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INTEGRATED URBAN HOUSING STRATEGY

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					                        International Workshop on
                 Integrated Urban Housing Development
                         Rugby 17-18 March 2003




                 INTEGRATED URBAN HOUSING STRATEGY
              EXPERIENCES OF A SECONDARY TOWN – ALWAR
                        Stuti Lall & Vinay D. Lall 1




Society for Development Studies
Regional Network for Knowledge Infrastructure of Asia Pacific and Arab Regions

India Habitat Centre
Core 6A, IInd Floor, Lodhi Road, New Delhi-110003
India Habitat Centre
Telephones: (91-11) 24699368, 24656164 Fax : (91-11) 24699368, 24699369
E.mail: sds@nda.vsnl.net.in
Websites: www.sdsindia.org www.sdsindia-urbanindicators.org


THIS DOCUMENT IS AN OUTPUT FROM THE PROJECT FUNDED BY THE UK DEPARTMENT FOR
INTERNATIONAL DEVELOPMENT (DFID) FOR THE BENEFIT OF DEVELOPING COUNTRIES. THE
VIEW S EXPRESSED ARE NOT NECESSARILY THOSE OF THE DFID.




1
 Professor and Director, respectively, Society for Development Studies (SDS). Key project team members, who are
community development specialists include Sabbus Joseph and Archana Mishra. Research inputs during benchmark
survey and for Alwar LUO also provided by other faculty members of SDS.
                             INTEGRATED URBAN HOUSING STRATEGY
                          EXPERIENCES OF A SECONDARY TOWN – ALWAR

                                                    TABLE OF CONTENT

1.   The Challenges of Addressing Development .................................................................... 3
  a. Towards Integration ............................................................................................................ 3
  b. Basic Toolkit for the Integrated Approach ........................................................................... 4
  c. Structure of the Paper ......................................................................................................... 4
2. The Challenges of Urbanization and Urban Poverty ............................................................ 5
  a. Urbanisation Impacts and the MDGs .................................................................................. 5
  b. Shifting Attention from Cities to Secondary Towns ........................................................... 6
  c. New Dimensions of Urban Poverty ..................................................................................... 6
  d. SDS Policy Research in Alwar ............................................................................................ 7
3. Single Sector to an Integrated Approach to Indian Planning ............................................... 7
  Development Dilemma ........................................................................................................... 7
  IUHP Partner Visions.............................................................................................................. 8
  Integrated Approach in Indian Planning Process .................................................................... 8
4. Alwar Integrated Urban Housing Project: Key Components and Strategies .......................10
  a. Origin of Project Concept, Components and Strategies .....................................................10
  b. Objectives of IUHP ............................................................................................................11
  c. Development Process of SDS Strategy .............................................................................13
  d. The Testing Ground -- Alwar .............................................................................................14
     Delhi Darwaza ...................................................................................................................14
     Toli ka Kuan .......................................................................................................................14
     Ramgarh ............................................................................................................................15
  e. Key Activities .....................................................................................................................15
  f. SDS Partners .....................................................................................................................17
5. Alwar Project : Outputs and Impact ...................................................................................18
  Key Outputs...........................................................................................................................18
     Project Community: Income and Shelter Development ......................................................18
     Project Community: Human Capital Formation ..................................................................18
     Knowledge Dissemination Process ...................................................................................18
     Policy and Strategy Documents .........................................................................................19
  Impacts..................................................................................................................................19
  Operational Problems ............................................................................................................21
  Lessons Learnt ......................................................................................................................21
6. Conclusions and Development Strategy ............................................................................23
  a. Major Conclusions .............................................................................................................23
  b. Operational Principles .......................................................................................................24
  c. Replication of Integrated Strategy ....................................................................................24
  d. Dissemination Initiatives of SDS ........................................................................................25
  e. Vision of SDS ....................................................................................................................25
  f. Vision of the Community ....................................................................................................27




Society for Development Studies                                                                                                            2
1. THE CHALLENGES OF ADDRESSING DEVELOPMENT


    a. Towards Integration
        The traditional approach to development has been basically single sector oriented in the
developing countries of the world. In India, in the early stages of the development planning
process, there were, however, a few attempts to link up one or two components of activities
within a sector. It was much later that attempts were made to integrate some of these
components but they were largely uncoordinated, having no sequence in the flow of
development inputs.2 The integration was often a political palliative, an attempt by governments
to keep up with the Jones, rather than to reach the benefits of an integrated approach to the
target groups. Evidences of this approach have been seen across the world and India is no
exception. The basic reason for this was no agreed upon concept of integration. In the absence
of that, it was used as per the convenience of a situation. The limited resource availability was
most probably the real reason for this approach.

 In India, there were some isolated attempts made during the latter part of the 1980s and in
early nineties to bring about an integration in the real sense, of trying to bring together
development components not only from within a sector but also from inter-related sectors. The
mechanism for this process was not yet established and the 1990s may be considered to be
nascent period for the effective integration process in India. This was spurred by the
Constitutional Amendments in early nineties, that provided opportunity to address local level
development issues by the local bodies and the application of integrated approach could be
tested and its impact felt.

Society for Development Studies (SDS) has been in the forefront of policy research work since
the mid eighties to bring out effective inter-sector integration in development programmes.3 This
has been particularly in the context of developing and promoting affordable housing solutions at
the lower end of the housing market, as well as developing poverty reduction programmes that
would have a sustainable impact.

The policy research work brought out clearly the non-sustainability of the traditional single
component approach in addressing the challenges faced by the poor and the vulnerable. A key
contributory factor to the ineffectiveness of a single component strategy was the thrust on
specific components, ignoring the externalities of the impact and target achievement in terms of
numerical strength. The planners and decision makers till early 1990s did not recognize the

2
  For details see IUHP Project papers: Lall Stuti, 2003, Employment Strategies For the Poor in India: Search For
Sustainability (SDS); Stuti Lall, 2002, Housing for the Poor & Urban Development: The Indian Dynamics ( SDS, &
ITDG Working Paper No. 4)
3
  A few illustrative policy research studies include: Lall, Vinay D, 1980, Housing Finance in India, NIPFP; ---,1985, A
Specialized Housing Finance Institution for Maharashtra, SDS,; ---,1987, Informal Sector in the National Capital
Region, SDS;--, 1988, Saving Mobilization for Housing, SDS;---, 1988, Informal Sector and Development Strategy:
Meerut & Panipat, SDS; Majumdar N.A. & Vinay D. Lall,1992, Satellite Banking and Micro Business Development
Corporation and Financing the Informal Sector, SDS; Lall, Vinay D, 1992, Informal Sector in Alwar: Status,
Development Strategy and Action Plan, SDS; Lall, Stuti, 1992, Urban Poverty and Micro Enterprises: A Case Study
of Sikkim, SDS; 1992, Lall, Vinay & Suri, Ajay, Informal Sector Housing and Economic Activities in NOIDA: Status,
Strategy and Action Plan, SDS; 1992, Lall, Vinay D, Housing Development Strategy for Alwar: Status, Policy and
Action Plan, SDS; 1997, Lall, Stuti, Capital Formation in Human Settlements of the Urban Poor, SDS; 1999, SDS,
Rehabilitation Programme for Slum Households on Delhi MRTS Alignment Route, SDS




Society for Development Studies                                                                                      3
concern for sustainable impact. The challenge, therefore, was to change their mindset, without
having a recognized process in hand.


b. Basic Toolkit for the Integrated Approach
          The basic requirement was to fine tune the concept of the integrated process, first in
terms of nature of components to be included and the process through which they would be
converged and then test the concept/approach through demonstrative projects The challenge
was to identify the process that would result in higher reach out of the target groups in terms of
the basic objectives within the limited budgetary resources of the government, and the way
initial seed resources of the government was likely to attract resources from other projects,
programmes, departments and agencies within and outside the government. The challenge, in
effect, was to explore how a multiplier impact of resource flow may be stimulated, and most
important, how project/programme outputs may have sustainable impact, extending to the post-
programme period. Governments have started recognizing the need for sustainable impact of
the programmes and were keen to get over the malaise of repetitive addressing of the same
target groups covered by the programme. The output of a more effective and sustainable
impact had to be demonstrated to the key decision makers to consider and hopefully, to accept
the integrated approach in the development process for the constituency of the poor.


c. Structure of the Paper
        This paper first develops the perspective by examining the impact of urbanization in the
developing world, reflected in the changes in the dominant contributors to the growth of GDP,
the magnetic pull of urban centres, and the emergence of the new phenomena of urban poverty,
with manifestations hitherto unknown. This perspective is followed by providing an insight into
the five decades of planning in India, where the thrust has gradually shifted from a single
component approach to multi-component approach towards the development of the poor and in
some cases, an integrated approach, bringing poverty as an integral component of development
programmes, rather than as an appendage. In this context, an insight is provided subsequently
to the policy research work of the SDS in Alwar district in particular, where SDS conceived of an
integrated approach and formulated a strategy during the late 1980s and early 1990s. The
detailed components of the strategy are elucidated, which were advocated among senior
decision makers in the country and at several international development fora.

