ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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The Hope and the Dilemma of the Urban Poor

Padmini Ram ( teaches economics at the Christ University, Bengaluru. Barrie Needham ( is Professor Emeritus of Spatial Planning, Radboud University, Nijmegen.

A common view about economically weaker sections and lower-income groups in India is that they live in slums because they cannot afford to buy or rent decent accommodation in the formal market. However, some can pay a monthly rent and/or for the services such as garbage disposal and water, but they, and others who can afford to buy, are deterred by institutional constraints. Many slum households face a dilemma: opting for better and more secure living conditions would mean losing some of the advantages of living in a slum and the possibility of a free home.

The authors are grateful to Ian Hodge (Department of Land Economy, University of Cambridge) for his suggestions in improving earlier versions of this paper. Financial support and scholarship grants were provided by Cambridge Political Economy Society grant, 2012 and 2013; Cambridge University Graduate Student Research grant, 2011; Clare Hall, University of Cambridge, research scholarship 2011; Smuts Memorial travel grant, 2011; and Gilchrist Educational Trust, 2011.

The policy debate on housing the urban poor has evolved—from the sites- and-services approach, to slum upgrading, to enabling upward mobility out of slums. Recent studies find that slums are often “traps rather than springboards” (Marx et al 2013). There is evidence that contradicts the conventional wisdom: if given implicit recognition by the government, informal settlements consolidate over time and housing improves (Gulyani and Talukdar 2008). The result is that slum dwellers are often stuck in a suboptimal equilibrium of low-quality, but high-cost, housing.

Urban poverty researchers are advocating that efforts should be made to understand and encourage one of the benefits of urbanisation—upward mobility out of city slums (Glaeser and Dempster 2015). The emphasis in housing the poor is now on a pluralistic approach that stresses enabling housing provision for the poor by expanding the range of providers to include government, the private sector, the poor themselves, non-governmental organisations (NGOs), and cooperatives (Yeboah 2005).

Official housing policy in India has also changed over the course of time. The Government of India (GoI) has initiated several innovative housing programmes and policies, especially for the lower-income segments of the urban population, but the coverage of these programmes and schemes is marginal in comparison to the overall housing requirements (Sivam and Karuppannan 2002; Willis and Tipple 1991). Providing affordable housing is a formidable challenge in developing countries.

The extensive literature on housing affordability among the urban poor—on slum and squatter settlements, land and credit markets, and the formal and informal economy—reveals that the “urban poor” is a broad category with varying capacities to afford housing.1 Slum dwellers, or people living in informal settlements, do not constitute “a single homogeneous group.” A considerable section of slum dwellers has a regular source of income; they are looking for a permanent shelter with basic amenities, and they are able and willing to pay for it (Muttagi 1998). In principle, this demand can be met by private builders in formal markets, and meeting this demand can help to solve a daunting problem.

New Evidence about the Dilemma of the Urban Poor

This paper reports the results of a survey of 211 slum households in Raipur, Chhattisgarh. It confirms that the urban poor are a heterogeneous group, and many of those currently living in slums could afford to buy “simple,” decent housing. The results complement the finding in other slums: institutional constraints prevent or hinder those whose could afford to buy from doing so (Ram and Needham 2017). These constraints are inadequate access to credit and mortgage, because of informality; distrust of private builders; inability to spare the time to search for a house; and inability to pay the bribes necessary for registration.

The findings of the survey—about their motivations for wanting to stay in a slum neighbourhood, or move to better housing elsewhere—add to our knowledge of the slum housing situation. In order to understand the significance of those findings, it is necessary to give first some information about the household situation of those households. The survey-based evidence is presented together with anecdotal and personal accounts of the slum dwellers gathered through informal discussions. Even though generalisation was not an objective, a random sample of 211 households from 21 slums, allows us to report the findings with 92% confidence level and 6% margin of error.2


