For “Bankability” (Part 1)

bank•a•ble, adjective banka’bility noun 
1. Acceptable for processing by a bank: bankable checks and money orders.
2. Considered powerful, prestigious, or stable enough to ensure profitability.
3. Dependable or reliable: a bankable promise

Last year around this time, I was engrossed in researching materials for my Master’s thesis and spent a lot of time reading about the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) specifically its section on the Rajiv Awas Yojana (Rajiv housing plan or RAYs). I chanced upon the Prime Minister’s inaugural speech for JNNURM program and was intrigued by the repeated use of the word “Bankability” in the text.

The PM used this word a couple of times, the first time to talk about the bankability of the poor the second time to talk about the bankability of our city (through its institutions and projects). This shouldn’t have come as a surprise, but I was struck by how the closely related these two ideas were in the mind of the economist. This realization eventually led to chapter in my thesis which I would like to discuss on this blog.

Not exactly his vision!
JNNURM poster from http://20twentytwo.blogspot.com/

JNNURM- RAYS Introduction.
In his inaugural speech for the program Prime Minister Dr. Manmohan Singh paid homage to Jawaharlala Nehru and lauded his efforts to build the modern nation-state. But while the Nehruvian vision for development rested on the creation of jobs through industrial towns, Singh expressed his developmental faith in the in the entrepreneurial, service oriented Indian megacity towards which the program was geared. In his speech he spoke about the Indian city as an economic driver, a bridge between the domestic economy and global economy with untapped potential for economic growth. But he also pointed out that the phenomenal growth of the service sector had caused unexpected pressures on the city’s infrastructure creating an abysmal quality of living for its citizens. The speech set stage for the India’s massive modernization project the JNNURM.

The JNNURM has a two-pronged approach to urban renewal. The program is designed to assist city governments in improving urban infrastructure and basic services for the urban poor. These goals seek to tie together visions of fast tracked planned development with the National common minimum program and the UN’s Millennium Development Goals . Housing, specifically security of housing tenure at affordable prices, forms an important part of the Basic services for urban poor program . In his speech the PM addressed these goals…

“A major failure of city governance has been our inability to address the needs of the poor – basic services like drinking water supply, sanitation, housing and social services are not available to an increasing share of urban population. Countries in Latin America that have large cities in which more than 50% of the population lives, have addressed this problem through an effective system of property rights. Options like giving the urban poor land rights at affordable rates may see an increase in private investment. This in itself will improve the quality of living in our cities. We have to make the poor increasingly bankable. Property rights can be used as collateral for financing new investment in support of social development. Cities need people to provide services and our people need a decent place to live.”

“The Jawaharlal Nehru National Urban Renewal Mission addresses the problems of law, systems and procedures reform and aims to align them to the contemporary needs of our cities and towns. The Mission seeks to do away with those statutes that inhibit the functioning of land and housing markets; it seeks to bring in those improvements that will enable the city-level institutions to become financially strong and viable and our development programs relating to the removal of poverty becoming increasingly bankable”.

In the past infrastructure projects in India have been synonymous with “development induced displacements” . By simultaneously committing to infrastructure up gradation and establishing a system of tenure for the poor, the JNNURM program breaks with the image of the heavy-handed Indian state notorious for its evictions and commits to providing the poor with a right to reside at affordable rates. The plan accepts the inevitability of the Indian future as being an urban future that must be prepared for along the model of Latin American cities that are already 50% urbanized and have solved problems of urban governance by using an effective system of property rights. As envisioned in the speech, a clean formal system of property rights holds the key to two important developmental goals – the creation of the “bankable poor” and creation of the “bankable city”. The prime minister recognizes them as being essential for the increasing private investment which in itself could improve the conditions of the city. The issue of urban slums is considered key to both these goals and is fleshed out in JNNURM’s Rajiv Awas Yojana, (Rajiv Housing Plan, subtitled guidelines for a slum free city). The RAY guidelines open with the programs agenda.

They are as follows:
1. Bringing existing slums within the formal system enabling them to avail of the same level of basic amenities as the rest of the town;
2. Redressing the failures of the formal system that lie behind the creation of slums;
3. Tackling the shortages of urban land and housing that keep shelter out of reach of the urban poor and force them to resort to extra-legal solutions in a bid to retain their sources of livelihood and employment.

The next few posts shall discuss the Prime ministers speech and the RAYs program with the intention of understanding how does the JNNURM/RAY imagine the urban poor and their relationship to the city. Why does the PM lay emphasis on bankability of the poor and the city? How is bankability expected to improve the lives of the poor and the city? I am also interested in locating the interlocutors that influence this ideology and how does it travel to the Indian context.