The fourth chapter presents the components of the Integrated Urban Housing Development in
Kenya and India project (IUHP) and its implementation strategy. The Alwar-specific project
approach and its key departure from the concept of ITDG, the UK partner institution, is
presented, along with the process of convergence in the approach of project partner institutions
in India and the UK and Kenya, based on the ground level realities emerging from the project.
The fifth chapter presents a few illustrative outputs and the impact that the project components
have had on some of the project partners in the town, particularly with reference to the change
in their income generation activities, and transfer of some of the enhanced incomes to
development/upgradation of their shelter, and most importantly, the effective empowerment of
the project partners, particularly the women, through the process of the project. Some of the
operational problems and key lessons learnt are also presented.

The sixth chapter brings out major conclusions and operational problems and outlines the post-
project agenda to promote the integrated strategy. SDS initiatives in extending the integrated
strategy in India and its dissemination and promotional activities within the country and outside


Society for Development Studies                                                                 4
are briefly documented, along with the vision of SDS and the partner community for the next
decade. The change in the mindset of the community is indicative of the process of effective
empowerment through the IUHP.



2. THE CHALLENGES OF URBANIZATION AND URBAN POVERTY


a. Urbanisation Impacts and the MDGs
          Urbanisation has been the greatest change agent in the last millennium. The process of
urbanization is being progressively recognized as a major stimulant of economic activities that
have two clear impacts. First, the pace of economic growth of cities and the contribution of the
urban economy to the GDP gradually overtakes the traditional major contributor, the rural
sector. The second well-established impact is the magnetic pull factor of increasing economic
activities that brings in migratory forces from the rural areas, and also from urban centres that
are still way behind the development process of the key pull urban centres.

Along with economic prosperity, there are growing areas of deprivation, which, are recognized
as manifestations of poverty. The irony of urban-led growth is that it has invariably brought
increased urban poverty. As a result, the phenomena of urban poverty has emerged as a major
global challenge of the urbanizing world and has, in the process, brought to focus new
dimensions of poverty hitherto unrecognized In the context of the Millennium Development
Goals (MDG), it is appropriate to focus on urban poverty, striving to halve it by 2015.

Some indicators of poverty dimensions are captured in the mushrooming of slum and squatter
settlements and their impact on the urban economy. Over time, the city within a city syndrome
has become a typical urban scenario, inducing governments to go in for a cities without slums
campaign, without adequately recognizing the ground realities of urban poverty and deprivations
on the one side, and increasing in-migration of the rural and small town poor into the cities in a
democratic, open door country level environment, on the other. This is the common scenario
across the developing world and had existed in the developed countries, where the slums/ poor
habitats did not disappear through slogans or campaigns but through the benefits of economic
development filtering to the rural and small town settlements. The challenge of urbanization in
this millennium is to see that similar benefits of urbanization flow across all types of settlements
in the developing world.

To an extent, the habitat part of the urban deprivations has been highlighted due to the
presence of UN-HABITAT and the dogmatic approach of urban planners towards urban
housing. The crux of the issue is lack of purchasing power of the segment of the population,
termed as the urban poor. There is no champion institution that highlights the income plight of
the poor and solutions to it. The ILO is mainly engrossed in the welfare aspects of the labour
force but not the spread of income. Hopefully, the MDG focus on urban poverty might stimulate
an effective global onslaught.




Society for Development Studies                                                                   5
b. Shifting Attention from Cities to Secondary Towns
              It is in the above context, that the focus of urban research needs to be shifted
from the study of the processes of urbanization in the mega cities and the metro cities to the
smaller ones where poverty is manifested primarily in income deprivations.

This Paper shifts the focus from the major urban centres to an emerging urban centre, a typical
small town in India, located midway between a mega city (Delhi) and a metro city (Jaipur). In
fact, there is a national strategy of Government of India to develop this urban centre, Alwar in
Rajasthan State in India, into a counter magnet to Delhi, that would decongest the capital city of
India by absorbing potential migrants to Delhi, as well as inducing people from Delhi to shift out
to a growing urban centre. The challenge is to transform the secondary town of Alwar into a
dynamic urban growth centre. The growth process cannot be through the usual route of large
industry and commerce alone and may require other growth stimulus, a challenge that has to be
addressed in this millennium across the world, if urban poverty has to be halved by 2015, as per
the MDG.

c. New Dimensions of Urban Poverty
            The characteristics and dynamics of urban poverty in the secondary town of Alwar,
(population 0.26 million, 2001 Censes) are different from those of metro and mega cities in the
country. The employment characteristics of majority of the people in secondary towns are
traditional economic activities, handed down through generations and carried out as a way of
life rather than as economic activities involving entrepreneurship. To an extent, this attitude is
due to their housing situation, generally owned by the family and for which they did not have to
make efforts, opposite to the case in mega/metro cities where acquiring shelter is a major
concern and there has to be income to support this process. The poverty is due more to
inadequate employment, the over supply of labour for activities in the context of the local
economy and lack of other income earning opportunities. This has led to stiff competition among
the suppliers for capturing the limited market demand, resulting in further lowering of the
incomes. The plight of the women is worse. The economic reality forces them to look for income
generating opportunities and the strong social stigma does not allow them to earn income
outside the residences. The outcome is that they become the easy prey of exploitation by the
providers of income opportunities.

The causes of poverty are low productivity and limited value added components in their
production processes and there are no opportunities to find a solution. Equally important factors
are the high levels of exploitation from input suppliers (raw materials, credit) and limited markets
(limited range, and deep entrenchment of middlemen). As a result, urban poverty is reflected in
the poor being outside the first stage of extreme poverty (hunger poverty) but continuing to
remain around the poverty line for generations. In sharp contrast, even the poor in mega/ metro
cities get opportunities to get out of these poverty-driving factors.

Housing poverty in these settlements, is not a manifestation of poverty, as is the case with slum
settlements in the cities; it is inadequate housing, which has come to stay with the poverty
scenario. The manifestations of inadequate housing are largely in the deprivation category
such as open defecation, open drainage and sewage system, irregular water supply from
common public taps, poorly ventilated shelter, high density/minimal per capita living space,
integration of kitchen and living/sleeping room with the resultant air pollution and
bronchial/asthma consequences, and almost zero level access to open spaces around the
habitat. The positive feature of the habitat of the urban poor is a secure title to the home
inherited from forefathers, who may have been provided a piece of land by the then



Society for Development Studies                                                                   6
Government (the royalty), around the royal palace, largely to provide services to the royal
families and key officials of the Maharaja. Since that period, the size of families and population
of the town have grown phenomenally, but there has been no serious attempt to develop the
habitat environment or provide habitat services.


d. SDS Policy Research in Alwar
         As part of the policy research work for development of the economic pace of Alwar town,
on behalf of the National Capital Region (NCR) Planning Board, SDS undertook a series of
micro level studies to explore the growth avenues in these towns. These studies assessed that
the growth process was not likely to be sustainable through the establishment of large-scale
industries or distribution centres for products from outside. Several industrial groups in the
country had acquired highly subsidised land for setting up new industries, but many of them had
subsequently withdrawn or have kept the land untitled largely due to lack of appropriate
infrastructure, including social infrastructure and trained manpower4. Lack of natural resource
base for large scale industry, proximity to major production centres and high level connectivity to
the rest of the country have been recognized as key operational constraints to use the
traditional routes of production and distribution as process to urbanization. Tourism prospects
existed but on a limited basis and could not stimulate growth on a stand-alone basis. The SDS
studies, however brought out the potential avenue of growth process to be the economic
activities in the informal sector, taking the advantage of the traditional skills of the local people,
which had been developed over generations.

These studies also brought out the fact that improved shelter and better utilization of the social
infrastructure, especially the education services, was dependent upon improved levels of
income. Hence in any process of empowerment, the start may have to be income enhancement,
and not necessarily shelter upgradation as often perceived.

