Peri Urban Dynamics in Hyderabad India

8/6/2019 Peri Urban Dynamics in Hyderabad India

1/15

Regional industrial policies drivingperi-urban dynamics in Hyderabad,IndiaLoraine Kennedy *,1

CNRS, Centre dEtudes de lInde et de lAsie du Sud (CNRS-EHESS), Paris, France

Received 1 July 2005; received in revised form 4 April 2006 ; accepted 5 June 2006Available online 16 February 2007

Between 1995 and 2004, regional political elites in Andhra Pradesh sought to transform

greater Hyderabad into a dynamic economic region oriented toward global growth sectors.Inspired by the infrastructure-led growth model, a dominant strategy consisted in fittingout, via publicprivate partnerships, specialised business/technology parks and attractinginvestment through carefully designed industrial policies. This study focuses on regional ITpolicies, with attention to the strategic use of peri-urban space and examines the constructionof HITEC City and other large-scale projects. Using a multi-level perspective, the Hyderabadcase is contextualised in relation to Indias recent adoption of economic reforms. Recent lit-erature on global city-regions and the development of global capitalism provides a macroframework for analysing the role of a provincial government both in initiating and drivingindustrial and urban dynamics. State re-scaling or re-territorialisation in particular is a compel-ling concept for interpreting the strategies examined here, which aim to promote the compet-itive advantages of Hyderabad in global economic processes by adapting institutional andregulatory infrastructures. At the micro level, the analysis focuses on how policies are played

out in peri-urban spaces, and the implications for urban governance are discussed. Althougheconomic strategies have been fairly successful, top-down decision-making practices haveeffectively excluded many local actors from the policy process, and the creation of special pur-pose enclaves in suburban areas has weakened prospects for the development of governanceinstitutions at the metropolitan scale. 2006 Elsevier Ltd. All rights reserved.

Keywords: Global city-regions, peri-urban dynamics, reterritorialisation, state re-scaling, urban governance, Hydera-bad, India

Introduction

Hyderabad is the capital of the southern Indian stateof Andhra Pradesh and constitutes the core of itslargest metropolitan area (population 5.7 million).Between 1995 and 2004, the state governmentsought to transform Hyderabad into a dynamiceconomic region oriented towards global growthsectors. Inspired by international models such as

infrastructure-led growth, a dominant strategy con-sisted in fitting out specialised business/technology

parks and attracting investment through carefullydesigned industrial policies.2

This study examines these recent state-led effortsto promote growth in Andhra Pradesh, a state of76 million people, with special attention to the impli-

*Tel./fax: +33-556-24-7115; e-mail: [email protected] Administrative address: CEIAS, EHESS, 54 Boulevard Raspail,

75006 Paris, France.

2 A preliminary version of this text was presented in New Delhi atthe international workshop on Peri-urban Dynamics: Population,Habitat and Environment on the Peripheries of Large, IndianMetropolises, organised by the Centre de Sciences Humaines andthe India International Centre, 2527 August 2004.

Cities, Vol. 24, No. 2, p. 95109, 2007

2006 Elsevier Ltd.

All rights reserved.

0264-2751/$ - see front matter

www.elsevier.com/locate/cities

doi:10.1016/j.cities.2006.06.001

95
mailto:&!emailxl1;[email protected]:&!emailxl1;[email protected]


2/15

cations for peri-urban spaces around Hyderabad.The transformations currently underway includethe emergence of new industrial and serviceactivities, the realisation of large investment projectsinvolving world-class infrastructure, and the con-struction of new housing colonies and commercialventures catering primarily to upper income groups.Using a multi-level perspective, the aim of this paper

is to analyse how regional industrial policies areplaying themselves out in Hyderabads peripheriesand their consequences for urban governance. Thiscase is situated both within its wider political andeconomic context and with regard to recent litera-ture on the renewed role of cities in post-fordist cap-italism. It is argued that recent developments inHyderabad, quite remarkable in the Indian context,are the outcome of a process of political assertion onthe part of the regional government in the sphere ofeconomic policy-making. The policies can be inter-preted as a strategy of re-scaling on the part of theprovincial state, in an attempt to adjust its actions

to the imperatives of the global economy. Throughsuch processes of reterritorialisation, similar to thatdescribed by Brenner (1998, 2004), the aim has beento make metropolitan Hyderabad a growth enginefor the entire region. These policies have been suc-cessful in many respects, attracting private firmsboth domestic and international and creating wealthand employment. At the same time, they have raisedimportant questions with regard to urban gover-nance. Private sector actors have emerged on thescene, for instance as builders and managers of infra-structure complexes, mainly through publicprivatepartnerships. In contrast, locally elected representa-tives have been largely excluded from the policy

process, as have civil society groups, learning aboutmajor decisions only after the fact. Large tracts ofperi-urban space are being transformed into specialpurpose enclaves, governed by specific regulatoryframeworks. By subdividing peri-urban spaces andincreasing spatial differentiation, such policies ap-pear to weaken prospects for governance institutionsat the metropolitan scale.

