SANEI: Ongoing Studies

Economics of Resettling Low-income Settlements (Slums) in Urban Areas: A Case for On-site Upgrading

India’s policy on slum development has vacillated between slum relocation and on-site upgrading, with preference to the former. Relocation is generally to city fringes, resulting in displacement and disruption of income generating activities, household economic stress and enhanced vulnerability of the poor. Since poor constitute a heterogeneous group, different vulnerable groups experience these economic shocks differently and use different coping strategies to address the livelihood challenge. Arguments in favour of relocation come from the assumption that the value of land occupied by poor is more expensive than that required for resettlement. These calculations however, fail to take into consideration the significant contribution of the poor in the informal sector and the latter’s input to the city/ national economic growth and the long-term impact of displacement on vulnerability of the poor.

The present study proposes to quantify the impact of resettlement on household incomes and city economic growth to influence national policy. It will also be used to develop vulnerability index for estimating urban poverty and replacing income criteria. Specifically, it will estimate costs of on site upgrading versus resettlement, map livelihood / coping strategies and analyse long-term impact of relocation in Delhi and Mumbai through use of participatory tools and other statistical instruments.

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