In a way, the development strategy recommended by SDS to the NCR Planning Board is Alwar-
specific, but it may be relevant to other secondary towns, as they also have similar challenges
to be addressed with respect to housing, basic services and employment. The SDS strategy is
based on rejuvenation of traditional crafts and inducting into them and other small scale/medium
scale economic activities, the element of enhancement of productivity and value addition.
Building an economic infrastructure and a composite credit instrument were major conceptual
developments that SDS recommended in its development strategy that seeks to address
poverty reduction through the process of productivity.



3. SINGLE SECTOR TO AN INTEGRATED APPROACH TO INDIAN
   PLANNING


Development Dilemma
      The basic dilemma in planning for development in the developing part of the world is to
make a choice from among a multitude of development claiming sectors, often having equal

4
 The NCR Planning Board expert committee on social infrastructure has examined the social infrastructure
deficiencies and recommended a strategy for NCR Regional Plan, 2021.


Society for Development Studies                                                                            7
development priority and inter-sectoral linkages. But due to resource constraints, there has
been very little alternative to the choice of a single sector development or a component of it. The
concept of phased development also came up in this context. As such, stand-alone
programmes have been the fashion, un-integrated with other related sectors of the economy
and ignoring the impact of the externalities on other sectors.

The obvious problems associated with this approach brought into the planning jargon
“integrated planning,’’ the connotations of which have varied widely in the absence of an agreed
upon definition of it. The term has been used as per the convenience and conceptual
understanding of the planners. Generally, clubbing up of a few sectors/components in one
programme has been taken as integrated planning. If the ultimate objective of all planning
efforts is improvement in the quality of life, then sustainability of the desired impact should be
the parallel objective and that can be expectedly achieved when the premises are rooted to the
ground level reality From this point of view, an integrated approach to development planning
has a better chance of achieving the goals as the inter-sectoral dependency is recognized and
all input interventions are considered in one go and planned as per the resource affordability.


IUHP Partner Visions
        Coming to the IUHP, which is an action research project, SDS has been closely involved
in hands-on experimenting for the last three years. The objective has been to reduce poverty
through adequate and secure shelter, which can be the base for developing human capital and
at the same time can help securing credit for income generation.

SDS has been advocating an integrated approach to poverty alleviation through income and
shelter provision, especially in the urban context since the mid-80s on the basis of its practical
experience from the housing studies across the country. The advocacy laid stress on raising the
income of the poor first for subsequently achieving secured and sustainable shelter that need
not be transferred under the duress of inadequate income and can be a source of collateral for
credit that would have multiplier effects on income and shelter upgradation. While irregular built-
up areas do have a negative impact in the form of spoiled urban built-up image and do have
negative environmental impact, inadequate income directly affects the poor and does have a
number of undesirable fall outs on the urban economy as a whole, creating a non livable city
situation. It degenerates the urban economy and leads to inevitable proliferation of informal
sector activities that economists in the developed countries would be loath to accept. The
Global Shelter Strategy (GSS) of the UNCHS (Habitat) (now UN-HABITAT) brought out the
need for an integrated approach to shelter and income generation. The main focus was
however limited to habitat and the means was income generation within the housing sector.
The IUHP project goes beyond the GSS concept of integration of income generating activities.


Integrated Approach in Indian Planning Process

         In the Indian context, there seems to have been no agreed upon views on the integrated
approach to development planning, especially in the poverty sector. In the development
literature, the term is often referred to as combination of related inputs, for achieving a common
goal. In the case of poverty alleviation, the general approach in Indian planning has been an
isolated one. This is true even with components of a poverty scheme, having targets under
each of them. A major part of Indian planning exercises in poverty alleviation had been scheme-
oriented, be it in the area of income generation or housing provision. The reflected failure


Society for Development Studies                                                                  8
outcomes of this approach are in footloose economic activities; high fall back rate to poverty
trap, poor housing conditions and high transfer rates of shelters. At the policy level, the causes
of poverty, especially urban poverty, have been recognized as income shortfall and inadequate
shelter that covers street shelters to slum dwellings. The basic truth about poverty is the low
hold-on capacity under this situation due to inadequate income and as such, the shelter
becomes the first bet for liquidity that creates a vicious circle of income shortfall and reduced
quality of housing. A housing programme for the poor, therefore, needs to be preceded by an
employment generation programme that would sustain shelter development. From early 80s,
SDS has been propagating this approach as the only sustainable approach to poverty
alleviation, which also showed a clear integrated relationship between income and housing.

An analysis of the poverty programmes during the last two decades in India indicates a parallel
approach to the development components for the poor. There were every component of
development and yet the poverty incidences did not go down. In the case of shelter intervention
programmes, the areas of our interest, the findings of all programmes converged on one
common point, namely, the infallibility of increasing the capacity of the poor to make the housing
programmes sustainable.

Looking at the reasons for unsustainable public programmes, the absence of urban policy in
India could have been a contributory factor. A more important reason could be the continuance
of the old system of compartmentalized development of different sectors and absence of
effective coordination mechanisms in place. The institutional set up that could help the poor in
getting into the sustainable path of development also seems to suffer from the same cultural
infections. An integrated planning paradigm was initiated in the nineties in India with the 74th
Amendment to the Constitution. It introduces decentralized governance that is expected to
address the poverty issues through a bottom-up process and a one-window system. The
commensurate results are still awaited. What happened is that in-spite of new institutional set
ups being in place in majority of States in India, the mind set of the bureaucrats refuses to
accept the system in its real spirit.

However, there are few successful examples of integrated housing projects in the public sector
in India that show sustainable results in housing, achieved through income upgradation routes.
It is however to be noted that most of them did not start with an integrated approach and
sometimes were not in planned sequences, as would be desired under an integrated concept.
Trial and error process is more in order than the planned interventions and the results had
different shades of success.

There are also examples of successful one-component low-income housing projects that
achieved the full-scale benefits of an integrated approach without planning for it. The project did
not plan for income generation component but the location of the Project helped employment
generation that increased the capacity of the households to retain the houses and that made the
project sustainable.




Society for Development Studies                                                                  9
4. ALWAR INTEGRATED URBAN HOUSING PROJECT: KEY
   COMPONENTS AND STRATEGIES

a. Origin of Project Concept, Components and Strategies
        As part of its research output dissemination process, SDS had made a presentation on
its multi-faceted strategies for addressing the challenges of urban poverty at an UNCHS/UNDP
Seminar in Florence in 1997.5 The SDS model of integrated shelter and income programmes for
sustainability of poverty alleviation initiatives was brought out with case studies of slum
settlements in a mega city, bringing out the inherent failure factors of a stand alone housing
programme and the success factor, emanating from linking shelter development with an income
programme. This model attracted the attention of the Intermediate Technology Development
Group (ITDG), a UK NGO, and the IUHP was formulated and has been implemented in Alwar
and Nakuru, through funds provided by the Department for International Development (DFID),
Government of the United Kingdom under its Kari programme.

A joint action research project involving SDS and ITDG was initiated. Keeping in view the time
period of the Project and other logistic problems in a mega city, the Indian project was launched
in a small town in the vicinity of a mega city (Delhi) and a metro city (Jaipur), and which offered
a soft option in terms of shelter ownership by the poor. The hypothesis to be tested was impact
of adequate housing on income poverty or vice versa. By dint of the integrated concept, the
same groups of the poor were to be tested from both angles. The second project location is
also a secondarysmall town, in the vicinity of a mega city-- Nakuru, in Kenya, with population
size and proximity to a mega city (Nairobi) almost identical to Alwar.