Method and context

The research presented here is based on informationcollected during several study trips to Hyderabadbetween 2002 and 2006. Although essentially an

empirical study, it engages with recent theoreticalliterature in order to interpret and situate localdevelopments. The method involves several layersof analysis. Although the study focuses on regionalindustrial policies and their interaction with themetropolitan region of Hyderabad, it is crucial toplace the analysis within the Indian context, whereeconomic liberalisation has spurred importantchanges and where the federal set-up requires takinginto account several superimposed spatial scales. Itshould be recalled that the state (regional) political

sphere is partly subsumed within the national polity,although separate elected bodies exist at each eche-lon (national, state, and local), and the Indian econ-omy constitutes an integrated market for allpractical purposes.

Indias economic reforms, adopted by the federalgovernment in 1991, constitute an important back-drop to this analysis because they have deeply af-

fected economic and political processes in thecountry at all levels. Of particular interest is the factthat as the federal government loosened its centra-lised control over the economy, some state-levelgovernments began taking initiatives to promotegrowth and attract investment, giving rise to regionaleconomic policies for the first time in post-indepen-dence history.3 Although macro-economic policiesremain the prerogative of the central ministries, ithas been convincingly shown that state governmentshave a decisive role to play in the reform process,with regard to both the scope and the pace (Jenkins,1999).4 Regional political elites are discovering that

they can craft their own strategies, prioritise theirpublic investments, and negotiate directly with for-eign investors. Between 1995 and 2004, Andhra Pra-desh stood out as one of the more pro-active states,and has arguably taken economic reforms furtherthan any other state.5

In addition to economic reforms, political devel-opments, notably the formation of coalition govern-ments at the national level, have given regionalpolitical parties greater influence in national affairs.Although it will not be elaborated upon here, thisevolution is important in explaining how AndhraPradeshs state government managed to assert itselfso effectively in both national and international fora.

Two facts are of particular importance: during theperiod under study, the government was led by a re-gional political party, the Telugu Desam Party(TDP), which had been demanding greater decen-tralisation from New Delhi since its creation in the1980s. Secondly, the TDP was a major partner inthe national coalition government between 1999and 2004, giving it a distinct advantage in its negoti-ations with the federal government.

From these brief remarks, it is apparent that eco-nomic reforms and political change are contributingto the emergence of new forms of governance in In-dia and this study is an attempt to examine this pro-cess. There can be no doubt that economic reformshave deregulated many aspects of production andtrade, facilitated private investment, including for-

3 India gained independence from Britain in 1947.4 As Sinha points out (2004), many state governments are

reregulating as the federal government delegates more and moredecisions to them, thereby leading to a new layer of bureaucracyand differentiated rules and regulations across national space.5 Although less far than the states political rhetoric would

suggest. See Kennedy (2004), Kirk (2005), and Mooij (2005).

Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

96


3/15

eign direct investment, all of which have increasedcompetition. However, it will be evident in thecourse of this narrative that state forces continueto play a crucial role in the economy at both the na-tional and regional levels where they are increas-ingly compelled to adapt to a more competitiveenvironment and to more stringent fiscal constraints.

It is in this context that Indian cities, after years of

neglect, are receiving renewed attention from pol-icy-makers at the central and regional levels.6 Onereason is that since the start of reforms, investmentshave concentrated in urban areas. The growing con-tribution of cities to national income, and their po-tential to act as growth engines have spurredefforts in recent years to improve basic urban infra-structures and strengthen municipal finance. It isstriking to observe how policy-makers have been in-spired by international examples, and how they areadjusting their strategies to global market condi-tions. As indicated above, one of the objectives ofthis analysis is to explore the ways that specific,

localised strategies interact with global economicprocesses. Recent theoretical work provides somecompelling insights and suggests a number ofhypotheses. It will be seen that whereas the Hyder-abad case validates certain trends discussed in theliterature it also diverges in some respects fromother contemporary patterns.

Interpretive frameworks

Much current literature on large cities and their artic-ulation with the global economy emphasizes theinfluence of exogenous forces shaping outcomes,especially footloose capital, multinational firms andinternational aid agencies. This is a compelling per-

spective for several reasons: it appears to corroboratethe widely held view that globalisation has led to a re-treat of the nation-state; it corresponds to percep-tions about the rapid changes taking place in largemetro areas in the developing world, such as themushrooming of commercial and entertainment cen-tres; lastly it explains the conspicuous presence ofmulti-national firms in places where they were previ-ously absent. However, this global forces perspec-tive tends to conceal the fact that public actors tooare actively shaping urban outcomes, taking the deci-sion to leverage their large cities to better attract glo-bal investment flows. States are rescaling their

internal institutional hierarchies to adjust to eco-nomic realities; state territorial power is being rear-ticulated and reterritorialised (Brenner, 2004).Following Brenner, whose work has focused on the

European context, cities are at once coordinatesof state territorial power, embedded within largerstate institutions, and sites of reterritorialization forpost-Fordist forms of global industrialisation wherethey function as nodes of accumulation in globalflows (1998: 3, 17). Concretely, this means promotingthe productive capacities of specific localised spacesin urban regions, for instance through the creation

of immobile assets like conference centres or enter-prise parks. This re-scaling hypothesis will be exam-ined here, in relation to emerging trends in Indiasmetro cities, which mirror those observed in other ur-ban regions that aspire to global city status.

