and of Salso tte Island has also
been suggested.
 - 19 -

that with a -!rtain amount of dredging, the satellite port would be deep-
er than the present one and would therefore admit larger and cheaper bulk
carriers. A question mark against the satellite port is the future of
the bulk traffic; sugar and manganese ore are both doubtful candidates as
export prospects, while fertilizer in the finished state should diminish
as an import in general and, with the development of other ports, may di-
minish still more through Bombay. Nhava-Sheva is also conceived of as a
--
ontainer port. W4hile the site has obvious advaittages for such traffic
co Pocna and the east, it has none over the underused port of Kandla in
Cujarat for traffic ro the north, as and when rail connections therefrom
are improved.

43. All traffic by road or by rail from Bombay in any direction,

cept due north, must cross the Chats. Construction of new capacity is -
pensive and at the present it is said that the capacity by rail will soc
be exhausted, despite the introduction of nore powerful locomotives. S: ice
oil bulks large in the traffic up the Ghats, the question of a-pipeline nas
been mooted; now that a third Ghat line is under consideration, such an al-
ternative has to be taken into account. There is moreover another element.
Whatever traffic crosses the Ghats from, say, Poona to Gujarat could in
theory take an alternative but longer route sp the plateau and round the
edgp of the Chats to the north; the difficulty with this is that the pricing
system on the railways makes it more expensive for tne shipper, though it is
not necessarily the case that it is more costly for the railways. If the
amount of traffic so concerned is substantial, a question which needs inves-
tigation, then the pricing policy itself needs reconsideration. It has to
be recognized that distance is not always an adequate proxy for cost.

44. Somewhat the same considerations appear to have intervened in the

proposal for a railway bridge across the southern end of Thana Creek which,
when linked up at either end to the existing lines, would have reduced con--
siderabLy the distance between Bombay city and Poona. A road bridge in the
same place is now nearing completion and some economies could have been
achieved by building a dual purpose structure.1/ Shorter distances, how-
ever, rnean lower freight rates and railway revenues wou'; have suffered, an-
other case of financial considerations beinr at odds with the economics of
the project. Ilow, the project has to be looked at in a new light, for if
the cut-off between the Western and the Ceatral lines is built and if traf-
fic which used to come through the port is shifted to the mainland and if
diversion of industry to the mainland continues, the volume of traffic which
might have crossed the bridge will be that much less. Thus, all these proj-
ects are inter-depend-nt. Moreover, they have to be weighed against improve-
ments also proposed on the main roads leading out of Bombay to Agra and to
Poona. Finally, no physical investment will save time so simply or so cheap-
ly as abolition of the octroi tax.2/

1/ The bridge waS also built with such little clearance that even the
country craft, which carry for example 3rave?. from the Uhlas river
into Bombay, must lower their mast in order to pass under it.

2/ See Chapter V.
 - 20 -

45. As with peoole, there is also a dispersal problem for freight in-
side Bon'l .y - and a difficult one. Immediately north of the Fort area is
the densely popula:ed and labyrinthine Bazaar area packed with wholesale
and retail shops of many kinds.l/ It is about level with the docks, presum-
ably for obvious historical reasons. Becween the two, however, there are
successive obstacle:t running north-south. Readirng, so to speak, from west
to east, first comes the harbor branch of the Central ratlway uith very few
crossings 2 /, the principal one b ng Carnac road. Next comes the strip oc-
cupied by the two main railway freightyards, Carnac Bunder for the Western
ratl-way and, further north, Wadi Bunder for the Central railway, and a large
number of godowns. Next comes one of the main roads leading out of Bombay
on thr east side of the island, P. D'Mello road. Almost adjacent to D'Mello
road is the Port Trust's own railway line which takes off from the other
lines mu,h further north. Finally, we come to the waterfront itself with
the docks at the southern end and various commercial or industrial establish-
ments further north. Much of the road traffic on the docks must, if
it first gets by the rolling stock of the Port Trust line, then hurdle,
if we may so put it, level crossings within the port area; then if it is
destined for the godowns or the railway freightyards on the other side of
D'Mello road, must overcome that obstacle. Traffic for the city itself has,
as pointed out, only lim'ited means of access.

46. The problem of achieving a suitab'e marriage between the lateral

and north-south flows of traffic is aggravated by the very confined nature
of the systef which allo;is little room for overpasses or underpasses.3/
Several partial solutions have been put forward. The Wilbur Smith proposal
for an Eastern Freeway was the r.ther expensive device of putting another
road on top of D'Mello road, at least for part of the way. The Port Con-
sultants have suggested replacing the port railway - or most of it - by a
road (they call it the Link road) as far north as Sewri. In fact, only a
small proportion of the port railway traffic is in the main dock area it-
self; the rest of it, the only profitable or nes-tly profitable part of !t,
is further north on land owned by the Port Trust but leased fnr other put-
poses, ir,cluding industry. 4 / Thirdly, the Rai'ways have in mind various
plans to shift- their freight t.:rminals further north. Obviously, all
these proposals must be consid-red as one. They at least provoke the re-
volutionary thought that one metropolitan railway authority might be bet-
ter than three, and that a unified ietropolitan tran3port planning body on
a continuing basis is also worth thinking about.

1/ Density is as high as 2000 per h?ctare in parts of this area with few,
if any, buildings higher than four stories.

2/ For a short distance out of Victoria Terminus this line runs adjacent
to the other Central railway lines.

31' Unfortunately, a great opportunity was missed when an ammunition ship

blew up and levelled much of the area during World War II.

4/ The Port Trust is as much a landowner as it is a port operator and de-

rives mu:ch of its revenue from real estate.
 - 21 -

Air T.-ansDort

47. Since the airlines carry very little freight and can scarcely be
considered as mass transportation, they do not conveniently fall in either
of the previous categories. Bombay has a single commercial airport at San-
ta Oruz, with a smaller Gne at Juhu of no commercial consequence nearby.
Santa Cruz is moderately well placed for the present downtown area and,
with the czmpletton of the Thana Creek bridge, will not be too badly placed
for the tviin city area. It would of course be extremely close to any de-
velopment that might take place at Bandra-Kurla.

