India is going through some major transitions at the moment. Mumbai has become one of the most expensive cities in the world as far as property prices are concerned. Major property investors, including the Trump organization, Krogers, the U.S supermarket chain, and several UAE property investment trusts are investing heavily in the Indian property markets.

But, like many emerging markets, India faces some large social issues, especially when local wages are not consistent with the property values which are being pushed higher and higher by foreign investors and a small minority of Indians.

According to The World Bank:

Urbanization is not a side effect of economic growth; it is an integral part of the process. As in most countries, India’s urban areas make a major contribution to the country’s economy. Although less than 1/3 of India’s people live in cities and towns, these areas generate over 2/3 of the country’s GDP and account for 90% of government revenues.

India’s towns and cities have expanded rapidly as increasing numbers migrate to towns and cities in search of economic opportunity. Slums now account for 1/4 of all urban housing. In Mumbai, more than half the population lives in slums, many of which are situated near employment centers in the heart of town, unlike in most other cities in developing countries.

Meeting the needs of India’s soaring urban populations is and will continue to be a strategic policy matter. Critical issues that need to be addressed are:

• Poor local governance
• Weak finances
• Inappropriate planning that leads to high costs of housing and office space; in some Indian cities costs are among the highest in the world
• Critical infrastructure shortages and major service deficiencies that include erratic water and power supply, and woefully inadequate transportation systems
• Rapidly deteriorating environment

The decision by the Indian Supreme Court to evict many of the small shopkeepers and store owners because they are breaking local zoning regulations is just one example of a clash between the needs of the property investors and the local population. While commercial activity in much of New Delhi’s residential areas is forbidden by law, this law was largely ignored by authorities - Until there was a sudden influx of foreign property funds.

There have been several protests against both this ruling and the arrival of big box retailer Wal-Mart by not only the small shopkeepers, but the street vendors also. Striking a balance between the needs of the local population and the need to bring in foreign investment capital must be taken care of if India is truly to join the ranks of other developed nations. As I mentioned in the beginning, the grocery store chain, Krogers, has decided to invest in the property market rather than attempt to run it’s traditional retail operation in the hope of understanding the Indian situation better before attempting to take over the retail food sector.

Clearly, the Indian government feel it is time to become a world player, with the active encouragement they are giving to foreign property investors now. I just hope they don’t throw the baby out with the bath water.

BBC News
The BBC coverage of recent protests is here
National Alliance of Street Vendors
The NASVI advocates for the basic rights of vendors and street vendors to sell their commodities It gives them a platform to unite together and to raise their voice for their just demands and rights.