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Can CM Fadnavis kickstart Mumbai's growth engine?

Fadnavis may want to read the paper and many others of its kind that focus on redevelopment which goes well beyond the reduced version of buildings and carriageways, writes Smruti Koppikar.

columns Updated: Nov 19, 2014 16:42 IST
Smruti Koppikar
Smruti Koppikar
Hindustan Times
Devendra Fadnavis,Maharashtra,Mumbai

Among the first few tasks that chief minister Devendra Fadnavis attended to after taking the oath of office was to re-constitute the way his office was run. Borrowing unabashedly from Prime Minister Narendra Modi’s empowered Prime Minister’s Office, Fadnavis created the Chief Minister’s Office (CMO). What are the odds that the CMO will not become the all-powerful super-ministry in the months ahead?

Fadnavis further emulated Modi’s energy and passion for various macro and micro assignments (from lunching with leaders of corporate India to planning a condolence visit to the widow of a martyred cop on the same day), his penchant for quick decisions and actions, and of course, the PM’s new slogan and economic revival programme “Make in India”. Fadnavis turned it into “Make in Maharashtra”.

Fadnavis cannot be faulted for being a copy-cat. He is just doing his job. Make in Maharashtra, depending on the way it is said, could be an invitation, a fervent appeal, an order or even a threat. That apart, it is assumed that his Make in Maharashtra campaign will have a great deal to do with Mumbai and its pre-eminent position in the economics and commerce of the state. The city contributed nearly one-fourth to the state’s gross domestic product (GDP) of Rs 13,23,768 crore last year.

Yet, for all its bustle and glitz, Mumbai’s economy is far from being the self-sustaining healthy one it used to be when it was the manufacturing hub. Its wheels now roll on the tertiary sector which contributes more than 75% to its economy. It has seen a steady shift upwards from 62.6% about 20 years ago to 73% in 2009, according to state government data. Correspondingly, the contribution of the secondary sector has shrunk from 36% to less than 25% in the last two decades.

The tertiary sector comprising banking and finance, Information Technology, transport and communications, hospitality and entertainment industries places a set of demands on the government different from what the secondary sector — large, medium and small-scale manufacturing, construction, power and utilities — wants from the government. Fadnavis would have to balance those competing demands. This calls for more than appointing a senior bureaucrat as a nodal officer to oversee the work of multiple agencies.

Mumbai’s contribution to the state GDP has been growing at a pace lower than other districts and areas of the state. This is only partly explained by the policy of shifting manufacturing and allied industries outside the city. The city’s social and liveability indicators contribute to this too. This is not to argue against economic revival of other areas; it is only to point out that Mumbai, the growth engine, has slowed down.

Mumbai, as the rest of Maharashtra, shows a high incidence of unemployment among the educated youth. Various national and state agencies put this figure at around 20% but it could be higher. This is the famed demographic dividend getting wasted, day by day. Urban research experts such as DP Singh of the Tata Institute of Social Sciences have shown that the incidence of commercial/economic establishments with self-employed has been on the rise compared to those that employ.

“…The policy-makers should be concerned at the decline in the number of establishments and the number of jobs they create and offer. New industries are not finding space in Mumbai to operate from, which in turn adversely impact newer employment generation. Newer areas need to be developed within city to establish industries to sustain the employment on offer to match at least the present population’s demand for livelihoods,” he stated in an analysis of employment in Mumbai.

Fadnavis may want to read the paper and many others of its kind that focus on redevelopment which goes well beyond the reduced version of buildings and carriageways. Regeneration would have to focus on elements such as employment, security and liveability too.

First Published: Nov 19, 2014 16:39 IST