At the time of fieldwork (January to August 2012), households were grouped by their monthly income into the economically weaker section (EWS) and the lower income group (LIG). The EWS earned ₹ 2,000–₹ 5,000 ($36–$90), and the LIG earned ₹ 5,000–₹ 10,000 ($90–$181). During the pilot study, it became apparent that the official definition needed revision3 but, without a new official definition, the study had to form its own. Households with a monthly family income of ₹ 2,000–₹ 6,500 were considered EWS, and those earning ₹ 6,501–₹ 12,500 per month were considered LIG. If households reported that they earned ₹ 6,500 (EWS limits) in some months but slightly more (LIG limits) in other months, their lowest reported income was considered, and they were classified EWS. None of the randomly selected EWS households in the survey earned less than ₹ 5,000 per month. Approximately 20% of the households encountered during the survey earned more than the income range as defined by the study, and were therefore not considered.

The random survey was conducted among 211 households from 21 slums dispersed across the area of the Raipur Municipal Corporation. These slums differ in access to various amenities (in terms of proximity to a hospital, school, or railway station, and access to services in the slum). People from the same caste tend to reside together; so, though most slums have mixed groups, some are divided on the lines of occupation (ironsmiths live in Lohar Para, for example) and/or on the basis of where they migrated from (such as the neighbouring states of Odisha and Madhya Pradesh; some are local Chhattisgarhias). To reduce the anomalous effects of such systematic differences, the data was collected from different slums rather than from 211 households in one slum (Table 1).

The survey respondents were household heads (male or female).4 Data were collected through face-to-face interviews conducted in their home using a pretested pen and paper survey schedule. In every case, before the data was collected, the respondents were informed of the academic objectives of the survey. The information provided—household characteristics such as family size, access to services, number of currently employed family, the sector they were employed in—was cross-checked through observations if possible.

Who Are the Slum Dwellers in Raipur?

The slum dwellers in Raipur are a heterogeneous mix. Of the 211 households surveyed, 94 households were from the EWS and 117 were LIG. Most households (63%) were nuclear families; each had between one and five members. About one-third of the households (32%) had elder parents and younger unmarried siblings living with them. Only 5% of the households had more than 10 members, with extended families living together.

In general, slum-dwelling families are hard-working. They save regularly. Of these households, 38% (81 households) had one earning member, 36% (75 households) had two, and 25% (53 households) had three or more earning members. Household heads were self-employed in 17% of the households (35 households); 28% (60 households) were salaried employees; and 55% of the household heads (116 households) were casual labourers or daily wage earners.

The self-employed are petty shopkeepers, small restaurant owners, wedding-band musicians, halwai (cooks for large events such as weddings, and other social functions), mechanics, ironsmiths, handymen and plumbers, masons, barbers and salon owners, laundrymen, street vendors, and brokers (who arrange weddings and land and vehicle deals and settle disputes, for a fee). The salaried employees work in both the private and government sectors. Those employed in the private sector work as cashiers, drivers, security personnel, beauticians, or as sales representatives in the retail sector. Those in the public sector are employed in the police force, health department, and the railways. The casual labourers worked as house help, rickshaw pullers, autorickshaw drivers, or construction workers. Of the families surveyed, 60% had a bank account (mostly with Sahara Bank) and regular savings.

What Are the Characteristics of Self-built Housing?

Each slum neighbourhood had a variety of types of housing. Some neighbourhoods had houses built along both sides of a narrow lane, others along a railway track. Some, such as Lal Ganga Basti, had large open spaces even though the neighbourhood was situated right in the middle of the city. Most slums showed signs of municipal neglect—trash was not collected regularly, drains were not cleaned, streets were in disrepair—but, in Raipur, such neglect is not confined to the slums. Men and women sat on street corners, or under a tree or shade, talking. Women sometimes worked in groups, cleaning foodgrains, or combing their children’s hair, while men sat in a separate group playing cards or sharing tea while reading a newspaper.

For the purposes of this survey, housing structures are divided into pucca (permanent, or both walls and roof made of bricks and concrete), kaccha (temporary, or built with makeshift materials), and semi-pucca (walls made of bricks but with thatched roof). Pucca houses were relatively well maintained, but most semi-pucca and kaccha houses had health and safety concerns. The distribution of households between these types was nearly equal (32%–33% of each type) when summed for 211 households, though some slums do have better houses than others.