48. Although traffic through S:nta Cruz has been growing fairly ra-
pidly, growth of aircraft movements has not been happening at nearly the
same rate, because of increasing aircraft size -::idpossibly of increasing
load factors. Santa Cruz poses na sorious congestion problems and, with
further increases in the size of aircraft, is not likely to for many years.
Two sorts of investment in the airport are contemplated. One which is under
way and close to completion is the strengthening of the runways and the pro-
vision of more maneuvering room in anticipation of larger aircraft in the
international service. The other, and more questionable one, is thr. con-
struction of a new apron and extended taxiways at a location earmarked for
a new international terminal complex. This investment does not appear to
be requirei in advance of the decision to construct a complex, which re-
quires the acquisition of some additional land and, in any case, fail3 to
take account of the very fortunate pattern of arrivals and departures from
Bombay. International flights take place for the most part between 1 and
5 a.m., and domestic flights between 6 a.m. and midnight. Ezten 4 ion of
the present terminal building, which is already taking place, should suf-
fice, if passenger handling facilities can be made sufficiently flexible
to accommodate to the type of traffic according to the time of the day.
Otherwise, there would be two terminals each of which is basically unutil-
ized part of the day.
 -m 22 -

nhAPTER III

PUBLIC UTILITIES

49. The three utility ser-vices, electric power, water and telecommuni-
cations required for industrial, commercial and residential purposes have a
number of cormnon characteristics. For water and pawer the supp.y conceptual-
ly can be divided into three successive steps: production, transmib:Kon and
distribution. Telecommunications obviously lacks centralized production,
but has transmission and distribution. Water supply cr.ies with it t'e ad-
ditional task of disposal of an effluent, but this too ay involve sin.ilar
conceptual steps, only in reverse order. There are economies of scale Ln
production and transmission, not only in the individual production rnits but
in the existence cf a supply network uhich m.akes for greater flexibilicy in
use, smaller standby requirements, and smaller increments in capacity in re-
lation to the existing supply capac'ty. On the other hand, as the scale of
demand grows, ouch cheap nearby sources of supply as may exist become ex-
hausted. Disttibution of all services, whose cost may easily be half the
total ccst, normally enjoys economies of density because of shorter connec-
tions per consumer supplied. But again there may ultimately be offs'etting
costs: increasing the capacity of an existing system in a densely built-up
area can become increasirgly expensive and can increase the risk of dieloca-
tion. For example, the higher the building, the greater the expenso of p-3p-
ing water to the top of it and the greater the number of people at risk from
the same supply point.

50. The existence of economies and diseconomies associated with urban

development has a bearing on the insti'tutional fra.nework and the form and
degree of coordination both within public utilities, among them, and with
other sectors of the urban economy. For production and trAnsmission there
are obvious advantages in having a single metropolitan regional authoritv,
or something closely akin to it. Progress in this direction in Bombay is
somewhat different as between power and water.

51. At present, there is a single high-voltage transmission system

operated jointly by the Xaharashtra State El2ctricity Board and the Tata
power companies with a common load dispatching center; this links produc-
tion units belonging to MSEB, Tata, the Railways and the Atomic Energy
Department. There is no strong evidence that this does not work reason-
ably well operationally. However, from a planning point of view there is
a seric.as problem ahead. According to the current official demand fore-
casts, which are likely to be revised upwards, Maharasbtra ns a whole may
expect to have a deficit of the order of 353 MW between maximum demand and
firm productive capacity by 1974/75. This deficit in part may be explained
by a lack of funds allocated for construction during the Fourth Plan. The
problem is likely to get even uore serious after the end of the Plan with
the deficit getting progressively worse unless some emergency measures are
taken. In all this, Greater Bombay, * ich consutmes three quarters of the
power in Maharashtra, will be the principal sufferer.
 - 23 -

52. One of the advantages enjoyed by Bonibay has been cheap power
base- to a substantial extent on hydroelectric scurces is the vicinit'.
Tn ese nave come to an end. Apart frc- interconnr.ecting transmissicn wit'
other states, the present construction program of the YFEB is largely based
or. thcrmal un4ts at Koradi .n the east of Maharashtra s4ted on coal fie'ds
containing coal of indiffc- ant quality. rne present ldea of the MSEB is .o
speed up the conmirsioning of two 303-MS units at this site, if funds are
aide available. However, units of this size have nut been made ir.India
hithertol/ and there are doubts as to whether the coal field, which is
not producing yet, can build up its supply quickly enough for the units
to be commissioned earlier. If these doubts prove justified it will entail
the transport of coal by rail frcm other coal fields to the site of the new
300-(.4 units in the interim. if railwav capacity c7ists, which has not yet
been ascertained. Finally, there is no Adequate transmission capacity to
carry the power from the new units 500 miles westward to Bomhay; construc-
tion of a planned E'.' transmission line has been delayed, pending a de^isi^n
as to whether it should he at 400 or 500 kv.

53. The imperling shortage is most seriouslv one of total firm capac-
it-7 at time of svstem peak demand. This raises two points, one concerning
the type and location of units used, rhe second concerning pricirg policy.
'One way to increase total capacity is to irstall gas turbines, whirh can
be done quickly. Another way is for Tata to put itia new conventional steam
oil-fired generation unit at their existing power plant in TroBbay; i- vould
seem that this can be done faster than su?plying addit!4nal conventional
steam generating capacity elsewhere. Besides the cooparativz cconomics of
these rtun alteraatives, both would depend or. importing fuel, sh,:c; is con-
trary to presenc nat'cnal policy. Furthermore, one of the solutions wVuld
iii-nolve the political difficulty :f expanding private electric power capac-
ity, since Tata's license runs out in 1M80 and it has not been the policy
of government lately to permit .any expanrson of their capacity. As to the
second point, the pricing system fcr ei.ectricity usage . p esent contains
no penalty for consumption of energy at peak hours. Irbdusti al users, who
are ty far the heaviest users, pay according to a two-paMt tariff2/ but
there is no specific incentive for them to avoid che system peak hours for
energ- consumptton.

54. The difficulties just described indilcate how far the problems of
Bombay reach out not only to the state, but also to the national level.
ResolutioL of these problems in a satisfactory way would only be possible
with adequate consideration of the appropriate "shadcw" prices for capital
and foreign exchange. It would not appear, however, that the Bombay region,
which is in any case not a functioning entity, has a choice of obtaining

1/ The i0morting o' eauipment for electric power aysrems into India is
a'most invariably prohibited by the Government o' T.ni'a.

2/ Which makes a charge for the maximum demand made on the system sep-
arate'v frim the electrical energy consumed.
 - 24 -

the power it apparently will need by paying an appropriate premium. That

the interesEs of the Bombay region need some forum of expression is evid-
enced by the fact that the Regional Planning Board in its report foresaw
no electricity shortage and referred only to the nz-od to step up the rural
electrification program.