The global city-region perspective also offers anattractive framework for analysing the Hyderabadcase (Scott, ed, 2001), although a closer examinationreveals an important discrepancy, which will be dis-cussed later in the paper. In this literature, city-re-gions function as the basic motors of the globaleconomy and their development is intimately linkedwith globalisation: They function as territorial plat-

forms for much of the post-Fordist economy (. . .

)and as important staging posts for the operationsof multinational operations. Above all, they areimportant centers for flexible-manufacturing sectors,as exemplified by high-technology or neoartisanalindustry, and for service sectors, . . . (Scott, 2001,p. 4). Like in the case of rescaling strategies, globalcity-regions are emerging as a result of efforts tostrengthen regional competitiveness and face thechallenges of globalisation. In most cases, this strat-egy involves consolidating the metropolitan territoryby bringing together fragmented territorial units inorder to build regional political competence (Scott,2001). It underscores the importance of political

leadership, of the state and other organised actors,both local and supra-local.

The term governance is used in this paper withthe following meaning in mind: Governance, as dis-tinct from government, refers to the relationship be-tween civil society and the state, between rulers andruled, the government and the governed.7 Giventhe particular focus of this study, Jefferey Sellersdefinition of urban governance provides a usefulcomplement by underscoring the economic dimen-sion of cities: actions and institutions within an ur-ban region that regulate or impose conditions for itspolitical economy (Sellers, 2002, p. 9).

Regional growth policies and Hyderabadsperi-urban areas

As indicated above, economic reforms and politicalchange are redefining relations between the federalgovernment and the states, and have effectively con-tributed to a form of political decentralisation. Fromthe point of view of the states, one of the trade-offs of

6 It may be recalled that one of the goals of centralised economicmanagement was balanced regional development and plannedurbanisation. Indeed, to avoid massive migration from the coun-tryside, and uncontrolled urban growth, policy-makers con-sciously strove to make large cities unattractive by blockingproductive investments and neglecting infrastructure (Dupont,2002, p. 73). 7 McCarney et al. (1995, p. 95), cited by Stren (2001, p. 205).


97


4/15

decentralisation is that they are required to take ongreater responsibilities in resource generation andsound fiscal management. States have reacted differ-ently to these opportunities and constraints and haveadopted various approaches with regard to empow-ering local governments including their largest cities.Most states, including Andhra Pradesh, have beenreluctant to cede significant powers to elected muni-

cipal councillors, or indeed to include them indecisions that directly affect their constituencies.Economic policies in particular are considered to falloutside the purview of local governments, althoughthe 74th constitutional amendment ratified in 1993advocates extending their functions to include plan-ning for economic and social development.

Soon after Chandrababu Naidu took over as ChiefMinister8 in 1995, the government of Andhra Pra-desh announced a series of policies to stimulategrowth and economic development. It openly en-dorsed economic reforms, which marked a rupturewith earlier practices and rhetoric of the TDP, and

indeed of previous Congress governments in thestate, both of which followed regimes that can bebroadly classified as populist.9 A detailed policy doc-ument released in 1999, Andhra Pradesh: Vision2020, put forth a new and comprehensive growthagenda based on a threefold approach consistingof building capacity, focusing on high-potential sec-tors to be mobilised as engines of growth, and trans-forming governance, namely ensuring transparencyand accountability of government and a strong voicefor the population (Government of Andhra Pradesh,1999, p. 10). The aim was to profoundly modify thestates economy in order to favour it integration intothe national and global economies. Clearly the idea

was to leapfrog conventional development stages,i.e. labour-intensive manufacturing, and take advan-tage of opportunities created by new technologies tobreak into knowledge intensive, high value addedsectors with strong growth potential.10 The tremen-dous capital investment required for this massiverestructuring project was to be provided by the pri-vate sector, while the role of the state was to facili-tate by providing a conducive atmosphere forbusiness, including administrative transparency andstrong legal institutions. Governance reforms werethus emphasised as part of the overall strategy forthe making the state an attractive place for business,

especially in the global growth sectors, where inter-national standards are considered de rigueur.

What is particularly relevant for the perspectiveexamined here is that the governments efforts topromote growth largely focused on cities, and onHyderabad in particular. It is not an exaggerationto say that in the decade from 1995 to 2004, Hyder-abads peri-urban areas provided a laboratory for

the implementation of several key strategies likeinfrastructure-led growth and a focus on globalgrowth sectors such as IT and biotechnologies.Although the spectacular development of the ITindustry in Hyderabad can be explained in part bythe presence of an existing industrial base11, themain reason is no doubt the policy thrust given byNaidus government. Indian and international entre-preneurs have responded positively to a series ofgenerous investment incentives including an attrac-tive location and state-of-the-art telecommunica-tions infrastructure.