Of the surveyed households, 40% (85 households) lived in two-room houses, while 34% (71 households) lived in one-room houses. The LIG families were not more likely to live in two-room houses than the EWS; the distribution was fairly even and based more on the “length of stay.” In most cases, the second room was an extension to the original structure. If a house had three or more rooms, the family would typically have been living there for a considerable time; demolished the temporary structure; and built a new, more permanent structure in its place.

Of the surveyed families, 98% (206 households) had electricity. The remaining 2% (five households; data negligible) used kerosene lamps for lighting.5 For cooking, 73% (153 households) used liquefied petroleum gas (LPG), while the remaining 27% (58 households) used firewood.6

Only 15% of the households (32 households) had access to drinking water in their house. The remaining 85% (179 households) got drinking water from the common tube well or open well or from tankers which delivered it. Some slum dwellers mentioned that members of the “lucrative” water tanker business made sure that drinking water was not delivered through pipelines to slums, and that bids are won through political favours.

Only 37% of the households (79 households) had their own toilet; 60% (127 households) reportedly had to use open spaces. Modesty requires women to wake up very early to relieve themselves; that is a key motivation for households, especially families with college-going/older girls, to consider moving out of the slum. The remaining 3% (five households; data negligible) reported either having built shared toilets or using paid community toilets. Households that had built their own toilets did not have a connection to the sewage system; therefore, it was easier to build bathrooms that could be connected to open drains than toilets that need careful solid waste management. Nearly 56% (113 households) had their own bathrooms but only 37% their own toilets.

Of the surveyed houses, 31% (66 households) did not have a drainage system. The municipality had built drains for the remaining 68% (144 households), but almost all the drains were derelict and needed repair. None of the surveyed houses had paved roads; 30% of the households (61 households) were connected by a kaccha7 road, and the other 70% (148 households) could be accessed only on foot or in some cases by a bicycle or a motorcycle.

The slum dwellers were asked an open-ended question about what they preferred or liked about their neighbourhood. An overwhelming majority did not like anything; so, answers were later grouped. However, nearly 12% liked the community they had in the slum, 8% liked the proximity to markets and workplace, and 3% liked the infrastructural services.

What Are the Land Arrangements?

Most slum dwellers (72%) lived on encroached public land, and 11% (24 households) on encroached private land. In 1998, the government granted 7% of the households (15 households) an occupancy right certificate for a duration of 30 years.8 Sixteen households (7.5%) lived on village land; they did not have any documentation or knowledge of whom the land belonged to.9 A negligible number (four households) claimed to have legal title to the land, but they did not agree to show their records. Some living in village homes were tenants, especially in Gondwara. They were industrial workers in the nearby factories to whom homeowners had rented part of their property. These rental agreements were informal.

Even on encroached land, public or private, the dwelling had sometimes been bought or paid for by the current residents: 13% (25 households) of the surveyed families had bought the property that they were living in. These families were aware that the property was encroached and that the deal had been made in the informal market. About 72% of the households (151 households) had built their house using materials they had access to, and 13% (29 households) were living in informal rented accommodation. Newcomers were few—62% (131 households) had been living in the same slum for more than 20 years—and were mostly renters.

For owner-occupiers—86% (182 households)—the situation about length of stay refers to first, the slum and second, their house. The first set of encroachers in the slum usually built their houses incrementally. A family would come and encroach upon a certain space within the slum. As the children grew up, the daughters would be married off, and the sons would build new homes, often within the same slum. That is probably why—even though 62% of the inhabitants have been living in the same neighbourhood for the past 20 years or more—only 27% of the inhabitants have been living in the same house. For the same reason there is a considerable population (16.5%) that has occupied their current homes relatively recently (0–5 years), while only 2% of the population had moved into the neighbourhood in the past five years.

What Does It Cost to Build/Buy a Dwelling in the Slum?