C5. Distribution of power in Bombay is carried out 'Jv the BEST in the
island, bv Bombay Suburban Electric and Thar. Electric, tw-, private com-
panies until recently managed jointly, in the suburbs and in Thana, ar.d by
MSEB in other urban areas in the region. Tata also supplies power to the
large industrial users in Greater Bombay, while both Trta and NSEB do so
outside Bombay. If these arrangements lead to duplication of distribution
lines, there might be some case for changing them. It is worth noting that
the sub-transmission 5ystem in downtown Bombay was originally designed with
a sufficient margin of technical safety to enable it to be uprated from
workir.g at 6.6 kv to 11 kv. There is, thus, not much cost involved in in-
creasing its capacity.

56. The water supply ricture is a good deal less straightforward. In

theory, municipal corporations such as t'f.e BMC, which is much the largest
cor.sumer in the area, are responsibla fL-: construction and operation of
their cwn systems; they get no finarcial assistance. The state, through
its Public Health Engin.ering Department, constructs and gives liberal fi-
nancial help to smaller raunicipaliti.!s which usually buL t-nt always take
over operation and maintenance of th,! system. In practice, what is gra-
dually emerging In the metropolitan region is two separate major systems (see
Map 3). The first is the BSC system which is based on dams to the northeast
on the Valta7na and Tansa rivers; some of these dams have been or are
being built a-d operated by the. State Irrigation and Power Dtnartment. The
water is carried by pipeline into Bombay from the northeast, bypassing
the industrial towns and estates to the south .f the Uhlas iver, which
are supplied at the moment by a series of small schemes, most of which
are operated by the MIDC. The latter, as a promoter of its industrial
estates, has emerged as a major water supply agency. Its latest project
now under ccr:struction on" the Rarvi river will have a very large cap<city,
sufficient to supply presently fo-eseen needs of the industrial estates
and towns south of the Uhlas river with a fair amount left over for any
development in the twin city. An integrated transmiss-on system is under
active consideration for the whole area of the mainland south of the
Uhlas river; this would make the second system.

57. The emergence of these two major systems, which may one day be
unified, has however bran preceded and still is, for that matter, by rather
less orderly developm.nt; in this. Bombay has been the chief victim. Bombay's
water supply has been static for a number of years with the consequence
that per capita consumption has been going down; taking into account losses
in the distribution svstem of as much al 40%, it is of the order of 20 im-
perial gallons a day per head. Water ii only available 2 to 6 hours a day.
To meet the shortage the BMC started or. a project known as Upper Vaitarna
 - 25 -

in 1963, a multipurpose project. 1/ For various reasons, including lack of

financial resources, this has proceeded veryfslowly and will only be ccLu--
pletely finished in 1972. Consultants to the government proposed the Barvi
dam as the cheapest means of providing the next source for Bombay, with the
additional benefit that .he Lgansmission system coming in from the east coul
serve not only Bombay but the industrial estates and towns that it is now
intended for. Thus there would be the beginnings of a unified system. In-
stead, the state government have started construction of a third dam, the
Shatsa-, which will also bring water from the northeast. 2/ This would ap-
p-ir to be a clear case when savings could have been realized by a different
phasing of increments to a unified system and such cases are likely to occur
again in the future.

58. Since Bombay faces very large expenditure for the repair and
strengthening of its antiquated distribution system and for the construc-
tion of additional scwage disposal facilities, some attention needb co be
given to the pricing system as BMC does not appear to earn a re-asonable
return on the capital invested. Water for residential purposes appears to
be subsidized; this may not be true for bulk supply to industrial concerns,
which are charged a higher rate. This is the exact opposite of electricitv
pricing, where industry is favored by low rates, while residential users
not only pay higher rates but are also _harged a higher electricity duty
levied by the state; BEST in fact sup-.orts the bus service with the profit
from its electricity distribution. haybe the rationale is an indirect form
of income redistribution; consumers of electricity are generally speaking
in a higher income bracket than those of water. If so, it is open to
question on certain s?ecific grounds. In the first place. oare could put
more faith in such an argument if in fact there was an adeq te water sup-
ply. Secondly, electricity is priced according to a block t - ff (if one
includes the duty), according to which residential consumers who consume
large quantities of electricity and can be presumed to have higher incomes,
pay a decreasing marginal price. Finally, whatever redistribution there is
escapes the stratum of society which has neither housing nor water nor
electricity.

59. Telecommunications are controlled by the central Posts and Tele-

graph Department (P & T); each state has a dependent local organization,
but large cities such as Bombay have a special district of their own. In-
vestment in the sector is given a low priority in central plans. The growth

1/ It is perhaps worth alluding to another case for proper shadow pricing

of foreign exchange. The pipelines from the Upper Vaitarna project
contain valves which are smaller capacity (48 ir.ch diameter) than the
pipeline itself (108 inch diamtter). This is because there are no such
valves made in India and importation was not permitted.

2! It is this project which has been under negotiations with the IDA for
a long time and for which it has been so difficult to find a solution
to the so-called additionality problem.
 - _6 -

rate of telephones in the Bombay district is a shade over 10% per year; there
is a waiting list under the "Own-Your-Telephone" (OYT) scheme, under which
an apolicant must make a capital contribution of Rs.3,000, amounting to one
third the present number of installations. The number of frustrated applicants
outside or possibly inside this scheme is unknown. The waiting list is ex-
pected to grow very substantially during the Fourth Pl-n.

60. Bombay Telephones has an enviable financial record by almost any

standards. With gross assets of Rs. 40 crores, it has expenditure of Rs.
5.5 crores and revenues of Rs. 15.5 crores, i.e. a surplus of about Rs. 10
crores.1/ One can hardly complain about the pricing in this instance; it
is the level of investment which should be questioned. At the present lev-
el, the number of calls per line leads to frequent overloading of exchanges
and switchboards and, consequently, a lcw level of service.