At the time of formally launching the project in Alwar in September 1999, SDS had already had
an established relationship with the local government and the urban poor communities in Alwar.6
The base for this partnership had been developed over a period of about 10 years during the
SDS policy research work in Alwar for the National Capital Region (NCR) Planning Board, the
Government of India’s regional planning and development agency. The NCR has been
entrusted with the responsibility of stimulating and sustaining an induced urban growth in
secondary towns around Delhi to develop them into counter-magnets to the mega city of Delhi.7

SDS had prepared an Integrated Development Strategy for Alwar in the early 1990s on behalf of
the NCR Planning Board to promote an induced growth in Alwar.8 Five economic activities were
identified for development. These were leather-based products, stone-based products, carpet
weaving, pottery, and light engineering goods. The strategy was developed after an in-depth
assessment of the existing pattern of operations of households engaged in these activities,

5
   Lall, Vinay D & Stuti Lall, 1997, Shelter and Employment in Informal Cities – Indian Experiences,            Paper
presented at International Forum on Urban Poverty–Practical Approaches to Urban Poverty Reduction, Florence,
UNDP/UNCHS
6
  During the pre-project launch period, SDS developed Alwar level work base, in the District Administration,
including the District Collector, District Planning Agency (Urban Improvement Trust), local government (Alwar
Municipal Council) and other potential partners. UK partner organizations, ITDG and DFID also interacted with SDS
and visited prospective project sites in Alwar and, along with SDS had consultations with the District Administration.
SDS also interacted with ITDG partners during meetings in Rugby and Nairobi in connection with other
programmes/projects.
7
  There are some prospects of outputs of the IUHP project being incorporated in the NCR Regional Plan 2021, to
become operational soon, as Director SDS was Chairperson of one of the Expert Groups for preparation of this Plan.
This was on Social Infrastructure, which included informal economic activities, slums, among other components.
8
  Lall, Vinay D.1992, Informal Sector in Alwar: Status, Development Strategy and Action Plan, SDS


Society for Development Studies                                                                                     10
identification of major development prospects and constraints, and evaluation of the peoples’
self-assessed upgradation plans and development requirements. The basic concern was to
promote and support value added component in economic activities and thereby raise
productivity of the common people, as SDS assessment brought out this approach to be the
most appropriate route to alleviate poverty on a sustainable basis, rather than provision of
subsidized inputs and grants. The issue was not creating employment, as the poor were already
employed, but recognizing that the employment was not appropriate in the context of effectively
alleviating poverty and seeking to address this aspect of poverty.

Taking this strategy a step further, SDS policy research outputs on informal sector, poverty
alleviation and housing for the poor, came to the conclusion that for implementation of the
strategy, an integrated housing and economic development approach was probably the most
effective and sustainable route for low-income households to access adequate, safe and secure
shelter and come on to the path of economic empowerment. An exclusive one-component
programme has been generally found non-sustainable.9 An exclusive income generation
programme suffers from the lack of a stable habitat, resulting in lack of motivation to save and
also builds up spendthrift habits. In the case of the informal sector economic activities, lack of
habitat exposes the workers to the critical problems of storage of inventory materials, semi-
finished and finished products, forcing duress sale and loss of income. It is in this context that
an integrated income and shelter programme has been formulated. Chart A depicts the
analytical scenario of an exclusive housing and exclusive income generation programme, along
with the components and the process of an integrated approach towards sustainable
development.

The IUHP project provided an opportunity to the SDS to test its strategy of integrated income
generation and housing upgradation on a pilot basis.

b. Objectives of IUHP
         The objective of the project is to reduce urban poverty in a sustainable fashion. through
the routes of income and housing which are the two most important voids in the lives of the
poor. The hypothesis behind this approach is the empirical evidences that show the general
increase in the hold-on capacity of the poor and the quality of life, when one has access to
adequate shelter for the simple reason that it not only provides environment for human capital
formation and workplace, but also provides a collateral base for higher income generation
activities. In turn, higher income helps retaining the house and access services to it. The action
research brings out the inadequacy of providing only secure tenure and access to housing credit
to the poor, without being accompanied by income enhancement strategies.

The Project strategies are aimed at developing sustainable livelihood for traditional artisans as
far as possible within the known environment and on the basis of the existing human, social and
economic capital of the communities. The facilitation process was primarily aimed towards an
approach of self-sustained development, the fruits of which can be enjoyed by the community,
without the support of the facilitators. It is in this context of sustainability, the housing upgrading
component was introduced so that it can be a collateral for future development inputs. The
facilitation process comprised of adult literacy, numeric skills, saving and credit management
skills for dealing with more than one credit line without default, decision-making skills,
technology upgrading, and market exposure.

9
 For the formal financial system, the urban poor were a high risk clientele who were provided credit only under
special directed credit programmes of the government. The housing finance institutions considered the urban poor
as credit untouchables.



Society for Development Studies                                                                                    11
      The specific short term and long term (post-project) objectives of IUHP are:
         Short Term Objectives
        To create improved income opportunities for the vulnerable and below poverty line

     Chart A: Single Sector and Integrated Approaches to Sustainable Development



                                               Traditional Approach
                                                Single Component




ONLY HOUSING                                                          ONLY ECONOMIC ACTIVITY

 High default rate                                                      Footloose situation
 High transfer rate                                                     High conspicuous consumption
 Poor economic                                                          No collateral to borrow
conditions                                                               High fallback rate to poverty status
 Low savings                                                             with withdrawal of subsidized inputs.
                                             Development of
                                                income
                                           generation activities

                                                                              Promotion of         Self-Help
    Housing upgradation                                                       Groups
 leading to enhanced QOL


                                               Integrated Road Map to
                                                     Sustainable                                 Skill
      Mainstreaming the                             Development                               upgradation
       market outlets




                                 Co-ordinated
                                 linkages with the                 Community ownership
                                   programme                         and participation




     Society for Development Studies                                                                  12
     Segments of artisan community, specifically the project partners chosen from these groups.
   To facilitate other micro-entrepreneurs in accessing the development inputs such as
     Composite credit, marketing network, technology and skill training.
   To improve the basic shelter and work place facilities with the enhanced income of the
     project partners and in coordination with the District Administration.
  To document the process of successful integration of income and shelter programmes and
    disseminate the same.
Long Term Objectives
 To upscale the Alwar experiment for developing the secondary towns and rural settlements
   in India and reducing the scale of migration to the major urban centres, often the
   consequence of poverty in the secondary towns and rural areas.
   To improve productivity and enhance standard and quality of life of project communities
   To integrate sustainable patterns of income generation with housing upgradation and
      programmes for provision of basic facilities
   To promote the integrated approach through official programmes in India and abroad

c. Development Process of SDS Strategy
          Income enhancement has to be the starting point of the programme. The process can
be achieved through two stages. The first is the hike up in productivity and second, the value
addition. The road map for achieving the two stage results is access to technology and related
skills, raw materials, and equipments to use the new skills. A materials bank can be a key
infrastructure as the required materials may not be locally available; also this infrastructure
helps reducing the cost of materials. Institutional credit needs is to be also inducted to make the
production process operational. In short, a total economic infrastructure is to be developed,
where in the initial period, the high priced equipments are accessible on rental basis. This is a
new component, as normally the focus is on provision of physical infrastructure components
only.

The income-led housing upgradation approach was developed on the basis of long standing
experiences of SDS in the housing and income generation process through the non-formal
sectors. These experiences pointed out the benefits of secured tenure and acceptable quality of
shelter that provides protection against income vulnerability, encouraging savings habits, and at
the same time, accessing mainstream credit for further income generation. Access to key
information or knowledge is a critical starting point for formulating and implementing this
strategy, very much in line with the KaR programme objectives. For policy makers, the Project
is a reminder of the imperative of integrating the informal sector activities with urban poverty and
other development programmes to attain an inclusive urban society.

The test of viability and sustainability of the income component would be in the market.
Provision of information, escort services in the initial period to access the markets, exposure
visits and participation in local and outside fairs and exhibitions are part of this component of the
project.

The shelter transformation is to be achieved through a housing upgrading/delivery strategy that
depends on higher level of income generation on a sustainable basis. Unlike in the case of the
income enhancement component, where productivity and market exposure routes were
suggested by SDS to the project partners (but steps to implement them only undertaken after
groups of partners - Self-Help Groups, SHGs - agreed), in the case of the shelter component of
the project, no specific shelter standard was pre-determined or the selection process and time
schedule pre-determined. SDS left these decisions to the partners and its strategy was to


Society for Development Studies                                                                    13
provide information on possible areas and types of upgradation that may be considered by the
community. This approach was the major difference in the early stages of the project
implementation between SDS and the ITDG.


d. The Testing Ground -- Alwar
        Alwar, a heritage town situated 160 km south of Delhi and 140 kms north of Jaipur,
amidst the foothills of the Aravallis in Rajasthan, has traditionally been the home of artisan
communities mainly engaged in stone carving, pottery and leather embroidery.                The
communities flourished under royal patronage but after the withdrawal of this support base, the
community became vulnerable to market changes and could not develop coping strategies to
protect them from falling into the poverty trap. Addressing urban poverty is among the priorities
of the District Administration, which has entered into a partnership with the SDS to support the
Project, in expectation of a policy product that may be replicated elsewhere in the District of
Alwar as well as in the State of Rajasthan. In this context, the District Collector is the
Chairperson of the Project Steering Committee, which was formed by SDS right in the
beginning. This Committee includes key government departments.