The 182 owner-occupier households were asked to estimate the cost of building their current home. If the house had been built 30 years ago, they were only able to give an approximation of how much it had cost to build10 it then, and to estimate the current price of their home. Most owner-occupied houses cost less than ₹ 1,00,000 ($1,800) to build/buy, but nearly 15% of the houseowners estimated the price (in 2012) at between ₹ 5,00,000 and ₹ 1.2 million, and 10% thought their house was worth more than ₹ 1.2 million (in 2012). The sample excludes households that were earning above LIG limits.

House prices were estimated similarly in various slums. The price was determined by type of structure (permanent or temporary); the location, both where the house was located in the slum and where in the city the slum was located; and access to amenities. A house on the main road, even if it was on encroached land, was worth more than a house in the inner parts of the slum. The residents spoke at length about how rumours that certain slums would be cleared mean those houses would probably not find buyers.

Some 95 households (53%) managed to secure some form of credit for their housing. Anybody with cash to spare served as a moneylender; the preferred source for getting a loan is often the family or relatives. These relatives are often cash- or credit-constrained. If one borrowed ₹ 100 one month, they had to return ₹ 105 the following month; if they took two months, they would owe ₹ 110. This amounts to a simple interest rate of 60% per annum. The slum dwellers considered the rate high but fair. Moneylenders, as explained, do a favour by lending their meagre savings at considerable risk, and they minimise the risk by keeping the credit short term. Therefore, informal moneylenders cannot lend for long term commitments such as buying a house in a formal market. The slum dwellers also remarked that they often relied on multiple credit sources. If they had taken a loan from the moneylender, they would often borrow from relatives to repay part of the loan.

Nearly 60% of the households had a savings account, but they did not borrow from banks for housing needs, though on occasion some households mentioned accessing formal credit services for buying motorbikes or for small business needs with the help of a guarantor. Of the 103 households who had taken an informal loan for housing needs, every household was aware that for a formal loan the bank would demand registration papers and documents that prove identity and address, which they did not possess. The remaining 79 households (37%) had never taken credit for housing needs.

What Are the Rental Arrangements?

Of the households surveyed, 14% (29 households) lived in rental housing. Nearly 50% of these renters were recent immigrants. They had been living in that house for less than five years. Of all the renters, 90% had lived in their house for less than 10 years. Rental houses were either semi-permanent or permanent. The renters were usually seasonal migrants who come to the city to work as casual labourers during the agricultural off-season. They own land or a house in the villages where their family live. The encroachers, who then become owner-occupiers, were usually those who had severed all ties with their villages, and sold any land that they might have owned, to bring the whole family along. They were more permanent migrants.

The rent (2012) in most slums for a one-room tenement was ₹ 800–₹ 1,200 per month. These rooms were typically 100–120 square foot in size; one corner is used as a kitchen. Typically, there is no toilet (although one rental accommodation in Srinagar had shared toilets). At times, there is a semi-enclosure to be used as a bathroom. The increase in rent was not annual, and it did not follow any schedule. Slightly better housing had a marginally higher rent (₹ 100–₹ 200 more per month). These would usually be occupied by migrants living with part of their family (wife and children) but still supporting their parents back home, or by those working in considerably better-paying occupations, such as drivers or office assistants.

Of the households, 55% had chosen the accommodation or neighbourhood because their relatives lived in those slums. These relatives often helped newcomers to settle in by introducing them to potential employers and landlords. Generally, slum dwellers felt that smaller slums are more likely to be cleared, and therefore residents often encouraged their villagers to live in their neighbourhood.

The remaining 45% (13 households) of the households work in a nearby public works construction or a factory, and rented accommodation in adjoining neighbourhoods. Anyone with a room to spare became landlords. As the places drew more migrants, those who had some savings constructed single-room accommodations. The landlords explained that these single rooms could be let out to families or as commercial spaces for storage or shops. The landlords mostly lived in the same or a nearby slum, and in most cases had rented out a part of their own house/former encroachment.