61. Given the remarkable rate of return on investment and thus accrual
to the fiscai resources of the economy, the clear signals of pent-up demand
and the inefficiencies resulting from the present level of investment, it is
hard to see what motivates the present policy except possibly for one thing:
the general feeling that telephones and similar services, requiring copper
which has to be imported, are an out and out luxury in as poor a country as
India. While understandable, this feellng needs some examinatiun. Bombay
has some three telephones r' r 100 inhsbitants, which is internationally low
but much higher than the indian average. Telephones, however, are considered
to have a high income elasticity of demand (possibly 1.5 or more); given
the difference in income levels between Bombay and the Indian average, a
substantial difference in the rate of celephone installation is to be ex-
pected. What is perhaps more to the point is the queotiou whether tolephone
coumunication is a luxury consumption good or an essential complement in the
production of goods and services. While there may be some elements of the
former, there is a good case to be made for putting much more emphasis on
the latter. As it is, there ere rather different attitudes to the pricing
or supply of utility services to industry in Bombay. Relative to residen-
tial prices, electricity is favorably priced, while the opposite is true of
water; the price and even more the supply of telecommunication services is
highly restrictive. In any event, Bombay as an entity has no say in where
the 'rade-off should take place.

1/ On a cash basis; it is hard to believe that the record would not be

good on a proper accounting basis.
 - 27 -

CHAPTER IV

LMND USE, HOUSI'C- AIND THE URBAN PRICE MECHANISM

Housine

62. The Regional Planning Board put the number of tenements (housing
units) required up till 1981 at about three quarters of a million at a cost
of Rs.845 crores including land, conservatively estimated. Thia figure is
presumably made up partly from the need of the increment in population and
partly from an existing "deficit". Just how it was made up is not toa re-
levant since both the quantity and the cost are plainly out of reach. The
number of housing units built in Greater Bombay in recent years has not ex-
ceeded 30,000 per annum.

63. A half or more of the housing units have been built in a sense
by the private sector. A number have been luxury apartments for the well-
to-do. Others, catering to a lower but still relatively high income group,
have been built by cooperative societies for their members; these societies
receive financial assistance from the state. Because of the scarcity of
land and the high prices, cooperative societies have bLen buying land and
building osn it on the outskirts of Bombay. For the mass of the people, how-
ever, no private housing market can really be said to exist.

64. The principal reasons for the shortage is the all-pervasive rent
control, which in Bombay has been in force for over twenty years. The ef-
fecte are familiar. As in most such cases, the iron law of deterioration
until the service received from renting the property approximates the rent
charged operates. Landlords are not permitted to demolish buildings; they
must fall down first of their own accord, and there is little incentive to
arrest this process.l/ Since people enjoy an invisible differential income
between the rent they pay and the services they obtain from the build-
ing, they hang on to their rights, even to the extent of locking up the
space they occupy for long periods if they happen to go away. Anyone who
wants living space, unless he is lucky enough to obtain public housing,
must pay pagri (key money) or sublet from a sitting tenant or find ac-
commodating relatives or members of lhis community. Some employers, public
and private, voluntarily provide captive housing for their employees but
they, like everybody else, are influenced by the price of land which goes
do.-n as one goes out.

65. The principal public agency in the housing business is ti.s Maha-
rashtra State Housing Board which is permitted to acquire land ownecd by the

1/ In 1969 the State Building Repairs and Reconstruction Board was set up
to make repairs on dilapidated houses; it is financed by a cess on
residential property.
 - 28 -

government, principally in the suburbs, at prices prevailing on January 1,

1948. It -apes to sell attractive parcels of this land for commercial
purpc;es and uses the proceeds to build housing on a substantial scale.
Most of this housing is subsidized, in addition to the subsidy implied
by the acquisition price of the land. Subsidies are extended for industrial
housing and for the so-cLlled "economically weaker sections". The Re3ional
Planning Board estimated that the latter Croup as presently defined would
be approximately the same as those who do not pay income tax at present,
that is, about three quarters of the population. Allocations under the
FcrL'rth Plan for the whole of the state for these two classes of housing
amount to somc 9,000 units, but the Housing Board apparently has more
ambitious plans than this modest goal would imply.

66. If conceived in present terms and with present standards, the

housing situation is plainly unmanageable. The Regional Planning Board
recognized the impossibility of maintaining the traditional standards for
houslng and the traditional means of providing them. They made a number or
sensible recommendations in facing this fact realistically. These include
greater emphasis on "the provision of environmental hygiene for housing
colonies" of the cheapest type, and self-help in construction; much great-
er incentive for the flow of private capital into housing, including some
exemptions from the operation of the Rent Act and various tax incentives;
amd simple measures for the improvement of existing sliums "with minimum
dislocation of the families". They also made the telling point that in
eastern Maharashtra new housing units built since 1951 had been exempted
from the rent control. As a consequence, the housing situation in Nagpur
was considerably better than in either Bombay or Poona.

67. One of the most difficult problems in Bombay is the existence of

the so-called hutment colonies, whose inhabitants are in fact squatters,
frequently on government land. The land '8 often lowlying and swampy. A
recent enumeration counted aver 100,000 hutinents of this type with more
than 600,000 inhaultants, but this number does not iaclude those who do not
occupy even this kind of regular accommodation. Between them, the hutment
colonies share some 1,350 toilets and fewer than 500 water taps. While it
is encouraging to see the advocacy of site-and-service plan3 for these
colonies, it is going to be quite difficult to introduce these improvements
with the colonies already built. CIDCO, which has the same sort of plans
in mind, will have an easier task irn the twin city.

68. One must however take issue with the Planning Board on their sug-
gestion that measures be taken to ensure "that land values do not cross the
maximum level at which the land ceases to be suitable for low-income hous-
ing". One cannot stop land values increasing, if by value one neans value
of the land in its most efficient IV one tries to stop the price in-
creasing by artificial restriction. hich rarely work, one only succo!eds in
distorting the market and disguisii he value.

The Urban Price Mechanism

69. The reclamat:itn of Backbay is often regarded as the principal, if

not the sole, villain in promoting the growing congestion in downtown Bombay
 - 29 -

and on the modes of tranar)ortation leading to it. But, as pointed out ear-
lier, it is not the reclamation per se that is at fault but a price system
which does not fully reflect costs - or may hardly do so at all. Like most
other cities, Bombay suffers from a price system which is distorted in a
varilety of ways.