 The Project locations are mainly in old settlements, that suffers from inadequate basic services
and characterized by fast deteriorating quality of shelters. As such, the need for upgrading the
shelters in terms of structure is not as urgent as is in squatter settlements in mega cities. This is
a common scenario in majority of secondary cities in India. The major challenge is addressing
their income shortfall situation. In this perspective, the Alwar model, if effectively implemented,
holds scope for replication elsewhere. From the Indian planning perspective, the objective was
to develop an approach to small town development that may be recommended to the Planning
Commission and the NCR Planning Board as a                secondary town development model for
consideration in the Tenth Five Year Plan of India and the NCR Regional Plan 2021, both under
preparation at the time of launching the project, as well as in other developing countries.

The project locations in Alwar town included Delhi Darwaza, Toli Ka Kuan and Ramgarh.
Settlements. Majority of the artisans in these locations have inherited skills. The artisans in all
the trades are highly vulnerable, due to stiff competition from other product items, non-access to
cheap raw materials, technology, and sources of credit.

                                         Delhi Darwaza
        Delhi Darwaza, known for the highest concentration of shoe makers in Alwar city, falls in
the category of a slum in the old city area under the jurisdiction of Municipal Council of Alwar. It
is inhabited by 1,200 households, out of which 70 percent are engaged in shoe making. The
tough competition, along with the shift in the raw material markets to distant locations and
development of a strong marketing network of middlemen forced the artisans to degrade their
status from self-employed entrepreneurs into daily wage earners. Over 50 percent of families in
the Delhi Darwaza area were found to have a monthly income of less than Rs.1,300 (20 pounds
steering), and 60 percent survived on just one meal a day.

                                          Toli ka Kuan
This is a 150 years old settlement of potters in the city centre and a good number of master
potters in India hail from this settlement. Pottery making is in the gene of every community
member, be it a 8 year old child or a 70 year old woman. At present, there are 120 households,
out of which only 50 percent has been able to retain their ancestral occupation in pottery. The
rest has adopted non-home based occupations mainly because of lack of space within the


Society for Development Studies                                                                    14
settlement. The scarcity of space is evident from the densely built houses, spilling of pottery
activities on the road crossing and setting up of kilns on the public lanes.

The entry to the settlement is so narrow that heavy vehicles can not reach the door steps. As
such, there is no scope for the potters to take up bulk orders. The potter community has to
satisfy themselves with the small income from the local market where the demand is for the
basic pottery such as water filters. They obtain the raw materials from a plot of illegally occupied
land at the city periphery. The potter community in Toli Ka Kuan is engaged in negotiations with
the local government for legal ownership of the land. For this purpose, they have formed a
cooperative.

                                                     Ramgarh
        Ramgarh, located 16 km. away from Alwar city centre, has been traditionally a pottery-
making centre. The major problem here is the absence of space that debars the members of
the community from accessing modern technology. About 80 percent of the families working
here have major problems relating to scarcity of work place. Also, most of the potter families,
although possessing traditional skills, have virtually no link or exposure to the external markets.
A 100 percent dependency on middlemen for marketing the products has made them captive
producers and led to a highly exploitative situation, thus reducing the capacity of the community
to invest in social infrastructure. Nearly 70 percent of families in Ramgarh live in non-permanent
shelters and have no access to piped water.

e. Key Activities
         The most crucial activity of the Project was identification of project partners from among
the community members. This was done with the help of a baseline survey. Due to the limited
coverage of the programme, the random sampling procedure was not adopted. Instead some
features relevant to the project objectives were considered for identification. Say, for instance,
only those households (HH) who were occupying the house on ownership basis were selected
and tenants on rent were excluded, on the consideration that the latter HH would not be in a
position to join the shelter upgrading programme. The income poorest were excluded due to
similar reason. The project strategy was firmed up through a consultative process with the
District Administration and community partners.10 Three hundred households were selected for
the required output of 200 skilled participants, who would have improved income with the help of
project interventions and would upgrade the housing condition. The drop out rate during the
project period has been less than 5 percent.

The project partners were selected from four traditional activities namely, pottery, leather and
textile embroidery and weaving. The most challenging job was to institutionalize the participants
into common interest groups. The objective was to make their presence felt in the district
administration and in the open market. However, acute shortage in the demand for services in
comparison to the supply, has led to a state where the social network among the community
10
   Subsequent to the commencement of the project, SDS was appointed by the UNCHS as the Global Training
partner and Regional Partner institution for Asia-pacific and Arab regions for the Global Urban Observatory
Programme and in this capacity, SDS took the initiative to explore the potential for replication of the project strategy
and the response has been encouraging. Also, an add on component in the IUHP was establishment of a Alwar
Local Urban Observatory (LUO).




Society for Development Studies                                                                                       15
members has been totally damaged and it was difficult for them to sit together and think in terms
of common objectives. To change this mindset, SDS adopted the method of group savings, that
needed a number of joint decisions on the saving related issues and lending to the group
members. The skill training centre offered the scope of learning together. The social benefits
were no less interesting. The child mortality and pregnancy rate rates were reduced
significantly.

Twenty one Self- Help- Groups (SHGs) formed on the basis of common interests of the
selected group members, are partners of this programme. Eighty per cent of them is women
and majority belong to the weaker social groups. The benefits in terms of income
enhancement, empowerment in terms of skills negotiation with the district administration and
banks and decisions on the nature of products suitable for sale, further skill enhancement and
cost sharing as also now upgrading of housing components are remarkable.

The actual action research started with the implementation of the pre-conceived coping–up
strategies and observing pattern of responses, on the basis of which, modifications in the
strategies were to be made. The notable capacity building components having direct impact
on the participants, included diversification and upgrading of occupation skills for the same and
new products, adoption of new technology (electric wheel in place of hand wheel, upgraded
kiln, to reduce rate of breakage and wastage, electric sewing machine in the place of hand
machines),      training for entrepreneurship and sustainable saving habits, multiple credit
management and general banking. Apart from these, capacity enhancement strategies such as
registering the participants with the State and Central governments institutions for benefits of
marketing the products, networking with other development agencies in the state for design
and technology related information and study visits were adopted.

Regarding the housing components of the Project, the challenge was to convince the project
partners to undertake shelter upgrading programmes within the Project time line. This appeared
to be unachievable even two and half years after the Project was launched. The partners,
especially the women, were not sure of the sustainability of income generation. and they hold
strong reservation on housing upgrading without sustainable means. Moreover, significant
variations exist within the ownership groups and each of them involved different problems. The
major issue was the joint family ownership of the houses where the inheritors live separately
and hence the intervention would not be legal, and more important, no shelter credit would be
available. The Urban Improvement Trust of Alwar had shown interest in rectifying the draw back
but withdrew after noticing the small number of applicants. The third major groups own the
house sites legally as agriculture land and hence would require conversion of the plot, the cost
of which is very high and there is meager chance of availing the basic services even after the
re-conversion.

Another extreme case that represents the inadequate housing finance market for the poor is
that of a group of potters, who have legally owned land in Alwar. In view of the increased size of
the community, they are not in position to undertake pottery in their cluster. They have saving
and land collateral but no financing institution that is ready to finance them. This is mainly due
to the seasonal nature of their job ,which does not provide them uniform affordability
throughout the year. Actually, the crux of the issue is that these loans are non-profitable for the
banks due to small amount and high administration cost; and according to the bankers, these
are high risk loans. In the case of income generating loans, there is only one scheme for the
general poor and another for the backward classes and resources are very much limited.
However, the artisans are not eligible for these loans as they do not fall in the category of the



Society for Development Studies                                                                  16
officially defined poor. As such, the dependence on the indigenous money lenders is still in the
range of 60 to 80 percent.

While income prospects have increased and some of them are now connected to export market
also. A large number of potters from Ramgarh belong to this category. The women in
embroidery work have further training in embroidery with the help of electric machines and
supply regularly to local markets.

 As in February, 2003, the shelter development activities include change in cooking fuel for
lesser pollution, construction of individual and community toilets for few, construction of
separate kitchens (from living rooms), and improved drainage services. The limited scale of the
Project provides no incentives to the city authorities to undertake any general habitat services.

In this context, the establishment of Alwar Local Urban Observatory that created a common
platform for city stakeholders to meet and examine their priority problems and find out ways and
means to address them, should be helpful. This has been an add-on activity of SDS, as part of
its global mission to promote and develop systems for a participatory process in local
governance.