Of the tenants, 55% (16 households) paid for repairs and maintenance, as required, in addition to rent. The other 45% (13 households) had not yet had the need to undertake any repairs or maintenance; they mentioned having had no discussion with their landlord about such issues. Of the renters, 17% (five households) had built some extensions on the property. A partial enclosure was constructed to serve as a bathroom or changing stand, or a plastic sheet tied over a backyard to serve as an extra room to sleep in. Reportedly, while minor extensions were tolerated, further encroachments were discouraged, probably because they posed a threat to ownership.

Most households (28, or 97%) did not have a written rental agreement; the relationship was based on trust. Tenants mentioned that landlords had greater clout in the community; so, in the case of a conflict, the landlords would have the upper hand.

Building with an Imminent Risk of Losing the Investment

Insecurity was one of the biggest drawbacks of living in a slum for most households, both owner-occupiers and renters, as they had to invest in some form of housing—without any security. About 68% (143 households, including owner-occupiers and renters) admitted that they lived in the constant fear of being evicted by the government. They mentioned that the insecurity is “always there at the back of their minds,” which intensifies with rumours that their slum might get cleared and recedes “when things cool down.” The remaining 32% (68 households) believed that they would not be evicted that year (2012) because the state legislative elections were drawing near; therefore, the fear was not constant—it followed the ebb and flow of state politics. If their elected parshad (councillor) did not support them, they would side with the opposing politician, who would help them organise a rally against the elected leader. However, even those who reportedly did not live in “constant fear” of being evicted did mention that the thought often crossed their mind, but that, as long as the community sticks together, they felt they should be safe.

Are Their Housing Wishes Unrealistic?

About 90% of the households (189 households) responded that they had no problem with living in high-rises. Many LIG families were willing to settle for a smaller accommodation, if it was of good quality. Nearly 95% (201 households) of all households indicated that they were willing to “commute a bit” to buy a decent house they could afford; 70% were ready to move up to 10–12 km from their current location. During the survey, many slum dwellers who lived in the periphery of the city mentioned that while they could move even further than 10–12 km, what mattered was where they were going. They were willing to move in any direction as long as it was within 5–6 km of the city limits. Easy access to the city was the primary consideration.

Nearly 70% of the surveyed households (146 households) agreed that having better public transport would help immensely. Those against public transport (30%, or 65 households) were mainly rickshaw pullers or autorickshaw drivers who feared it would affect their livelihood.

Most households (80%, 168 households) reported a mid-rise dwelling would be adequate for their needs if it had drinking water, toilet, electricity, drainage, and roads. When asked about other requirements, they were quite realistic11 in their assessment of what they could afford, and had the expectation that social amenities would develop gradually. Forty households (19%) considered social amenities such as access to market and transport facilities important; they feared that if they bought homes without such amenities, the authorities or builders would forget about them and they would be left to fend for themselves. Thirty-two households (15%) mentioned that they currently had space around the house where they kept livestock (mostly poultry), and would prefer having such arrangement in the new dwellings; 85% (179 households) did not own any livestock.

Able and Willing to Pay for Their Own Housing?

Before the Technical Committee on Slum Statistics published its report in 2010, there was no agreement on the number of slums or on the size of the slum population.12 Earlier studies13 on the ability of the urban poor in India to afford housing used their own definitions. Some of these studies observed that at least a section of the urban poor is capable of paying, and willing to pay for, the services (rent, water supply, and garbage disposal) that they need.

The GoI categorises housing by price, size, and facilities. Each category is intended for a particular sector—EWS, LIG, middle-income group (MIG), and high-income group (HIG). Formal housing needs toilet, drinking water, roads, drainage, and electricity amenities to obtain town and country planning approval for the building plan. Tables 2 and 3 show a similar classification based on 2008 and 2014 prices14 and income limits.

If the EWS/LIG could secure a mortgage three times their annual income, which is the norm in many places,15 they would be able to afford16 decent formal housing built to government standards (Tables 2 and 3).17For the research reported here, two hypothetical housing scenarios were generated, in discussion with the housing board officials. The price was estimated18 at ₹ 3,00,000 ($5,400) for the 300 sq ft house and at ₹ 5,00,000 ($9,000) for the 500 sq ft house. These prices are comparable to formal government dwellings (described above). Based on this, equated monthly instalments (EMI) and initial deposit were calculated. Ability to pay these amounts was calculated using the residual method19 (Ram and Needham 2017).