70. It is generally maintained that the clustering of businesses,

financial institutions, and government offices in downtovi. Bombay is ex-
plained by the so-called economies of agglomeration, a concept which,
though ill-defined, ne ertheless appears to have some content. If, how-
ever, employers and reslients of the area do derive substantial benefit
from their location, thkn it should have been possible to extract some
of this benefit in the way of revenue in order to finance the services
required. While it may be true that the economies of agglomeration ex-
ist, several things may have happened to exaggerate them. In the first
place, the diseconomies which also patently exist are not reflected in
prices that people pav for services, especially transportationi and rent.
Secondly, the advantages of decentralization cannot be realized, as long
as essential ingredients are missing; the restrictive attitude towards
telecommunications, an important adjunct of decentralization, may well
be an example. The long waiting list for telephones and the high pre-
mium that people pay for additional lines suggest that this profitable
service Is no luxury.1/ Finally, traditional occupants of sites in the
downtown area ma, continue there simply from Inertia, because the oppor-
tunity cost of not selling their site and moving elsew1here has not been
counted.

71. The ideal would be to have a system of prices, including land

values, rent, transportation fares and wages, which would reflect not only
the economies of agglomeration but the diseconomies which arise largely be-
cause of the heavy peak demand on the transportation system in a densely
built-up area. In such a market, employers to whim the economies were
particularly important would choose to cluster together but, by definition,
the benefits would be sufficiently great that they could afford to pay ade-
quate -ages to their lower grade employees 'o compensate for the particular
costs that it might impose on them. Alternatively, they could decentralize
some piarts of their operations. There is an evident parallel in the move-
ment of industry to the suburbs, to Thana and a2 far away as Kalyan. A
number of industrialists have set up plants in these outlying areas and
in a number of cases have built housing for their employees in the vicinity,
the advantages of which 3xro said to be greater contentment and less ab-
senteeism.

1/ The telephone servLce at, for example, Indian Airlines is so overloaded

that even another airline would not consider it worthwhile making a
call till after 6 o'clock in the evening.
 --30 -

72. The Maharashtra Government has succeeded quite well in preventing

the 4rowth of industry inside the citv of Bombay, or at any rate the growth
of industrial employment. Thie latter has not changed much in the last de-
cade and, as far as one can gather, has tended to fall recentlv rather than
grow. This has been accomplished partlv by prohihitionl/ and partly bv in-
centive- to move elsewhere. One may raise the question why the same effort
has not been put into achieving similar results in the case of office em-
ployment whiclh probably aggravates the transportation problem more, since
it is more .:nse. Perhaps it is because it is normal to think of industry
as betng capitnl-intensive or labor-intensive, but the distinction is not
often milde in the case of commercial or financial establishments. Yet, in
terms of human capitaL as well as ph;isIcal, the distinction is still valid.
Decentralization of the labor-intensivt. parts of an operation may be just as
valid a solution as in the case of industry. In both cases, the option re-
mains open to maintain a small headquarters staff in the place where it
matters. Such a solution has apparently been adopted bv one insurance firm
before nationalization.

73. Given a price syst.-m free of distortions, decisions on new loca-

tion and the as yet unmade decisions on relocation would be verv different
from what they are today. 'loreover, it would not only be the private em-
ployer who would be making his decisions somewhat differently. Bombay -
and it is hardly an exception in this - is very far from such a system, but
to suggest that all subsidics and constrols can be abandoned in one fell
swoop would be irresponsible. To suggest that one move selectively and
judiciously toward the ideal rather than away from it is another thing entire-
ly. To redress the present imbalance, a combination can be envisaged of a
movement of employment opportunities to where the people are and of housing
to where the jobs are, buit probablv less of the latter. Furthermore, both
incentives and penalties cnn be contemplated to move things in this direc-
tion.

74. Given whac we know about the transnortation patti-n - and it is

by no means enough - the Fort area is not the sole cat.se of Bombay's pro-
blems in the field of transportation or water supply. iThile it might be
a good place to start, the problems are islaridwide. If railway fares can
onlv be rationalized gradually, the next best thing to co is to find some
interim pcoxy. Feasible, though imperfect, alternatives are rents and the
imposition of property taxes which are more closely related to location.
Rent control could be progressivelv derestricted in the area in order to
bring this about. As in Nagpur, rents on new properties could be deres-
tricted immediately. Progressive steps might be taken to derestrict com-
mercial property. On residen;tial property, where there may be mor2 se-
rious social inhibitions, it might he worth considering tt-,. intrrduction
of legislation setting maximum compensation for tenants who have their in-
visitbl! "rights" taken away. It would be unwise to exclude new commercial

1/ Except for certain exemptions for "small-scale" industry.

 - 31 -

development altogether, but, as a temporary measure, such new development

might carry with it certain obligations.l/

75. Reform is necessary in the imposition of property taxes on vacant

or underutilized land. In some cases, at present, they are derisory. Y.ilq
would of course give an incentive to develop such land which might be con-
sidered perverse in effect; not, however, if the development carried with
it the obligation to invest in housing, directly or indirectly.

76. One instrument wbich is used in determining land use in Bombay is

the loor Space Index (FSI); thls is the ratio between the floor space of a
building constructed on a lot and the superficial area of the lot itself.
The permitted ratio in the Backbay runs from 3.5 to 4.5; the maximum falls
as onc moves out into the suburbs. The FSI can be a useful tool for regulat-
ins tie density and character of particular blocks of land in order to obtain
certain benefits that would otherwise be lost ("externalities"). But in this
case it has resulted in a perverse regulatory system. It restricts freedom
of choice and restricts it in favor of construction in the downtown area.
Whoever mighit see advantage in bringing employment to the suburbs, at least
indirectly, by constructing buildings with a higher PSI than now permitted
simply cannot do so. It is impossible of course to say how much development
of subcenters of employment around, for example, suburban railway stations
has thereby been stifled. Reform of the present restrictions on the FSI
might well provide an incentive to decentralize, particularly if it was
coupled with development of sites such as Bandra-Kurla and, at the appro-
priate time, in the twin city itself.

Land Use Plans

77. To-mn planning in Maharashtra is governed by the Regional and Town

Planning Act of 1966 which replaces certain earlier measures. Under this
Act, town planning schemes have been or are being prepared for a large num-
ber of towns in the state, including Bombay. As the name of the Act would
imply, the development plans prepared under it have mainly as their object-
ive the zoning of land in order to control its use for different purposes
and the acquisition of land for certain basic amenities, such as open spaces.
Once accepted, the plans have a currency of ten years. Generally speaking,
these plans have the traditional town planning defect that they are short
on economic content and are not usually associated with a financial program
leading to their realization. Land use restrictions in Bonbay itself would
still permit a population of ten million. if exploited to the limit. There

1/ -or example, the provision of some proportionate investment in housing

on the island. The form of the housing and the income level at which
it was aimed could be left open. While it is true that this might in
the first instance lead to a rash of luxury apartment buildings, the
market for such a commodity is not insatigble. Moreover, those who ac-
cupy them are going to leave other buildings and there would be the
usual trickle-clown effect.
 - 32 -

is no re-.l -.alysis in the Bombay plan issued in 1964 as to how to cope

with the t -nsportation needs of such a population; moreover, there are ccr-
tain elem,ents i.< the plan which are open to serious question.