Industry-friendly policies for the IT sectorNaidus government designed specific policies fordeveloping IT and related services. In 2002, theAndhra Pradesh government released a new ICTpolicy, replacing the 1999 policy, which outlinedincentives and investment subsidies available to IThardware and software industries, as well as to theIT service sector, called IT Enabled Services(ITES) (Government of Andhra Pradesh, 2002).The latter are also known as business process out-sourcing (BPO), and include such services as medi-cal transcriptions, accounting and billing services,call centres, and also engineering design. The policyextended some of the incentives to IT infrastructure

companies, such as those building IT parks, and totelecommunications companies.

Numerous incentives were designed to attractinvestment to the IT sector, many granted automat-ically, such as: exemption from purview of statutorypower cuts, exemption from inspections under mostlabour laws12 in exchange for self-certification, andpermission for three-shift operation. Incentives thatare not automatic but for which a company may ap-ply include: a 25% rebate in power tariff, a 50%reimbursement of registration fee, stamp duty andtransfer of property duty, exemption from zoningregulations, and a rebate on the cost of land. (Gov-

ernment of Andhra Pradesh, 2002). The last twoitems are particularly relevant for this study, as theyhave a direct impact on peri-urban spaces.

8 This position is the regional equivalent of a Prime Minister.9 The TDP was founded in the early 1980s as an oppositional

force to the Congress party, which had dominated state politicswithout interruption for about thirty years. The TDP was largelyconstructed on the basis of Telugu regional identity, whichcrystallized during the colonial period and combines linguisticand territorial dimensions.10 It was proposed, for instance, that agricultures contribution tostate domestic product be reduced over twenty years from 33% to12% and that the service sectors contribution be increased fromnearly 50% to 67%.

11 Interview by author, J.A. Chowdary, former director of theBangalore and Hyderabad branches of the Software TechnologyParks of India, in Hyderabad, 23 November 2002.12 These include: The Factories Act 1948, The Maternity BenefitAct 1961, The Contract Labour Act 1970, The Payment ofMinimum Wages Act 1936, The Employment Exchanges (Com-pulsory Notification of Vacancies) Act 1959.


98


5/15

IT software units have been exempted from mostzoning regulations including those designated asconservation/agricultural use, residential use, com-mercial use and institutional use, and from paymentof conversion charges (Government of Andhra Pra-desh, 2002, Annex IV). IT parks, including thosedeveloped by private builders, are also exemptedfrom these same zoning regulations, with the excep-

tion of land designated for agricultural use, and herealso land-use conversion charges are waived. It isinteresting to note that these parks must meetcertain conditions laid out in the policy i.e., mini-mum area of 4000 square meters, provision of tele-communication infrastructure such as optic fibreconnectivity, and access to the satellite earth station(Government of Andhra Pradesh, 2002, pp. 910).100% on-site power back-up to support office equip-ment and lighting must be provided, and in terms ofamenities, all buildings must meet minimum floorspace and floor to ceiling norms, and provide air-conditioning and parking, as well as 24-h security.

With these strict mandatory requirements the stategovernment clearly wants to ensure a minimum levelof quality in infrastructure, to meet its claim thatHyderabads IT environment meets internationalstandards.13

Rebate on government land

A rebate in the cost of land is a key provision of theIT policy linking financial incentives in the form ofland rebate to employment creation. IT companiescan receive a rebate of 20,000 Rupees14 per job cre-ated, to be put toward the cost of undeveloped land.In order to avail of the rebate, a minimum number of100 employees must be hired.15 Interestingly, the

policy also includes an incentive for paying highersalaries: for employment to be considered, the mini-mum gross salary must be 5000 Rupees per month.

The land rebate provision clearly illustrates thegovernments direct participation in identifying spe-cific zones in which IT companies can establishthemselves, and its willingness to use public re-sources, here government-owned land, to buttressits growth policies. The rebate only applies to landsallotted by the government and its agencies, primar-ily the Andhra Pradesh Industrial InfrastructureCorporation (APIIC), the main body in charge of

developing industrial estates and facilitating largeinvestment projects. In the case of Hyderabad, theplots offered by the government are located mainlyin the peri-urban areas on the citys periphery. Inparticular large tracts have been reserved in the wes-tern periphery for specialised parks, like HITECCity (cf. below), where numerous large firms haveset up office space on extensive campuses.

Policy-makers in Naidus government gave partic-ular emphasis to ITES, which has a greater capacityto create employment and where Hyderabad is con-sidered to have strong potential. This is a fast-grow-ing sector in the global economy, around 60% peryear for off-shore, and India is well placed to benefitfrom this market.16 According to data provided by agovernment agency, Hyderabad had the fastestgrowth rate in India for ITES between 2000 and2002, measured in terms of export value of services.It should be noted, however, that in absolute valueterms, its exports were far behind the National Cap-ital Region (including Delhi, Gurgaon, and Noida).

Hyderabads advantages include a large number ofgraduates (B.Sc/B.E./B.Com), and relatively lowerwage rates than other metro cities in the country.In order to promote this fast-growing sector, ITESwas declared as an essential services industryand companies are authorized to operate 24 hoursa day, 7 days a week, 365 days a year. Among finan-cial incentives for this sub-sector, an investment sub-sidy of 20%, up to a limit of 2 million Rupees(approx. 354,400 Euros), is available. To meet the la-bour requirements, the government set up a subsi-dized training facility specifically geared for callcentre operations.17 This pragmatic stance offers fur-ther evidence of the states determination to actively

steer the growth process, and not wait for marketforces to lead.

