Research reveals untapped economic opportunity in Indian slums

Two new reports released yesterday provide insight into the lives of some of India’s most vulnerable citizens—urban slum dwellers—and how city leaders can help.

With implications for slums across India, the reports reveal an average purchase price of Rs 15 lakh (~USD $23,000) for slum households in Bengaluru. The implication is clear - slums are a sizeable economic asset hiding in plain sight for many residents and government officials.

Formal recognition and documentation of slums could generate tremendous, unprecedented revenue for Indian cities, improving civic services, and overall economic growth.

Across India, more than 105 million people live in informal settlements, or slums, and many do not have recognised rights to their land and property. Without formal documentation, slum properties are untapped ‘wealth’ for both residents and the government, as residents cannot easily leverage or sell their property and governments cannot collect taxes or effectively provide basic services such as clean water.

The study also points to the host of spinoff benefits to urban society, including improvement in the quality of life across the social spectrum, efficient delivery of amenities and more equitable and inclusive India.

The Sanford School of Public Policy at Duke University, in partnership with global impact investment firm Omidyar Network, North Carolina State University, and University of North Carolina, Chapel Hill, released the reports at the recent workshop, ‘One Way Ticket—New Migrants, Emerging Settlements, and Stickiness with Bengaluru Slums,’ organised at IIM Bangalore, an initial partner of the new research.

Titled ‘Studying the Real Slums of Bengaluru’ and ‘Characterising Irregular Settlements Using Machine Learning and Satellite Imagery,’ the reports focus on Bengaluru, India’s fastest growing city in the last decade.

Findings from the report can inform a range of stakeholders in the region and beyond on the real needs of slum dwellers and how technology can help develop effective solutions at scale, as the following points demonstrate:

• Government databases are out of sync, vastly underreporting the amount of slums in existence. Official records show 597 slums in Bengaluru, but machine learning algorithms now reveal there are nearly 2,000 slums in the same area.

• Slums are not transitory in nature, dispelling the myth that increasing slum populations are due to the recent boom in urban migration. In Bengaluru, a slum resident is likely to have lived there for 20 years.

• The average slum in Bengaluru is worth an estimated Rs 15 lakh (~USD $23,000). Without formal documentation, neither residents nor government can utilise this economic asset.

• Slums exist across of spectrum of living conditions. Some slums in Bengaluru lack basic needs such as clean water and sanitation, and others need education and job opportunities. Policy must be responsive to the continuum of slums.

• Technology must be a part of the solution. Satellite imagery and machine learning algorithms can help authorities map and monitor the growth of slums quicker, cheaper, and more accurately than ever before.

“What we found truly remarkable in the reports’ findings were the ingenuity and determination of slum dwellers in the face of these challenges,” said Professor Anirudh Krishna from Duke University, who has led the research team since 2010. “Bengaluru’s slum dwellers have learned to make do with a robust informal market with lawyers, brokers, and politicians, where there are at least 18 different documents circulating with varying levels of legitimacy and enforceability. These residents need and deserve a better system for securing their land and property rights, and this research is an important step in the right direction.”

Roopa Kudva, Partner and MD of Omidyar Network in India, said, “The in-depth insights from more than 4,500 slum households over seven years, combined with the data on value of property transactions clearly underscores the economic potential locked in the slums. Governments too are recognising this – in Odisha, we are working with the state government, using drones to map 250,000 slum households enabling them to provide formal property titles to one million slum residents. Property titling for slum dwellers has a clear link to overall economic development, and Omidyar Network will continue to support creation of robust data to drive the discourse and decision making in this field."