78. Control of land use has obvious advantages if its principal ob-
Jective is to realize the external economies and benefits which go with
the segregation and appropriate siting of different areas for different
uses such as industrial. Ten years, however, is a long time in which LG
foresee the course of economic development in general, let alone ite. loca-
tion. It would be wise to have some provision for earlier modification,
if it should so appear that economic forces are tending to run counter to
the original conception. The Metropolitan Regional Plan, which covers a
very wide area, ought to be no exception in this respect. Industrial re-
quirements for land, which include not only their immediate needs for a
site but also provision for expansion, should not be unduly hampered; it
should not be difficult to contain the holding of such land purely for the
purpose of reaping speculative gains by limiting the option to a particular
period. It would be a pity if the efforts to develop the hinterland,
which has one ample resource in the form of land, were to be unduly restrict-
ed in its usa.1 / It is easy to criticize urban sprawl but it does not
take place for no reason at all. The important thing is to gauge whether
it takes place in response to real economic pressures, in which case it
would be as well to be aware of them, or in response to distortions in the
price machanism, in which case it may be necessary to contrnl it and to see
what steps can be taken to eliminate the distortions.

1/ This is not of course to say that control of pollutioi and similar

diseconomiea should be ltx. In fact, there is a case for suggesting
that stronger control is needed. Some of the MIDC estates have not
been too well sited from this point of view.
 - 33 -

CHAPTER V

lHE FUTURE OF THE REGION

The Fiscal Position o' Greater Bombay

79. It is remarkable that in the report of the Metropolitan Regional

Board the fiscal position of its foremost entity the BMC was not mentioned
at all. It is impossible to conct've of any plan being carried oit without
considering the means to do so. Like many cities Bombay is in a weak fi-
nancial position. In 1969/70 current and capital expenditure amounted to
Rs. 43.0 and Rs. 9.5 crores respectively. The Municipal Corporation is an
elected body wit.h a city manager, known as the Municipal Commissioner, ap-
pointed by the state. Its principal responsibilities are water supply and
sewage disposal, primary education, and the maintenance and improvement of
streets, playgrounds and similar amenities. It carries out very little
in the way of housing or slum clearance. Through its subsidiary corpor-
ation, BEST, it runs the bus service and electricity distribution.

SO. The greater part of capital expenditure for :ervices for which
it is responsible has to be financed by borrowing, which is limited as to
amour. and ter,ns, by the allocations made by the Reserve Bank of India to
all public borrowing entities in India. If it could borrow more, it is
doubtful whether the debt servicing capacity of the Corporation would per-
mit it to any large extent. The principal sources of current revenue are
the property tax and the octroi. In addition, there are various surcharges
- or what amounts to that - on the property tax Identified with particular
services such as sewage disposal, but in practice bearing little economic
relation to them. Typically, Bombay has suffered from ero ilion of its tax
base. This has happened for several reasons. Mention has already been
made of the inadequate taxation of vacant land. More important is the ef-
fect of rent control in reducing the taxable valuation of property from
what it wou]d have been otherwise and holding it constant. Finally, var-
ious types of government-owned land are partially exempt from taxation.
Rectification of these deficiencies is needed in order to at least partial-
ly restore the financial independence of the city.

81. The octroi tax has repeatedly been assailed as obsolete in India,
but Maharashtra at least has not yet replaced it by an altetnative. T£he
tax is uncertain in effect, it may be regressive and it is open to corti-
tion. But, principally, oayment of the tax wastes time. It is ironic that
trucks can save time on the two suhurban expressways, only to lose it again,
at least in one direction, at the octroi stations. Reform has been held up
by failure to agree on some suitable revenue sharing formula for the small
towns and large cities. Pending such agreement, Bombay should be regarded
as a special case and the octroi replaced by a state sales tax, or something
of that kind, with the Municipal Corporation having the option of adding a
surcharge if they so wish. This would have the advantage of unified col-
lection. Somewhat the same advantage could be obtained by replacement of
 - 34 -

the local vehicle tax, the wheel tax, by merging it with the state vehicle
tax. Not only would there be savings in cost of collection, but undoubted-
lv collections would be improved.

82. o imp.-ove the fiscal re-

Cha -es of this kind should go some way -.
sources of Greater Bombay and, equally to the point, impruve their elasti-
city in relation to the growth of u:ban income. This should lead to some
improvement in the services for whl h the Corporation is responsible, but
when all is said and done, there are many things over which the Corporation
has virtually no control. In a number of vital sectors decisions on allo-
cations and policy are made at the center, either directly or indirectly
thr7ough its alloc,itions to the state. It may be difficult at the center
to discern in these broad allocations their local effect after these allo-
cations have been subdivided between rural and urban areas and then again
among cities. Sectoral imbalances are liable to appear locally, but they
can only be seen locally. We return to this problem towards the end of
this chapter.

The Twin Citv

83. The twin city is a bold idea which has captured many people's
iruagination. The notion of starting again on green fields and of design-
ing a city from scratch vithout the overburden of the past laid on it is
an appealing one. But the temptation to regard it as a panacea will have
to be resisted. One cannot turn one's back on Bombay; its prohlems will
still be there. In the short run, at any rate, the twin city may well ag-
gravate them for one very simple reason, competition for scarce resources.
The initial cost of land acquisition will be heavy, about Rs.100 crores in
the first five y.ars. Recoupment from sale of this land after all the ne-
cessary services have been laid out will mainly t&ke place later. Despite
the advantages of catching the increment in value in the fiscal net, the
breakeven point will be some time coming. 1/ There is thus a problem of
timing. One can also perhaps point to two other issues, location and func-
tion.