Building HITEC City on the periphery ofHyderabad

In addition to creating a conducive policy environ-ment, Naidus government was the main driving forcebehind the realisation of HITEC City i.e., HyderabadInformation Technology Engineering ConsultancyCity, a large-scale industrial park dedicated to ITand related activities. HITEC city is situated about20 km from the centre of Hyderabad, towards thewest, and approximately the same distance from theairport (see Figure 1). It is the result of a public

13 The ICT Act includes a second list, which outlines optional butdesirable amenities for IT parks that include a food court and ahealth club (equipped with an aerobics studio, games area,karaoke lounge . . .). It is stated that large parks (over 1,000,000square feet or 93,000 square metres) are expected to plan forresidential, retail and entertainment infrastructure (Government ofAndhra Pradesh, 2002, p. 11).14 One Rupee is worth approximately 0.019 Euros, or expresseddifferently, one Euro is worth about 54 Rupees (January 2006).15 Companies availing of this rebate are not eligible for otherincentives such as investment subsidy, exemption of stamp duty,etc.

16 It is estimated that India captured 55% of the total market ofoutsourced services in 2002. The sectors most concerned are banksand financial services, followed by telecommunications andindustry.17 According to an official interviewed in early 2003, the govern-ment saw its role here as temporary and planned to withdraw assoon as private sector companies came up to take over. Interviewby author, Sulaksh Dikshit, AP First manager (marketing), 3 April2003.


99


6/15

private partnership (PPP) between the government,through the APIIC, which provided the land in theform of equity, and a private promoter, which man-ages the park. Located on a large campus, nearly65 ha, the concept and site are explicitly modelledon successful international examples (Hsinchu Sci-ence-based Industrial Park in Taiwan, and Research

Triangle Park in North Carolina). The main architec-tural features of the first phase of HITEC City arethree large office buildings: Cyber Towers, a ten-story futuristic high-rise inaugurated in November1998, Cyber Gateway, a larger complex completedin 2001 and Cyber Pearl in late 2004 (see Figure 2).In this same locality, the government is involved ina second large-scale PPP called Mind Space cover-ing 45 ha, currently under construction (see Figure 3).

Besides the main office buildings, which offer fullyequipped ready-to-purchase or lease space, 50% ofthe HITEC City campus is reserved for private firmswishing to erect their own facilities. Moreover, in thevicinity numerous Indian and international firms,including famous names like Infosys, Wipro andMicrosoft have established their own offices on plotsdesignated by the APIIC.18 The infrastructure facil-ities that are extended to these customised premisesinclude: roads, water supply, drainage, street lightingand provision for data and voice connectivity. Inter-estingly, the APIIC, the public agency that built

much of the basic infrastructure here is the deemedlocal body i.e., the local administration, for this en-tire zone and constitutes the interface between thefirms and various utilities, regulatory bodies, andbranches of government.

It should be noted here that the architectural styleof HITEC City and of the large office buildings built

by IT firms, the vast landscaped campuses, and theremarkable quality of the roads mark a striking con-trast with the surrounding environment, which isgenerally dry and rocky and poorly equipped in ba-sic infrastructure. In this way, HITEC City is ac-tively contributing to the formation of highlydifferentiated mixed spaces midway between ur-ban centres and rural spaces that characterise peri-urbanisation (cf. Duponts introduction to this issue)(see Figure 4).

Apart from the spatial and environmental impactsof such large-scale projects, the increasing impor-tance of private actors in providing and managinginfrastructure has important implications for urbangovernance. PPPs have played a critical role in HI-TEC City, and also for setting up the reputed Inter-national Institute of Information Technology, anengineering school that offers specialised trainingcourses through corporate schools sponsored byprominent IT firms. On its own, the private sectorhas set up numerous educational institutions in theimmediate area, including exclusive residentialschools. The Indian Business School was establishedin partnership with several internationally recogni-sed management institutions including the Kellogg

Figure 1 HITEC City in Hyderabads western suburbs.

18 Some of these plots, which are provided by the government atnominal cost as part of the overall IT policy, are as large as 24 ha.


100


7/15

School of Management, the Wharton School and theLondon Business School. These specialised institu-tions reflect the global orientation of the economicpolicies and the preference for private sector serviceproviders, ostensibly as a gage of quality andtransparency.

Performance of the IT sector

Various indicators show that the IT sector has devel-oped quite significantly in recent years, and it ap-pears to be one of the more dynamic sectors in thecity.19 Based on data concerning large investmentprojects, IT investments in HITEC City and sur-rounding area were estimated to account for over70% of the total investments under implementationin Hyderabad in the late 1990s (Shaw, 1999, p. 976).Public sector spending, mainly on infrastructure, wasestimated at less than 10% of total, but this figuremay not take account of public equity in the form

of land. According to the Hyderabad branch of Soft-ware Technology Parks of India (STPI)20 softwareexports from Andhra Pradesh increased fromroughly 13 million dollars US in 19951996 to morethan one billion dollars in 20032004 (1109 millionUSD). In the same period, the number of companiesregistered with STPI and in operation rose from 31to 860, providing employment to nearly 86,000 per-sons, of which nearly 77,000 are technical staff. Allbut 80 of these units are located in Hyderabad andsurrounding suburbs.

