Applying the “shampoo sachet” paradigm to affordable housing, rather than evictions and demolitions
Professor C K Prahalad's much celebrated book entitled The Fortune at the Bottom of the Pyramid was launched on the Independence Day two years ago. The book is about how to eradicate poverty through profits. For more than a decade, Prahalad has urged business leaders and leading capitalists to see the poor as individuals and consumers. The poor represent a huge market waiting to be tapped. If you sell products and services in small portions, at affordable prices, your business can multiply a hundred fold. This is the kind of thinking that spawned an industry of shampoo and pickle sachets. Of course such innovations that serve products in micro quantities are nothing new. After all, we are the only country where cigarettes are still sold in “singles” at paanwallas. But technology now makes it possible to extend this concept to health insurance (daily premium of Re 1), microfinance (loan of Rs 1,000) or telecom (a refill of Rs 10 on your cell phone). Can we now apply this concept to housing as well? In some small way that may already be happening. We have seen sprawls of low income housing coming up in distant suburbs like Nala Sopara and Virar, which are fast becoming dormitory towns. Various slum rehabilitation schemes across the city are now successfully putting up one room tenements costing less than Rs 1 lakh. Thus low income families can now legally own a dwelling for an affordable price, although the number we need to build are mind boggling. But what about a provision of housing “services” in small doses? What if someone just needs to rent a place for a couple of months, and is willing to pay, say a rent of Rs 500 a month? Is there a legal thriving market for this? Can we expect a shampoo sachet revolution in low cost rental housing in cities like Mumbai? This question is relevant in the context of this week’s Supreme Court judgement which said that encroachers have no right, whatsoever, on public land. In essence the SC said that poverty is no excuse to become squatters or pavement dwellers. Unfortunately in the cities, if you are very poor, your dwelling place is almost surely illegal. Legally speaking, the poor have no right to occupy public lands, and certainly they cannot occupy private land (unless they buy those Nala Sopara like tenements). But unfortunately there is simply no market for renting a room at Rs 10 a day, even though the idea is economically feasible. There are several reasons why the shampoo sachet framework does not work for housing, and mostly it is because of various laws related to housing, rent control, TDRs, property tax, stamp duty and so on. The current SC verdict also seems to be inconsistent with another famous SC judgement from 1984, involving eviction of pavement dwellers in Mumbai. In that case, the court was more sympathetic to the plight of the pavement dweller, who is typically a migrant from an even more impoverished hinterland of the country. It observed, “The right to live and the right to work are integrated and interdependent and, therefore, if a person is deprived of his job as a result of his eviction from a slum or a pavement, his very right to life is put in jeopardy. It is urged that the economic compulsions under which these persons are forced to live in slums or on pavements impart to their occupation the character of a fundamental right.” It thus made right to shelter a fundamental right. In that same landmark judgement the court had stayed demolitions and rather boldly said that, “A state which has failed in its constitutional obligation to usher in a socialistic society has no right to evict slum and pavement dwellers who constitute half of the city's population.” It is clear that removing the poor from the streets of a city cannot solve the poverty problem.
Ajit Ranade on the wheels that make Mumbai run, money and economy
Members of a family collect their belongings after their home in a slum area in Delhi was demolished
(Mumbai Mirror/13th May 2006/pg30)