84. The notified area embraces the entire eastern littoral of Bombay
harbor from Trans-Thana to Uran; it includes the proposed new harbor at
Nhava-Sheva. The proposed city center near Panvel is at the southern foot
of the Parsik Hills, the ridge around which must pass both the new road to
Poona continuing from the Thana Creek bridge and any sirnilsr railway exten-
sion which may be built. Since both of these are arterial interciLy routes,
it would not be wise to burden them with local traffic more than necessary.
The proposed site lies very much off the beaten track of existing intracity

1/ The case for external financing of urban land acquisition should not be
dismissed out of hand. While the process involves only a transfer of
assets from the private to the public sector, it can be argued that this
process is likely to involve national dissauing at one date, followed
somewhat later by a corresponding or perhaps even greater saving.
 - 35 -

or intrareiional transnort infrastructure; yet it appears to make little use

of what there is. W4hen the new road is built to Poona, the stretch of the
old one from Panvel up to Thana which follows the valley east of the ridge
will be less used. Down the same valley there runs a single-track rail
spur from Diva through Panvel to a place called Apte, which could, with
double tracking, eventually be incorporated In the urban rapid transit sys-
tem. One wonders why this valley, which dc"zs have a modicum of infrastruc-
ture and links tp with the Kalyan-Uhlasnagar complex to the north, has been
specifically res_-.ed for agricultural purposes in the land use plan of the
region and has not been braught into the ambit of the twin city.

85. For water, as noted earlier, the site is well placed because of
the additional capacity available from Barvi. For power, it is neither bet-
ter nor worse off than Bonbay itself. It should have reasonably good access
to Bombay and will of course have better connections with the hinterland
than Bombay (except by air, but the difference would be small with the com-
pletion of the Thata Creek bridge). It is by design a step closer to the
ur.derdeveloped region of the Konkan to the south, 1/ but this can only be
cusidered as a very long range advantage. Altogether, while one can think
of possible argumer.ts for other sites, none of them are very compelling.
_ombay is going to grow along the eastern littoral in my case; indeed, it
has already begun to do so. There is a strong case for planning this growth
and reaping the increments in land values w-hich ensue. It is hoped that th.
new city center will compete, and compete successfully, with the present
Fort area for the kind of office development which has congregated there.
No doubt in the long run such a development is possible, but it is diffi-
cult to see it happening quickly without extraordinary imducements. In the
short run at least, Bandra-Ku-la would appear to offer greater attractions.
One cannot be dogmatic about this; it remains to be seen. The fact is, how-
ever, that, once it is undertaken, speed is important in bringing the new
city to a size where economies of scale ard density and the advantages, what-
ever they may be, of agglomeration can be realized without undue delay; more-
over, the quicker the development, the quicker and perhaps even the greater
(because of nore rapidly increasing land values) the recoupment of the ini-
tial outlay for land and services.

86. One thing which needs to be avoided is the evolution of the twin
citv as just another dormitory community for Bombay. If this were to happen
it could v'ell add to rather than alleviate the problems of Bombay, in par-
ticular ita transportation system. Becaus-. of this threat, the various pro-
pose's for building bridges, in some cases _ather expensive ones, across the
harb'r should be looked at with considerable skepticism. New transportation
facilities wjuld have to be provided, whereas the present transportation
system In Greater Bombay can, through patching and improvement, have sub-
stantially increased capacity along the axes already existing. The fuEure
of the twin city and the minimization of its more insalutary competition
with Bombay itself depend on the decision to give it a clearly defined

1/ A large proportion of the immigrants to Bombay come from this region.

 - 36 -

function for wtich there is no' alternative. There is no doubt what that is:
the function of government at both state and national levels, insofar as
those are represented in the metropolitan region. Ir.1966 the state govern-
nent employed 57,000 '3eople in Greater Bombay and the union government 90,000,
exclus4.ve of the railways ani the port, nationalized banks, and the Life Ii.
surance Corporation. The railways alone employed 96,000 people, but it could
be argued that decentralization of employment in this case depends to a sub-
stantial extent on decentralization of physical facilities.

87. Clearly, much depends on how serious noz only the Maharashtra Cov-
ernment but also the union government address themselves to thie question of
moviing, if not all, at least a large part of their establishment out of the
island. This was apparently at one time considered in% the context of the
Bandra-Kurla development; indeed, the idea of moving - in this case to the
mainland - is at least 300 years old. If the twin city is in fact a serlous
endeavor, few things are likely to advance ii so much as the movement of a
arge bloc of government offices. The worst solution would be to keep a
foot in both camps. Neither would Bombay's problems be solved nor would
CIDCO be able to develer the city as fast as it should, if it is going to
be developed at all. The alternativ-s which present themselves are: an
all-out rush of resources into the ca'n city; neglect of the twin city in
favor of pushing resources into Greater Bombay; and a careful timing of the
shift of caphasis from setting Bombay on the right road to the development
of the twin city. The -elationship of the twin city to Bombay its_'f and
the rest of the region lends added weight, if such is necessary, to the need
for some form of forward 'investment planning for the region.

Planning for the Region

88. If one acrepts the present institutional framework in India, the

Regional Planning Board's recommendation against a single development author-
ity for the region wv well have 'oeen right. In some sectors it migh- well
be that a regional authority vould be an improvement, but an overall d.-
veicpment aluthority for the regio:, would be in much the same positiz.n as the
BMC is now with exclusive powers in some sectors, limited powers in others,
and prattically none in the remainder. The proposal for a coordinating coun-
cil almost certainly does not go far enough. Coordination is a much abused
word; it is often used as though it costs notihing and automatically confers
benefits. The question is, aa in most things, to determine where the rela-
t onship between cost and benefit is most favorable. In the Bombay metro-
politan region, as probably in others, the problem appears to lie not so
much in day-to-day operations as It does in longer term determination of
policy and investment plans.

89. There are nunerous trade-offs to be observed and no place to de-

termine hiow they can best be resolved. Prima facie, the expenditure now
being made on the tunnel through the Malabar Hills and associated works for
the West Island Freeway is not of very high priority; nor is some of the ex-
penditure at Santa Cruz. On the other hand, if the Thana Creek bridge is
to be of any use, the Sewri expressway on the Bombay side and an improvement
of the road to Panvel on tne other would appear to be earlier requirements.
 - 37 -

rerhaps one of the most interesting projects is the cutoff route becteen the
Wsestern and the Central railways. Once this is completed, the freightyards
at Dadar and Parel will no longer be needed. They can then be converted to
other use>. One such which '-as been suggested is a sh!ft of the main line
terminals to chat site (although this may not be far enough north). Ir any
event, a number of decisions depend on this one.