The most critical activity was to provide the partners with exposure to the markets, to
understand the demand and market requirements, as well as understand the economies of their
activity, pricing system, and potential of their growth processes. Participants were taken to
exposure visits within Alwar town, in few places within the District and few other places
outside, including in Delhi and Jaipur. An important activity was to link them to the formal
banking system and access them to credit. Participants have purchased their own equipments
and learnt the responsibility to service the bank loan and obtain second and third loans, after
amortising the earlier loan. All along the process of implementation of the project, training was
also imparted on the basics of accounting, maintaining ledgers, fixing prices of product,
negotiating prices of products, searching for new markets, working together in a group. Literacy
was later included in the training agenda, in response to the wishes to the partners and the most
effective indicator of its effectiveness is number of members whose signature was a thumb
impression -- 80 percent in pre-project period to only 10 per cent in January 2003.

Another activity was providing information on areas of shelter improvement, with the focus on
those aspects that have a bearing on health and quality of living, reducing the stress and strain
on women in performing their household responsibilities and safeguarding their privacy and
safety. The tenth activity was facilitating the project partners to undertake shelter upgradation
programmes. As in February, 2003, the shelter development activities include change of
cooking fuel and methods, construction of toilets, building of separate kitchens (from living
rooms), and improved drainage services.

f. SDS Partners
The key project partners include:

DFID, UK Knowledge & Research (KaR) programme
Intermediate Technology Development Group, U.K.
National Capital regional Planning Board
Alwar District Administration
 -Urban Improvement Trust,
 -District Industries Centre



Society for Development Studies                                                                17
 -District Rural Development Agency, and others
Local Artisan communities
Local Media and the Private Sector
Banking System

The partners have lived upto the expectations. The District Administration has been closely
associated with the project. The District Collector has chaired the meetings of project partners
from the government, banking system, and the community, and also when external partners
from ITDG and DFID visited Alwar. The proactive role of the District Collector has facilitated
access to the formal credit system, the partnership with the Nagar Parishad (Municipal Council)
have facilitated access to water connection for the toilet, the partnership with the banking
system has accessed credit to the artisans, the partnership with the private sector has opened
new market outlets without the middlemen, and the partnership with the media has obtained
good coverage of the project activities.


5. ALWAR PROJECT : OUTPUTS AND IMPACT

Key Outputs
        The IUHP in Alwar is reasonably well established. The evidences of outputs in both the
components of the project, income generation and housing, are available. To an extent, there
are also evidences that suggest an element of sustainability of impact. Apart from outputs that
are quantifiable, there are others of a qualitative nature, that are reflected in the confidence
building of the project partners and improve QOL.

The major outputs include:

                   Project Community: Income and Shelter Development
Upgradation and diversification of skills of 250 project members
 21 Self-Help Groups covering 283 partners
50 profitable micro enterprises
Use of new technology and equipments
Ownership of new equipments
Public & Private Market Linkage to 60 percent of project partners
45 improved housing
Over 100 participation in exhibitions, fairs, exposure visits

                            Project Community: Human Capital Formation
Reduced dependency syndrome
Change in mind-set : from subsidy and grant habits to market oriented
Empowering women partners through literacy, skills and income earning training inputs
Training in accounting, negotiation skills and pricing strategies
Building self-confidence to interact with buyers, government officials, DFID, ITDG

                                  Knowledge Dissemination Process
Researched Papers on urban development, low-income housing, poverty alleviation,
employment and planning – Contributions to Literature
Dissemination of project strategies and outputs through papers, seminars, workshops, media,
Expert Committees across India and abroad
Alwar Local Urban Observatory


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                             Policy and Strategy Documents
An Urban Poverty Reduction Strategy that is self-sustaining, without a subsidy
component and fully managed by the community
A Secondary Town Development Model, that would be relevant to urban growth
process where large-scale industrialisation route is not feasible
A Knowledge-based Strategy to Urban Development and Management.
An Empowerment Strategy for the poor and marginalized communities and to wean
them away from the dependency syndrome.


Impacts
        The evidences on impact of income generation component, the first stage of the project,
is clearly indicative of an element of sustainability of the project inputs of group formation,
knowledge dissemination among project partners, building of savings and loaning practices,
linkages with formal banking system, exposure to new technology, skills and markets, and most
significantly, building the self-confidence of the people.

Evidences have started emerging of the implementation of the second stage of the project, the
shelter upgradation component. Savings from enhanced income are being used for shelter
development, but the constraints of this stage have been well identified. The constraints include
absence of a project component to finance the shelter development activities. Savings from an
income programme, as in the case of income generation from formal sector avenues, is
adequate as seed money for a housing programme, and is expected to be supplemented
through a home loan support or liquidation of asset holdings. The community requires access to
housing credits, but this was not provided in the project and the existing housing finance system
is not reachable to this category of potential home loan aspirants. The project period is also
short to assess the sustainability of the impact of this component from the long term
perspective.

As a result, the shelter improvements are rather limited in scope and content. The heartening
thing is that the evidences support the hypothesis that improved income status stimulates
shelter upgradation. The process has been initiated among the project partners to now consider
shelter upgradation components. Women partners have taken the lead in starting this process.
In Delhi Darwaza, which is a highly dense old city area and holds little scope for introducing any
major change that would demand space, women partners are investing a part of their enhanced
incomes to changing their kitchen pattern and replacing the traditional fuel (wood and animal
dung, both environmental and health hazards) with modern fuel (gas). Some have also
improved ventilation in the kitchen and some others who had some open space, have gone in
for a separate kitchen, away from the living room. They have also recognized the need to
improve their sanitation system, and go in for individual/community toilets (replacing the open
defecation system). A few are contemplating to strengthen or extend vertically their structures.

The development of a community 8-seat toilet complex in Budh Bihar has brought out the
process of community coming together for a common cause when they perceive a win-win
situation for all the members. The process is slow but the lesson learnt is that a participatory
process has to be inculcated within the community and that nothing would come free. The
community members have provided some common land for this purpose, and have entered into
an MOU with SDS regarding land, finance, and management of the complex, while the Nagar
Parishad has agreed to extend water supply from a nearby source to this facility. The


Society for Development Studies                                                                 19
community has also worked out how to share the construction activities and to increase their
savings for this purpose. The complex has been completed and only 50 percent of construction
and materials cost was provided by SDS through the project funds. The community has taken
the responsibility to manage the complex. This low cost sanitation facilities is the result of 25
project partners coming together and over a 100 members of the community would benefit. This
toilet complex has had a good demonstration effect and several other community groups have
expressed an interest to also develop a participatory programme of developing low cost
sanitation and SDS has agreed to be a facilitating partner.

Another constraint for undertaking housing development/upgradation is the scarcity of space
within the housing unit. Over generations, the per living space of extended families has become
an operational constraint. From the income generation aspect also, space has become a major
constraint for the home-based activities like pottery. Women who have diversified into textiles
embroidery have also found this a limitation, as they could undertake leather embroidery in
open common spaces, but textiles embroidery cannot be undertaken in the open, due to the
fear of affecting the quality of the product (dust and other factors); also, the use of sewing and
embroidery machines needs covered space, and the latter also electricity.

The potters, who require shelter-attached work place, are keen to explore the prospects of
acquiring land at the town periphery to develop new integrated shelters and workplace, which
would have fuel-efficient kilns and better storage facilities. They have gradually recognised the
ground reality of getting out of the subsidy syndrome. The negotiation with UIT for sale of land
is on.

The Project has already upgraded/diversified the skills of 250 project partners through
continuous training on different aspects of individual trades, focussing on enhancing productivity
and diversification. Four-fifth of these partners are women. Apart from imparting training on the
basic production skills, other components of capacity building have related to micro enterprise
management, including loan management, product designing and marketing, and building
negotiation skills to communicate with all partners, including the District Administration. No pre-
conceived or standard capacity building module was followed. In each activity, the curricula
were developed with the help of experts in the respective fields, consultations with the
community and the assessed absorbing capacity of the project partners. Flexibility was a
guiding principle in the skill development process.

Skill upgrading was linked with building potential market networks for prospective products of
the project partners. In the first stage, SDS has interlinked the communities with the public
sector organisations that have established sales outlets; building the partnerships with the
private sector and global markets is now on the agenda and these market avenues will be
established before the completion of the project. Reducing the role of the middlemen, building
community skills to search and tap new markets is a continuing process. Community members
were in the forefront in direct negotiation and sale of their products during two District Melas
(exhibitions) in Alwar during February, 2002 and February 2003, and in a a Rajasthan State
level mela in Jaipur in January, 2003, in each of which SDS was provided display and sale
stalls. Women partners were exposed to such an experience for the first time and learnt the
art of price negotiation. An encouraging feature of the Jaipur exposure was the first export
order received by SDS project partners.




