Tiruppur is a city in Tamil Nadu with a population of a little over three lakh. Every year, it generates Rs 3,000 crore by exporting cotton and woollen knitwear products. Moradabad, Uttar Pradesh, has a population of about four lakh. It exports handicraft products worth over Rs 1,200 crore annually.Haryana's Panipat has a population of just two lakh. It is famous in history for three crucial battles. Now it has emerged as a major centre for thedurrieand carpet industry, with an export turnover of close to Rs 450 crore per year. Bhiwandi, Maharashtra, has less than four lakh residents. Even so, it houses about 25 per cent of India's powerlooms.Tiruppur, Moradabad, Panipat and Bhiwandi are a tribute to local enterprise. There are many other export powerhouses. Agra for leather. Surat forzari,diamonds and powerlooms. Coimbatore for textiles and steel. Ludhiana and Jalandhar for hosiery, sports goods and light engineering. Rajkot for pumps.So much for the big cities. Among the medium-sized ones, there is Aligarh for locks, Maunath-Bhanjan for handlooms, Nagaur for handtools, Jamnagar for brass, Salem for handlooms, Kanchipuram for silk, Khurja for ceramics, Bhagalpur for weaving, Mirzapur for carpets, Sivakasi for matches. The examples can go on.These towns and cities have much in common. They are all focal points for the regional economy. They have witnessed the fastest growth of employment in the past two decades. Unlike Bangalore, Vadodara or Ranchi, they have not prospered because of public investment. They are largely self-made. Each is dominated by just one or two industries. Most important, they are neglected by way of basic infrastructure and this is limiting their growth.This pattern of spatial concentration is not peculiar to India. Italy is known for its industrial districts which specialise in precision engineering and textiles. The US has its software mecca in Silicon Valley. China has its bicycle cities and shoe villages. What is unique about India is the neglect of these towns. It comes at a time when there is growing global demand for the skills they have developed.There is more than economics to these towns. Many are powder kegs waiting to be ignited. They are melting pots drawing migrant workers from across the country. Child labour is rampant. Bhiwandi and Moradabad have seen among the worst communal riots in recent times. Surat, which generates Rs 5,000 crore a year in exports, was struck by a plague-like epidemic in 1994.The tensions are intimately linked to the pattern of spatial growth, to changing economic relationships among different communities - and to government failure to provide even the minimum physical and social infrastructure.A beginning is being made in Tiruppur. A Rs 900-crore project, jointly promoted by the Tamil Nadu Government, the Tiruppur Exporters' Association and Infrastructure Leasing and Finance Services, is set for implementation. It will provide piped water and set up effluent control facilities. But it has taken four years for the project to get off the ground. This relaxed schedule has to be compressed.Such area-based infrastructure projects are needed in each growth centre. Local industry can be invited to participate. These cities also need design and technology delivery institutions of the type that exist in Japanese prefectures. These will add value to local products and make them more marketable. Recently, thanks to the Union textiles minister being the MP from Surat, the National Institute of Fashion Technology set up shop there.The financing of infrastructure projects will get a boost if we open up the insurance and pension funds sectors. At present, these are state monopolies. Today, LIC and GIC provide close to Rs 7,000 crore a year for water, power, housing and other infrastructure projects. What will happen if we liberalise the insurance industry? In about 10 years, each new company will be able to mobilise at least Rs 5,000 crore annually for infrastructure.The development of a municipal bond market will also help in financing such projects. Recently, the Ahmedabad Municipal Corporation became the first urban body to raise resources through the issue of bonds to the public. It mobilised Rs 100 crore, a small amount but still a beginning.The Government supports various schemes for modernising industry. It provides funds for improving productivity in the bicycle industry. It also runs projects for providing urban infrastructure in, say, Jalandhar - which supports a large bicycle-manufacturing base. But these programmes are not inter-linked simply because different ministries operate them.Infrastructure will no doubt reach Ludhiana. But how much better it would be if it were related to the needs of the city's economic lifeline. Social justice too can be productively linked to globalisation's imperatives. All this requires is giving economic policies the necessary area focus. Take the leather industry. Upgrading its facilities in western Uttar Pradesh can benefit the Jatavs, among the preponderant Dalit groups in north India. There could yet be a meeting point for social and economic reforms.The author is secretary of the AICC's Economic Affairs Department. The views expressed here are his own. Published By: AtMigration Published On: Aug 24, 1998--- ENDS ---