90. These ceses are quoted merely .^s examples. If decision3 continue
to be made at various different levels in the hierarchy of government, and
the results of these decisions seep down i.,to the metrcpolitan economv as
an almost accidental allocation of resources, scme body is needed socewhe.e
in the framework of the Government of Maharashtra to put the _ase for and
represent the interests of the whole metropolitat; region long before the
stage of final allocation. It is not onlv Greater Bombay and the twin city
which are involved; there is the whole industrial belt from Thana to Kal.yan-
Uhlasnagar. This belt, which is indu3trially as important as Poona, is in
need of municipal consolidation and, in its absence, is likely to receive
short shrift. Any planning organization would need some sort of instrument
of its own to make it in any way effective; otheiwise, it will simply remain
a planning body without real power. Perhaps, in the context of the present
system of Indian planning, the power to present prcposals as part of t'.e
Five Year Plan would go some way towards the torging of such an instrument.
However, this would only be effective if the oropcsals covered the entire
urban region in all its aspects. Thi:' would mean making specific oropos&ls
for such organizations as the railways, oorts and civil sviction wichin the
metropolitan region. This may per4aps be a ndification of the present
planr.ing system, but, if so, it wn'ld be little more than a recognition
that planning itself needs adaptation to the realities of urban development.

91. If such a body can prepare a set of iuvestment proposals for the
Bombay region and policies, particularly price policies, to go with them,
there would be a better chance of coming closer at least to a suboptimal al-
location within the region. The problems, however. go somewhat further than
preparation of a five year plan. Allocation of foreign exchange is, as exam-
ples already quoted show, an additional issue to b_ taken up with the union
government. Such issues can only be attended to if the planning process
is flexible and continuous. Planning must also be well founded on adequate
data and analysis. Some observations on the deficiencies of the statistical
apparatus for the region are noted in an appendix. All this argues not only
for a planning bco:y, iut one with a staff which has this as their main func-
tionl/. How suc;1 a planning organization should be constituted within the
present governcmental framework is not a matter on which one can pass judg-
ment in this :aport.

1/ These are not particularly original thoughts. Compare Ashish Bose,

Urbanization in India, 1970, pp. 99/100: "It is necessary, therefore,
to recommend the setting up of expert bodie, which will be charged with
the continuous evaluation of the implementation of the master plans.
The most tmportant aspect of any development plan is the avail-
ability of finance .... .... ...it is time the budgeting techniques are
re-oriented ... ..... ILediate steps may be taken to launch projects
for: evaluation and the fullesc utilization of the existing material -
statistical as well as non-statistical.. .'. (Italics in original)
 - 38 -

A"PENDIX ON STATISTICS

1. The needc for an improved information system, if somn organization

is c-t.ated to use it, has been alluded te ir the report. In this appendix
a tew exanples will be given of the type of thing which zould be urlerteAen.
A case in poInt is employmenr. Possibly the most reliable figures in em-
ploytment are those regularly collected by the inspector of fact.ries.
Their coverage is quite wide since '. extends to factories with 10 or more
employees u-.ins oowcr and 20 or more employees in factories without power.
Moreover, the figures are adjusted ir.cooperation vith the Bureau of Sta-
tistScs fnr non-reporting establishments. rhe Annual Survey of Incustries
has less wide coverage in that it only lakes in plants with 50 or more em-
ployees with power and 100 or more without it; smalle- establishments are
covered by sample. The Annual Survey hc ever gres into much more detailed
information (cf Tables 4.1 and 4.2). TFere seems at the moment to be
noiway of linking the two sourcer of In.formation. Nor as yet is there
a gS_ographical breakdown wlthin the region which should become increasingly
uqeful. A thlrd source is the statistics produ_ed by the Directorate
of Enp'oyment which has yet a third field of coverage. It covers establishmtats
of 25 or more ir.Greater Boobav axnd 10 or more in the rest of the state.
The5:e figures which cover all esrablish3ents, not just industrial, are
produced quarterly but ate considerably less reliable. The kind of adjustment
.or non-reporting establishments, which is made in the case of the industrial
scatistics of the inspector of factories, is not apparently made in this
case. If a geographical breakdown is made it is not published. Understandably,
sa i rtsult of this somewhat confused situation a variety of figures
can be ouoted about employment in Bombay, which qre difficult to interpret
imless one kncws precisely what the coverage and 'he source are. The Traffic
Cell in its report gives figures for employment bz.Rd to a eubstantial extent
on a heasehold survey and a work place survey. Here again, however, a precise
defintiticn of what is meant by employment is not given. It is possible to
assume :h't regular employment is all that is included L= one cannot be
absolutely sure (see notes to Table 3.3).

2. Despita the very considerable efforts of the Traffic Cell, there

is much more in.`ormation to be gleaned, for' example or passenger movement,
thlan now exists or at least is readily available. Estimates exist, for ex-
ample, of the number of people who arrive at a railway station and of those
who leave. If the first figure is bigger than the se^ond, the difference
is the "net" nunber of people who get out at that station. What we do not
know is the gross number, i.e. the number who actually get out and thc num-
ber of new vassevgers who get on a train at that point. The difference be-
tween t.iese two is of course !'e net figure. Such figures are known or at
least estimated for totul traff'c, b%;t not for the critical peak-hour traf-
fic. TIere is, moreover, litr. i ntormation on cross-'commutation. Clearly,
there is a great deal of statistica.,. information to be gleaned from the
railways. Ways of providing this witiout exressive cost should not be too
difficult tc devise. Bettcr statistical usit might be made of season ticket
records, for example.
 - 39 -

3. The present method of issuing bus tickets precludes any assess-

ment of the distance distrlbution of bus trips. It would be worth consid-
ering issuing tickets so as to identify the approximate length of the cor-
responding trip, and its origir. and destination at least in broad zones.
If this were done, it should not be a difficult matter on occasion to
estimate the distribution at different times of the day. In a somewhat
different category would be the kind if special investigation into the
origin and destination of goods meri.ioned in Chapter Il; this would have
to be done on a sampling basis.

4. Regular series of statistics serve a valuable function, even if

it is necessary to undertake special studies such as that carried out by the
Traffic Cell. Each can serve as a check on the other. There is less likeli-
hood of the results of a special study or at any rate thelr precise signifi-
cance being lost. As it is, there is a tendency, not only in Bombay, for a
mass of information to be collected and put on to compdter cards which are
then, to all intents and purpos-s, "buried".

5. One final observation _.. :erns the census which is to take place
this year. Censuses have n-.t hitherto 1 'een particularly concerned vith ur-
barn movement. If it is not too late, it might be worth considering, at
least for Bombay as a trial, including one or two simple questions about
the cegular daily trips that people take, their time and location.