The break-down of exports by sub-sector, pre-

sented below (see Table 1), gives an indication ofthe structure of the industry. ITES have been onthe rise in the last few years and now generateroughly half of total exports.

Figure 2 Cyber Pearl, HITEC City. Photo credit: L. Kennedy.

19 There are no official city-level economic statistics produced inIndia, so estimates have to be used.

20 Software Technology Parks of India is an autonomous agencyset up in 1990 by the Ministry of Communications and InformationTechnology, Government of India. I thank Bart Rijken for thecompiled figures.


101


8/15

Notwithstanding the remarkable performance ofIT industry in Hyderabad, it is no doubt still tooearly to evaluate the capacity of HITEC City to sus-tain its growth and develop into an innovative indus-trial district. Be that as it may, it is undeniable thatgovernment-led efforts have resulted in new invest-ments and put Hyderabad on the map as a high-techhub in India, alongside Bangalore and Chennai.

The making of place: Cyberabad ex nihilo

In January 2001 the government of Andhra Pradeshcreated the Cyberabad Development Area(CDA) with the purpose of developing a large areaaround HITEC City into a model enclave (see Fig-ure 5).21 The stated goal: to create an enclave thatwill become a model for other urban areas in thecountry by providing clean air and water, high qual-ity of services such as sanitation and waste manage-ment, and the best standards of power, housing and

transport (Government of Andhra Pradesh, 2001,p. 1). A Master Plan for CDA was drawn up withthe help of special consultants defining specific landuse zoning regulations and building regulations inorder to provide a framework for the creation ofhigh quality infrastructure. To finance the creationof capital infrastructure such as road and urban ame-nities, the plan provides for raising resources inter-nally by way of user charges, but also externalbetterment charges, and changes in the structure ofproperty tax and recovery rates.

The area, which covers 52 square kilometres, wascarved out of Seriligampally Muncipality and con-sists of 17 revenue villages (cf. Figure 6). Currentlythe cluster around HITEC City, with its impressivebuildings and state-of-the art infrastructure, occu-pies only a small portion of CDA. Although numer-ous commercial and residential buildings are underconstruction, primarily along the main roads, thereare still plenty of open spaces. Major efforts havebeen undertaken to connect the area to the city,via wide well-maintained concrete roads, and

Figure 3 Construction at HITEC City. Makeshift camps for construction workers and their families in the foreground,

Cyber Towers in the background. Photo credit: L. Kennedy.

21 See Government Order Ms No. 21 MA, dated 20 January 2001.


102


9/15

through a recently inaugurated mass transit com-muter train. A new ring road is being built and willfacilitate links to the planned international airport atShamshabad, south of the city. When approachingHITEC City from the centre of Hyderabad the roadtravels through Banjara Hills and Jubilee Hills, bothof which are affluent residential areas. In addition toproviding attractive housing opportunities for peo-

ple employed at HITEC City, these suburbs offermany amenities such as luxury hotels, restaurants,shops and entertainment. The promoters of HITECCity, and urban planners at CDA have plannedhousing colonies, commercial buildings, as well asrecreation facilities, the idea being to create a self-reliant techno township. As Veronique Dupontdemonstrated in the case of Delhi, these various ef-forts contribute to the creation ex nihilo of newareas capable of providing upper income groupswith the kind of working and living conditions to

which they aspire (2001). These are becomingincreasingly self-sufficient areas, capable of meetingall the needs of the residents, and do not appear tobe particularly integrated in Hyderabads urbanfabric.

A knowledge corridor bridging Hyderabad andBangalore

In addition to planning numerous specialised enter-prise parks in Hyderabads western periphery, and

Figure 4 Peri-urban mixed spaces: herding (foreground) and HITEC City (background) in Cyberabad. Photo credit: L.

Kennedy.

Table 1 Sector-wise exports by STPI-Hyderabad units in 200304 (%)

ITES 46.70Application software 10.50System software 7.30Application re-engineering 4.03E-commerce/web applications 7.50Consultancy services 4.25Communication software 7.85ERP/client server 9.37VLSI and embedded software 2.50

Source. Compiled by B. Rijken, with data from STPI, Hyderabad.


103


10/15

promoting private educational and training institu-tions, Vision 2020 includes plans for a knowledgecorridor consisting of three high-tech zones, eachdedicated to a particular sector of activity: biotech-nology/medical research, industrial technologiesand IT enabled remote services (Government ofAndhra Pradesh, 1999). A schematic map indicatesthe three zones will skirt around Hyderabad on thewestern, south-western and southern borders, withextensions from HITEC city toward the south alonga planned HyderabadBangalore expressway.22What

is clearly stated is that the government intends to de-velop a large area23 to the south of Hyderabad inorder to ensure a scale proportionate to the statesambitions and to international examples it is tryingto emulate:

The State will need to develop a much larger area

than HITEC City as the States IT hub and equip it

with world class facilities. HITEC City is only one

square kilometre whereas the US Silicon Valley is

an 80 km strip and Malaysias Multimedia Super

Corridor (MSC) is a 750 km strip. By planning a

large location early, Andhra Pradesh will be able to

avoid the unnecessary congestion that occurred in

some states and keep real estate prices at reasonable

levels for a longer period of time (Government of

Andhra Pradesh, 1999, p. 282).