Society for Development Studies                                                                  20
Operational Problems

       Access to the financial system is a major bottleneck. The SHGs continue to save and
access bank loans, many more than one loan, and repayment has been highly credible to
encourage bankers to provide further loans. But while income linked saving and loan
programme has gathered some momentum, it is not adequate to access large amount of loan,
required for a housing programme. The project had not provided any credit component for the
housing activities and no housing finance institution is inclined to come in. Space for housing
extension and enlarging income generation activities is another major problem.

Some of the operational problems were recognized during a DFID review meeting in Alwar in
December, 2001. The District Administration, recognsing the need to develop the work
environment and installation of equipments and other services, volunteered to provide land to
build a crafts center (Shilp gram) for supporting and encouraging all components of activities,
from training in skill development, work space, equipments, storage facility, materials bank, and
product display and marketing facilities, as also some type of hostel facilities for craftsmen
coming from far off places in the Alwar District. The SHGs had been highly encouraged by the
prospects of a shilp gram in the near future and responded by increasing their own savings,
through higher income generation and cost savings. Two of the trades had explored new
product designs and outlets and requested additional skills training, whereas the potters from
Toli ka Kuan initiated the process of planning to shift from the town centre to a new location on
the periphery, after lengthy negotiations with the UIT for some cheap land.

DFID appreciated this approach of the project partners, especially the community and the
District Administration and indicated possibility of some initiating support for building a full
economic infrastructure. The subsequent developments that precluded additional funding for the
project has, to an extent, put a damper on these initiatives. There is a fear that once the present
District Collector, who has made a commitment to provide land, is transferred from Alwar, the
whole process of provision of land being provided may be pushed back.

Lessons Learnt
The lack of a credit component for both the project components, income and shelter
programmes, is a major operational deficiency for effectiveness of an integrated project. In the
IUHP, there was a budget for the income component but none for the shelter. One of the
lessons learnt is to have a housing credit component. Alternatively, the project time schedule
has to be long enough to establish adequate income growth to be able to access institutional
housing finance.

The Alwar experience clearly brings out the fact that relationship between income generation
and housing upgradation is not as straight or simple as was originally assumed in the Project.
While the role of income in housing cannot be denied, and some positive relationship is found
between the two in squatter households in mega cities across the world, there are other
important factors that affect this potential direct relationship between the two in other
settlements of the poor, especially in old settlements in secondary cities in India, where a large
section of the people have become neo-poor due to the sliding down of economic activities.
Alwar is a classic example of this emerging urban scenario, that had been indicated in the SDS
strategy but not yet sufficiently documented.




Society for Development Studies                                                                  21
The last three and half years’ experience in dealing with nearly 300 low-income households in
Alwar brings out the urgent necessity of generating a substantially higher income level in a
sustainable manner if the project objective of housing upgradation is to be achieved. It is
because of the inheritance law that informally entitles some space in a house (depending upon
the number of co-sharers and size of the house), that the intensity of housing demand may
appear to minimal, but the problem of housing shortage remains, along with the problem of
inadequacies in housing facilities.

The project partners, while recognizing the benefits of improved shelter, and also
having their own perceptions on priority upgradation components in their present shelter,
have made it clear to the SDS, on their shelter development programme. They would only
take up this activity when income improves substantially and they would feel confident that
the improved income levels are not a temporary phenomenon, supported through the
present project, but would continue after the project partners like the SDS would opt out,
an intention that has been often conveyed to them by SDS.

Apart from the need to have more housing units, a lesson that has come out from this policy
research work, is the immediate challenge to address the several deficiencies in terms of
services, both on-site and off-site, in traditional housing of the poor in secondary towns. These
units were constructed for a different era and were not obligated to provide services now
considered essential to maintain the habitat and urban environment. Generally, these houses do
not have a separate kitchen, sanitized toilets, treated water supply at the door step and have
open drainage. This is a habitat scenario evident across the State of Rajasthan as well
as in most parts of India and the developing world. Urban management in this millennium
has to take up this responsibility.

The project has brought out a range of avenues through which the present income level
can be improved to a significant extent. Interventions are required to reduce and preferably
eliminate the role of the middleman in supplying the inputs and marketing the outputs,
upgrading technology and skills to undertake higher value added products and raise
productivity, upscaling operations to benefit from economies of scale, accessing storage
facilities and high-cost tools and equipments, marketing outlets, among others.

In leather embroidery, it was estimated that elimination of middlemen would immediately
improve income by 50.0 percent and other interventions in areas of skill and technology
upgradation and extension outreach to markets would further improve incomes several
folds. Individual credit intervention and training in business management (as the project
perceives) is found to be not enough. Non credit supports, which SDS terms as economic
infrastructure, is essential to make the activities viable. Similar requirements have been
evident in the potter groups, which has seen a sharp improvement in productivity and
incomes through access to new technology and skills and market outlets. They also
require suitable economic infrastructure and market reach out avenues.

To introduce the desired interventions and make them viable, the project needs to be scaled
up. It was in this context, the idea of setting up of a facilitation complex, a Shilp Gram (an
Artisan Complex) in Alwar was mooted by the District Collector in the workshop in Alwar held
on December 3-4, 2001. The District Collector assured all support to implement the project
at the District level and the officials of the UIT, District Lead Bank, NABARD and DIC
offered     their inputs to attain the objectives of           the Facilitation Centre/ Economic
Infrastructure. In fact, right from the beginning, the Project had envisaged the development of
an economic infrastructure, which was first recommended by SDS to the NCR Planning


Society for Development Studies                                                                22
Board as far back as in 1992, in its pioneering work on the Alwar Informal Sector as
the development path for secondary towns.

Perhaps a general lesson is that it takes time to identify what the economic activities are (old or
new) that have real potential for income generation in towns like Alwar. Raising incomes is not
something that happens suddenly; besides, the project partners quite rightly argued that
increased incomes needed to be sustained for a while, before they could risk further
investments. Consequently, there has not been sufficient impact yet on improvements to
housing or services. It takes time to save enough to do so; this could have been speeded up by
access to credit, but this has proved to be a major bottleneck.

In Alwar, the main thrust has remained on income generation, to further boost the target group’s
potential to get involved in housing or services. But awareness has now been raised on the
latter issues, and there is now a renewed appreciation of the importance of income generation
in that context. This is now starting to pay off in the area of sanitation which is perhaps the top
priority. There is also a steady empowerment of the self-help groups. They have learned to
negotiate for better and cheaper services, starting with the community, but then also with
contractors.

        There has been an improvement of 150-200 percent in incomes in the case of over 35
percent of the project partners and for the rest, the improvement is in the range of 40-50
percent. This process needs to be stabilised for ensuring sustainability in the post-project
period.


6. CONCLUSIONS AND DEVELOPMENT STRATEGY

 a. Major Conclusions
        The global challenge of the present century is to address the concerns of poverty in its
multi-faceted dimensions in a sustainable way that yields positive results beyond the project
period. The approach to poverty reduction has long ago crossed the stage of calorie intake,
income improvement, or housing. The fashionable integrated approach has also lost its
significance as it is often interpreted as combination of interventions without inter-linkages. The
focus is now on dimensions of adequacy of shelter, access to basic habitat services, gender
equity and reducing social vulnerability, among others. The ultimate objective is to add to the
quality of life. A strategy to address poverty has to be responsive, inclusive and dynamic, taking
into perspective the emerging new dimensions of poverty in a functionally integrated manner.

A new challenge is to shift away from the project-oriented approach of the government and
donor agencies that in effect often ends into target-hunting activities and global campaigns.11
SDS-ITDG Integrated Housing Project provides an alternative route to poverty reduction that
breaks the tentacles of dependency, builds the capacity of the community through access to
information, and replaces targets with sustainable impact. Putting aside tight pre-determined
strategies, targets and time lines and inducting flexibility in these components within a broad
agreement on goals and time frame is an important policy contribution.



11
  There is a growing view among countries where poverty concerns are serious, that much of the designing of these
campaigns fail to capture the ground realities. The IUHP outputs in Alwar may be useful in this context.