In effect, 74% of the surveyed population20 could afford to buy a house, 18% could not, and 8% may not be able to sustain repayments, as their capacity to pay depends on other factors.


But ability to buy one of the “model” houses is not the same as the willingness to buy. This difference became clear during the survey when many households talked of “investing” in one of the houses rather than “buying” one to live in; they were considering buying the house to rent to others, at least temporarily. Not all those who can and will buy would want to move out of the slum immediately; and all households that consider the investment to be “value for money” will not feel the need to buy a new home.

Several institutional factors might constrain a household that could afford to buy a decent house from actually buying one (Ram and Needham 2017). Here we focus on a factor that is a lack of motivation rather than a constraint. Informal interviews revealed that willingness and ability to buy did not mean that slum dwellers would be willing to move out of the slum. Most considered the new homes that they could buy a financial safety net—they were willing to buy such homes if they were available, rent it out, and continue living in the slum so that if the slum was cleared, they would not miss out on their entitlement to a free home. The “hope of a free home”21 gave them an incentive to stay in the slum, but it did not affect their buying decision. It is possible that some evicted slum dwellers will not get a replacement dwelling; in such cases, they want a shelter.

These households regarded a decent 300–500 sq ft apartment with amenities22 value for money, but they were apprehensive about a change in lifestyle. Irrespective of the affordability of a high-rise apartment, 22 of the 211 households categorically refused to move into a high-rise, and eight households reported that they would move only to an apartment that was 500–700 sq ft in size.

Further questioning of what appeal the slum held for these households revealed some possible reasons. For these slum dwellers, their strength lies in unity; this was a point made often. In most slums in Raipur, it was found that people had migrated from the same village. In the case of Bhawna Nagar slum, the first occupant there mentioned how she managed to convince other people from her village to come and encroach on adjoining lands to provide her a support mechanism. Those who reported themselves able to buy their own decent housing expressed the fear that their neighbours might not be able to afford a house and join them. When asked why this was important, the answers ranged from the practical difficulties of losing childcare facilities to emotional issues such as losing camaraderie and solidarity. This comradeship is not superficial sentimentality; it serves a purpose. While the younger men and women are at work, the children usually play in the neighbourhood under the watchful eyes of the older men and women. Their group also knows that if they require a service in the neighbourhood, such as having handpumps or streetlights installed, they need to be together to convince their local parshad. Buying a new house in an apartment without their community seems less appealing.

What did appeal, was having a house with legal title that they could sell if need be, or one that would serve as an investment. The heightened need for an alternative arrangement could have been triggered because of the slum clearance in Raipur at the time of fieldwork.

While slum clearance leads to insecurity, slum-upgrading programmes like the Rajiv Awas Yojana (RAY), where the government provides basic facilities in slums, have the opposite effect. In keeping with the change in views23 regarding tenure security, current slum-upgrading programmes tend to use infrastructure investment as the means for enhancing tenure security and encouraging housing investments.24 Having fought for the right to stay in the slum, the households feel entitled, in case the slum is cleared, to the imprecise promise of a free house. This free house is not a legal entitlement but a political favour, obtained in the same way as the informal right to squat. The NGOs support the slum dwellers’ right to stay in the slum; they claim that slum dwellers have rightfully obtained the right to squat in exchange for political patronage.25 The government26 does not have the resources to upgrade all the slums, but the possibility of a slum-upgrading programme creates hope value: slum dwellers would like to believe that, in time, they will have access to clean environment with basic amenities. Slum households were not homogeneous in this respect either.

There were families, especially those with older, college-going children, who were interested in buying and moving out. Young men of marriageable age were also keen on moving out as they reported that not many young women agree to marry into a family without private toilet facilities. Not having toilets was the most cited reason among the younger generation for moving out. In some households, family members differed; the older generation was more pessimistic about moving out while the younger generation was keener. The resistance to move out of the slum is strongest from those who are earning significantly more than the LIG income limit, and so have the ability to pay, but have already invested considerably in their current homes in the slums. These households are often politically connected and are influential in the community. The more affluent slum populations were to be found especially in the slums of Khamardih, Telibandha, Mahant Talab, Srinagar, and Behra Para. In general, higher the level of income, investment, and consolidation, greater the resistance to move.