An international airport, to be built andmanaged by the private sector, is under construc-tion at Shamshabad and is considered a veryimportant element of the overall strategy. About20 km southwest of the city, it will be accessibleby a national highway connecting Hyderabad withBangalore. Like for Cyberabad, a special statutoryauthority has been created called HADA,Hyderabad Airport Development Authority. Witha jurisdiction of 458 km2, HADAs mission is topromote planned development in and around the

Figure 5 Cyberabad development area CDA.

22 Bangalore, Indias IT capital, is located about 560 km fromHyderabad.23 A recent press report indicated 20,000 acres (8094 ha). cf.More land identified for IT firms, The Hindu, 4 August 2005,Hyderabad edition.


104


11/15

airport, and act as the coordinator betweengovernment and the various agencies concerned.A Master Plan outlines the development strategy,including stipulations on land use and buildingrequirements. Even more so than the area falling

under CDA, HADA covers a largely ruralarea. Shamsabad is the largest settlement withless than 20 000 inhabitants, the remainingsettlements are classified as villages and hamlets(HADA Draft Master Plan 2005, p. 12). The

10 km

CDACDA

MCHMCH

SerilingampallySerilingampallyKukatpallyKukatpally

QutubullapurQutubullapurAlwalAlwal

KapraKapraMalkajigiriMalkajigiri

UppalUppal

RajendranagarRajendranagarGaddi annaramGaddiannaram

L.B.NagarL.B.Nagar

ProposedInternationalAirport

to Nagpurto Nizamabad

to Mumbai

to Bangalore

to Kazipet

to Vijayawada

to Mumbai

Municipalities

Water Bodies

CDA - Cyberabad Development Area

MCH - Municipal Corporation of Hyderabad

SC - Secunderabad Cantonment

Boundary of Hyderabad Urban Development Authority (HUDA)

Major Roads

Railways

N

MusiRiver

KukatpallyKukatpally

SCSC

NH 9

NH 7

NH 9

NH 7

Source: HUDA Draft Master Plan (2003)

INDIA

HyderabadANDHRA

PRADESH

Graphic design : Aime Lafitte (CNRS, ADES)

Figure 6 Hyderabad urban agglomeration (within HUDA area).


105


12/15

total population in 2001 was just above154,000, and it is projected to reach 2 million by2021.24

Glocal scalar fixes and global city-regions

Both CDA and HADA resemble textbook examplesof glocal fixes, i.e. place-specific production com-

plexes, which are the outcome of a strategic approachto infrastructure development that seeks to facilitatecapital accumulation through intense global-localinteraction.25 These fixes, often in the form of scienceparks or enterprise zones, involve providing excel-lent quality technical networks and services to attractfirms, often custom designed for their needs. Thisstrategy has been interpreted, notably by Brenner(1998, 2004), as a rescaling of the state territorialorganisation as it involves the creation of a localisedframework for intensifying productive forces, herespecial development areas, governed by specificrules and regulations. Instead of applying a uniform

regulatory regime throughout the national (or regio-nal) territory, fitting out specialised spaces allowspolicy-makers to offer what investors are seeking,and what they themselves are unable to provide tothe territory as a whole. Rescaling is a compellingconcept, and one that appears quite powerful forexplaining the current trend of city-focused growthstrategies in India, deployed by both central and re-gional governments. Notwithstanding, rescalingstrategies, premised on uneven spatial development,are strongly contested. It is argued in particular thatthey exacerbate urban fragmentation to the extentthat they involve improving services for powerfulusers while bypassing economically or socially weak-

er groups.26

Within the HITEC City enclave, there isclearly a case of increasing differentiation in servicelevels at the local scale, and in this sense it effectivelycombines global connectivity and local disconnection(Graham and Marvin, 2001, p. 377). However, therehas not been a deterioration in local services levels,and in some cases there appears to have been slightimprovement. This observation joins other recentscholarship in underscoring the necessity for precau-tion when transposing across diverse political andcultural situations assumptions about the conse-quences of specific policies and of uneven develop-

ment logics generally.27 In this context, two remarksare in order. Firstly, patterns of social and spatial seg-regation are best understood within their specific so-cial and historical contexts, and policy choices withregard to public utilities generally reflect broader so-cial institutions (Lorrain, 2005, p. 24). Secondly, in aglobal context where spaces in developed and devel-oping countries are increasingly in direct competition

for capital investment, these strategies may be themost effective, from the point of view of the latter,for overcoming, albeit partially, infrastructural weak-ness and increasing capacity for promoting economicgrowth. An evaluation of the consequences wouldnecessarily involve taking into consideration theoverall policy approach, including efforts to redis-tribute wealth generated by these global growthsectors.