Society for Development Studies                                                                                 23
Another on-going policy research work of SDS is building an information-based road map to
project management and good governance, which would further contribute to sustainability of
poverty progranmes         through more effective coordination and convergence.12 Effective
implementation requires a strong management expertise, that is facilitated with updated,
validated information and indicators at the segmented level, say, the sub-city level (wards,
administrative districts), and high level of analytical expertise to use these indicators as tools for
project monitoring and performance auditing. Searching the web and spontaneously building a
long list of monitoring and evaluation indicators has to replaced by building capacities among
communities to build their own set of indicators.13

b. Operational Principles
        The operational principles which have emerged from the analysis of the evidences of the
action research study are:

 Initiating the programme with an open mind
Not attempting to rush through a programme on a community
Weaning the vulnerable groups from the dependency and subsidy syndromes and
developing capacity to own the projects
Nurturing community unity for negotiating and accessing development inputs
       Accessing community to information & knowledge on all aspects of development
       Using information and knowledge to facilitate and promote coordination, convergence
and resource leveraging, specific to selected activities and locations


c. Replication of Integrated Strategy
        SDS is of the view that a pilot project, as in Alwar, is useful to bring out the relevance of
an approach and components of a strategy, validating some of the conceptual and policy issues
that may come out from research and consultations with policy makers. But a small pilot project
cannot provide the base for any generalisation. It may provide, at best, guidelines, which need
to be further fine tuned to raise the level of confidence in the policy makers to use the
new/modified strategy.

In this context, SDS was keen to mobilize support to extend the coverage of poor households
to relocate and modify the Alwar experiments. The initial outputs of the innovative urban poverty
strategy drew the attention of the Ministry of Textiles, Government of India and SDS was
requested to develop a similar strategy for rural areas. SDS selected a set of semi-urban/rural
complexes in Alwar District. The strong base of it in Alwar was an important consideration for
replicating the strategy in the same District so that the trained manpower of IUHP may be
inducted as trainers, facilitators and change agents in the rural programme. A bench mark
survey of 1,500 households was conducted during May-August 2002 and from among them,
640 partners (3,000 members) have been included in the policy research action project. 60
SHGs have been formed and saving and internal loan programmes initiated. A major proportion
is of women artisans.


12
   See, for example, Lall Vinay. D, 2002, Building Partnerships through Knowledge Infrastructure-led Coordination
and Convergence: A Road Map towards Good Urban Management and Governance, SDS; and SDS-World Bank,
2003, Innovative Strategies for Urban Management: Bangalore City Report, SDS (in press)
13
   Another SDS action project, in partnership with Environ, a UK NGO, and also funded by DFID under the KaR
programme has developed a toolkit from the perspective of communities in the poverty category. For details, see
Community Sustainable Development Indicators, SDS 2001



Society for Development Studies                                                                                     24
The proposed use of the IUHP trained Artisans as trainers and motivators is a part of SDS
upscaling strategy as well as a dissemination and application process to other projects. The
process would, among others, bring out the type of skill transfer process that may have to be
developed, learning from own peers, understanding possible barriers and constraints in the
transfer process and coming out with a strategy that could possibly become a role model of
learning from within the group.

d. Dissemination Initiatives of SDS
        Dissemination of outputs has been a continuing activity of the SDS. This strategy not
only creates awareness among the potential users of this policy research outputs and vets
their appetite to know more, but also paves the path for new partners and resources to enter in
this area. Several seminars and workshops were held during the project period to disseminate
outputs and the Alwar project was made an integral part of SDS course curriculum in its national
and global training programmes.14

A major dissemination initiative was undertaken in June 2002 at another level, the Heads of
Diplomatic Missions in New Delhi from countries in Africa at a Indo-Africa Partnership initiative
of the Ministry of External Affairs, Government of India. Director SDS was invited to address a
group of High Commissioners and Ambassadors and their senior colleagues from Sub-Sahara
Africa, on Poverty Alleviation Strategies and Practices in India. The Alwar project was
highlighted and reference was also made to the work in Nakuru. Many diplomats have shown
keen interest to consider adopting the Alwar approach to poverty reduction in their own
countries and would be taken to visit the project. Countries that showed keen interest include
Mauritius, Kenya, Namibia, Zimbabwe, Sudan, among others.

SDS has initiated a Comparative Study of Innovative Poverty Reduction Strategies in India,
China and Indonesia. This policy research work is sponsored by LOGOTRI, a network of
Training Institutions in the Asia-pacific region, supported by UN ESCAP. The Project Director is
the Programme Director for the Alwar component of IUHP. While SDS will bring together major
innovative approaches to poverty reduction in India, which will culminate in the Alwar strategy,
researchers from Urban and Regional Development Institute (URDI) in Jakarta and China
Training Centre for Senior Civil Servants in Beijing will prepare their country Reports on a
common framework. This will provide an opportunity for dissemination of Alwar results across
the Asia-pacific region.

e. Vision of SDS
       The review of the employment processes in India over the last half a century has
brought out the changing methodologies from time to time, to address the global challenge of
generating sustainable employment and eradicating poverty. At different points of time, different
approaches were adopted and in their totality, it appears that no component that would be
normally included in a poverty reduction programme has been overlooked. The Indian
approach has been visionary, recognizing mistakes of an earlier period and seeking to modify
the approaches with feedback of the ground situation, suggestions of think tanks, and
experiences worldwide.


14 During 2000 and 2002, for example, three groups of officials from 16 countries in Asia-pacific region who were
participants in SDS annual 8 weeks programme on Need Assessment, Monitoring, Evaluation, and Information
Generation Techniques for Decentralised Governance were exposed to the project and also interacted with the
project partners from the community and the local government. In other training programmes also, the Alwar model is
invariably introduced, most recently in a 5 days programme in Hangzhou, China in November 2002.


Society for Development Studies                                                                                   25
While there has been a gradual shift from a stand-alone or one or two component programme
for employment generation (wage labour, and in the case of self-employment, skill and credit) to
multi-component programme, the impact is not sustainable. A possible missing component is an
integrated economic infrastructure that would enable the participants in the income
generation/poverty eradication programme to shift the attention from merely generation of
employment units to direct improvement in productivity and value addition components in the
income generation programmes. SDS policy research work and the action research projects in
Alwar district (the IHUP project in urban areas and Government of India project in rural areas)
have demonstrated the effectiveness of this approach to induct sustainability. SDS vision is
based on this concept, which needs to be inducted in all poverty reduction programmes.

The Alwar project has demonstrated the far-reaching impact on the process of sustainability in
employment programmes, through a gradual linkage of proceeds of the income generation
programme in shelter upgradation. This process of linkage or integration of income and shelter,
has to evolve on its own and the process and time schedule for the transformation should be left
to the people themselves. The concept of integration may be a part of the development strategy
but no tailor-made scheduling of activities should be prescribed. The process of integration of
income and shelter, as in the case of Alwar town helps to understand operational constraints
and problems and the need to disseminate relevant information to the people. However the
IHUP Alwar town project is too small in terms of numerical coverage to generalize on an
integrated employment strategy. SDS vision is to extend the area of application of this
approach.

                   In this perspective, SDS has a 4 component vision:

 Upscale the Programme:
       In Same Economic Activities and Few Others
: In Alwar, to cover 2,500 potential micro business over next 3 yrs                :
: Other parts of Rajasthan
         : In NCR through NCR Regional Plan, 2021
         : In India through Tenth Plan
 Mainstream to Formal Credit System
         : Commercial Bank, SIDBI, NABARD, RMK, Govt Programme
         : Establishing a Micro-Credit Fund
 Mainstream to Major, High Value Markets
         : Major Commercial Outlets in India, Government & Private Sector
         : Crafts Melas/ Exhibitions across country
         : Global Market
 Model Entrepreneurs and Trainers
         : Alwar artisans to Launch capacity building & technical
             Assistance missions in Alwar, Rajasthan & elsewhere
         : Alwar artisans to become dynamic agents of change and
              development, effectively replacing SDS
        : Alwar Crafts Council and Crafts Training School
        : Alwar Shilp Gram (Artisans Complex)
        : Programme Partners to win National & Global Awards for
              Excellence & Good Practices




Society for Development Studies                                                               26
f. Vision of the Community

Interactions with the community project partners bring out the impact of the project on their
thinking process, aims and aspirations. A few illustrative examples are:

 Diversified and standardized product range
 Access to banking system
 Labour time-reducing through new technology
 Ten-fold increase in Income
 Shifting children from work to school
 Upgrading work place
 Improved access to water and sanitation
 Access to information
 Aspiration to read and write
 Getting exposed to new developments on a regular basis
 Desire to directly interact with the powers that be




Society for Development Studies                                                                 27

				
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