Several important findings emerge here. First, they confirm the findings of other research that a section of the slum population with the existing levels of costs and incomes would be able to afford their own “decent” affordable housing if the institutions were different. From a random sample of 211 households from 21 slums in Raipur Municipal Corporation area, 70% of the households are financially able and willing to buy one of the two model houses.

This paper adds to that knowledge by highlighting one crucial point: not all slum households able and willing to buy such housing will do so, even if institutional constraints such as being eligible for a mortgage are addressed.

The general costs of buying formal housing are losing the community, higher cost of living (utilities bill), smaller floor area, and giving up the hope of free or subsidised housing. The general costs of living in the slum are a sense of insecurity, poor sanitary conditions, and no proof of address or access to institutional credit. The formal dwelling is considered value for money, so its benefits outweigh its cost. But buying a formal dwelling does not mean slum dwellers are willing to move out; so, the benefit of living in the slum outweighs the cost, at least for the time being. And the benefits of living in a formal dwelling do not always outweigh the costs of living in the slum and of buying a formal dwelling. That is the root cause for the dilemma. The benefits and costs may vary for each household, as will the tipping point that determines the conditions under which a household decides to buy formal housing.

The current emphasis in the affordable housing debate is on a pluralistic approach that stresses the need to expand the range of providers and interventions to house the poor. While such a pluralistic approach is much needed, this case serves as a cautionary tale. It is apparent that programmes like slum clearance and slum upgrading are affecting upward mobility out of slums, but in contrary ways.

These conclusions are important for policy implications, and they call for studies on the tipping point that might determine mobility out of slums. It is inaccurate to assume that all the urban poor would want to take advantage of measures that make it easier for them to buy their own housing. While the issue of encouraging mobility out of slums is related to that of enabling poor households to buy their own housing by removing institutional constraints, the two issues are different, and they call for different approaches.


1 Even within the same income limits, affordability needs to be measured on a sliding scale as it changes with factors like family size, family indebtedness, tenure, expenditure patterns, etc. While a family with two children and “x” income might be able to set aside 15% of their income for housing, with the same income, the family with four children might be unable to do so.

2 According to the 2011 Census, the number of slum households in Raipur is 80,200. The recommended sample size (from Raosoft) to be able to make a generalisation for Raipur is 384 households (@ 95% confidence and 5% margin of error).

3 In November 2012, the Government of India revised its definitions [vide notification: DO NoI-14012/59/2005.H-II/FTS-1465] for EWS/LIG. EWS is now defined as a family earning less than ₹ 1,00,000 per annum. LIG is a family earning ₹ 1,00,001–₹ 2,00,000 per annum.

4 A household was defined as people normally living together and consuming food from a common kitchen. It includes those who stayed with the family for more than six months a year but excludes temporary visitors and guests.

5 These households were in different neighbourhoods, and were not all new settlers but people who had not received the “ekal batti” (single bulb) connection yet. These homes were often off the main locality, so the electrician from the municipality would have some technical difficulties (such as an extension in underground cable) in extending the connection to those particular few houses, or sometimes when the connection was being provided the families had gone back to their village.

6 The use of firewood was more common in the slums of Gondwara, Shivaji Nagar, and Jagrutee Nagar, and in some households in the Mantralay Parisar.

7 A mud road paved by the slum dwellers themselves, but would be wide enough for a four-wheeler to pass through.

8 Reportedly, in an attempt to garner votes, occupancy certificates were awarded to over 2 million slum residents encroaching on government land (Singh 1998).

9 The houses in slums of Gondwara, parts of Khamardih and Ravigram did look like old village houses, and the claimed owners had reportedly been living there for generations.

10 If they had bought the house, the amount that they had paid was noted down.

11 Many replied on the lines of “if I dream of the moon, I won’t get it,” and others who were more resigned to their fate jokingly replied that mosquitoes in the slums did not let them sleep, let alone have dreams, so all they could afford to do was live one day at a time rather than make castles in the air.

