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Mumbai not the economic capital of India? Think again

mumbai Updated: Nov 30, 2016 18:36 IST
Smruti Koppikar
Smruti Koppikar
Hindustan Times
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Delhi ranked 30th and Mumbai 31st in a list of top 50 world cities ranked by their GDP. Delhi’s GDP in terms of purchasing power parity last year was USD 368 billion; Mumbai’s USD 370 billion (HT)

The Mumbai versus Delhi battle resumed this week. It was not the usual whinge about which city wields more clout or boasts of an exciting social life. This time, it was about hard numbers. Delhi dislodged Mumbai as the country’s economic capital based on their gross domestic product (GDP) figures in 2015, according to the international global advisory firm, Oxford Economics.

Delhi ranked 30th and Mumbai 31st in a list of top 50 world cities ranked by their GDP. Delhi’s GDP in terms of purchasing power parity last year was USD 368 billion; Mumbai’s USD 370 billion. Maharashtra chief minister Devendra Fadnavis was quick to counter that data from the Reserve Bank of India, Economic Survey of India and Economic Survey of Maharashtra showed Mumbai ahead of Delhi on several economic parameters.

Indeed, the Oxford Economics report is only one of many and Mumbai was behind by only USD 2 billion. But it is also about how we read the report. Some points to ponder: The approach and urban footprint used by the firm, the perception of the two cities, and the unique challenges which lie at the heart of developing the Mumbai megacity which is the entire metropolitan region.

Mumbai and Delhi were both measured on the basis of extended urban agglomeration (EUA). For Mumbai’s GDP, the firm included Mumbai, Navi Mumbai, Thane, Vasai-Virar, Bhiwandi-Nizampur and Panvel. The city’s urban agglomeration or the Mumbai Metropolitan Region has eight – not six as used in this report – municipal corporations, nine municipal councils and more than 1,000 villages with a total population of nearly 23 million. This, by the way, is the population of Australia.

Not including Mira-Bhayander and Ulhasnagar cities may have depressed Mumbai’s income by a shade. Also, as economists pointed out, GDP per capita rather than total GDP would have made for a fairer analysis.

In terms of perception, both the cities have their committed admirers and critics. The idea of being close to the seat of political power excites many a mega-investor and global company. Delhi’s fans cite its space, wide roads and the metro network as its other advantages but do these collectively negate drawbacks such as extreme weather, filthy air that’s now an emergency, rude people, and dominant patriarchal-misogynist attitudes?

Mumbai has been historically a commercial centre and an economic hub; it carries advantages such as multiple commercial business districts, efficient transport systems, and a professional work ethic. These are being cancelled out by over-crowding, routine traffic congestions, irrationally high land prices, multiple agencies and chauvinistic politics. Neither city is a shoo-in for investors and capital.

That said, there are other reports using different benchmarks. For example, the Global Cities Mumbai Initiative report of December 2014 which stated that Mumbai remains “the most globalised city economy in South Asia”, is the 12th most interconnected economy, and is still India’s economic nerve centre with headquarters of banks and 21 of 54 largest companies (Delhi has 12).

Mumbai suffers from a perception deficit where its drawbacks seem to trump its natural, historical and contemporary advantages. It is the reverse for Delhi. This is a perception battle. And Fadnavis has some work to do here.

Beyond this lies the genuine gargantuan challenge of ensuring the integrated, holistic and inclusive development of the MMR. The focus has been on major infra-structure projects in some cities; others are neglected. Development cannot be selective. Besides, project-led development has its limitations. Any number of urban planners will tell Fadnavis that people-centric urban plans score over project-centric ones. Given the vast size and the complex urban-rural mix of the MMR, a broad-brush approach to development is unlikely to work.

A solitary international report does not out-weigh all others including official ones but it is a wake-up call, especially when it projects Mumbai three places behind Delhi in 2030. Fadnavis is best placed to embrace bold, new and inclusive ideas to ensure that Mumbai stands tall as the economic capital of the country. Will he, is the big question.

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