12 There was no slum population data available (before Census 2001) on full count basis. The slum population was estimated by Town and Country Planning Units for 2001 as approximately 62 million. As per UN Population Report (by mid-year 2001), India’s urban slum population was estimated at approximately 158 million. There were various other estimates. These data gaps prompted the setting up of the Technical Committee on Slum Statistics to set a definition for “slum” and to provide a set methodology for estimating the slum population and conducting slum census. The Technical Committee on Slum Statistics did not consider housing affordability (Technical Committee chaired by Pronab Sen 2010).

13 See Ghosh and Sanyal, Muttagi, P K, Singh, U B, Sachithanandan, A N, Thangavel, C, Bhattacharya, K P, for a collection of essays on Rent Affordability in “Affordable Housing and Infrastructure in India” (1998); also see Mascarenhas (2010); Singh S (2011); Feedback Ventures (2006); Mahadevia, Joshi, and Sharma (2009) and Mukherji and Bharucha (2011) for more recent data.

14 The price of the housing is determined based on the actual cost of the house and the subsidies available. The cost of the house is determined by the lowest bid on that particular housing scheme project. The construction bid is open to private builders.

15 In India, the norm is five times of annual income or 60 times of monthly income, as practised by nationalised banks under individual housing loan.

16 This is a theoretical assumption because the ability to pay monthly instalments and having enough savings to be able to afford the down payment varies with each family.

17 There is no public/social low-income rental housing sector in India. New programmes under Rajiv Awas Yojana (RAY, JNNURM) were looking to encourage rental housing schemes. However, the new government elected in May 2014 has announced its plans to make monthly housing mortgage cheaper than monthly rents as a clear indication of preference for owner occupied housing (NDTV 2014).

18 The estimated price of the house was arrived at by adding inflation to the 2008 price fixed by GoCG for EWS and LIG. The government agencies usually work on no profit, no loss basis, they do charge a processing fee of 10%, and an additional 10% is charged by the private contractor who executes the bid for the government housing projects.

19 However, this measure of affordability does not include the daily public services (electricity, water charges) or maintenance costs connected to the units. The households were reminded that moving into such housing would mean incurring such additional charges. This affordability measure also does not include additional costs for transportation that they might have to incur in case of moving to a location further from the city centre. Currently slum dwellers do not use public transport. Their place of work is reportedly within 2–5 km distance for women and 5–8 km for men, and this distance is usually covered on foot or by cycle. Reliance on shared auto services in the city was reported only for personal entertainment such as going to watch a movie or to go shopping. As mentioned earlier, proximity to a market centre and/or residential complex (within 5–8 km distance) for work was reported by 30% households as a prerequisite in their decision to buy new housing.

20 Which excludes approx 20% of the families who could not be surveyed as they reportedly earned higher than the LIG limits.

21 It was commonly understood in the slums that most of the slum clearance programmes do not have sufficient number of houses in accordance with the number of families evicted. But there is always a hope that they might succeed in securing a house. I was unable to obtain official statistics on how many households were cleared and the number of houses allotted.

22 Toilets, drinking water, lighting, roads, and drainage.

23 The earlier view was that tenure security is a precursor for housing and infrastructure investment.

24 This de facto security (without legal land title) is often found to be enough for slum dwellers to start investing in their homes to improve their living conditions (Gulyani and Bassett 2007).

25 Draft model bill on Property Rights to Slum Dwellers Act, 2011 put forth in November 2011, formally acknowledges that entitlement. It allows the slum dweller to purchase 25 sqm of land at below-market prices (to be fixed by the government). So far, the plan has not been implemented.

26 Not just the state government or the GoI, but even at a global level the UN MDGs aim to “improve the lives of 100 million slum dwellers,” which is one-tenth of the world’s slum population. In most countries, the UN MDGs are considered unrealistic, as the governments do not have the resources to fund even the most basic slum upgradation programmes.


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Updated On : 8th Oct, 2018


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