Weak political mobilisation

The growth strategies being deployed in Hyderabadare identical in many respects to those observed in

large cities across the globe, in both developed anddeveloping countries. Likewise, one observes similarpatterns with regard to the types of economic andcommercial activities that are most dynamic (busi-ness services, high-technology industries and ser-vices, shopping and entertainment complexes). Inmany ways then Hyderabad manifests key character-istics of global city-regions explored in Scott et al.(2001); not surprisingly it has more affinities withcity-regions in developing countries which . . . rep-resent the best and the worst of the developmentprocess. They are places where highly productiveand innovative economies are often in evidence,but they are also places where the multi-faceted

market failures, historical imbalances, and brutalpower relations of the development process arepainfully in evidence. (Scott et al., 2001, p. 26).

However, Hyderabad diverges from the globalcity-region framework in one important aspect,namely the lack of political mobilisation at themetropolitan scale, observed in other city-regions,whose objective is to build regional political compe-tence . . . in pursuit of mutual aid and advantage inthe face of the mounting challenges that globaliza-tion is now bringing to the fore at the local level

(Scott, 2001, p. 4).28 City-level political representa-tives in Hyderabad as well as in the surrounding

municipalities have been conspicuously absent fromthe policy process at every stage, from the broadvision statement to the specifics of sectoral policies.Indeed, even within the administration the planning

24 Some local environmental groups opposed the planned inter-national airport at Shamshabad on grounds that it violated existingstatutes protecting water bodies. The public interest litigation filedwith the Supreme Court by the NGO, Forum for a BetterHyderabad, was unsuccessful in blocking the plan.25 These concepts were elaborated in the 1990s by several scholars.See Neil Brenner (1998, 2004) for a discussion and preliminarysynthesis of this literature.26 Stephen Graham defines premium networked spaces asfollows: new or retrofitted transport, telecommunications, poweror water infrastructures that are customized precisely to the needsof powerful users and spaces, whilst bypassing less powerful usersand spaces 2000, p. 185.

27 On Mumbai, see Zerah, 2003. On cities in sub-Saharan Africa,see Jaglin, 2005. For a recent critical appraisal of the splinteringurbanism thesis elaborated by Graham and Marvin (2001), seeCoutard et al. (2005).28 This point is explored in more detail in Kennedy and Ramach-andraiah (2006).


106
http://-/?-http://-/?-http://-/?-http://-/?-


13/15

authorities for the Hyderabad metropolitan areawere not consulted about the decision to createCDA.29 In the period examined here, the state gov-ernment indulged in a classic top-down decision-making process, which is emblematic of the politicalculture in Andhra Pradesh and in many Indianstates. Attempts by the central government tostrengthen political decentralisation in both urban

and rural areas, most recently through constitutionalamendments, have not always met with success,although situations vary enormously across regions.Civil society organisations, often with support frominternational NGOs, continue to demand moreeffective democratic decentralisation whiledenouncing political corruption at all levels.30 Onekey question that arises here, which will require fur-ther research, is the extent to which such top-downdecision-making, in conjunction with regulatorytools that carve out selected areas for developmentwithin largely undeveloped peri-urban spaces, areeffectively weakening prospects for participatory ur-

ban governance at the metropolitan scale. There isat present a distinct contradiction between the gov-ernments rhetoric, which emphasises its commit-ment to improving popular participation, and itsactions, which have excluded both elected represen-tatives and civil society organisations from the policyprocess.

Greater Hyderabad on the horizon?

Interestingly, the state government recently issued aproposal that, if enacted, would lead to the forma-tion of a political entity at the metropolitan level,the Greater Hyderabad Municipal Corporation.This would be formed by merging the municipalities

and small towns surrounding Hyderabad.31 This pro-posal was not publicly discussed before theannouncement of the Government Order, againsymptomatic of top-down political practices, andmet with hostility from the elected councillors ofthe Hyderabad Municipal Corporation, a majorityof whom voted against it (75%).32 The fate of thisinitiative is unclear at present, but it seems likelythat the state government will pursue it, citing thenecessity of creating an appropriate managementstructure for coordinating overall city level systems,(e.g., road network, water supply and drainage net-work, public transport system, etc.) consolidating

technical capabilities and improving possibilitiesfor resource mobilisation. Such justifications are nodoubt founded, and indeed they are in line withemerging norms at the national level. Locally, theneed for metropolitan planning appears ever moreurgent as more and more suburban spaces are beingdeveloped, albeit selectively as we have seen,increasing spatial differentiation. However, the ab-

sence of political debate, indeed the total lack ofprior consultation, has soured the proposal for manylocal political actors and may compromise its ulti-mate success. A more palatable proposal may beto conserve existing local bodies, while still creatingan overarching metropolitan body, perhaps withindirectly elected representatives from the corpora-tion and the surrounding municipalities and towns.33

Given the themes discussed in this paper, it is inter-esting to note that one of the six reasons listed in thenotification for constituting the Greater HyderabadMunicipal Corporation refers explicitly to the stateseconomic strategy: to make the city internationally

competitive with world class infrastructure andservices.This example illustrates how global models are

selectively chosen in Andhra Pradesh: whereas thestate government has been very clear about its com-mitment to city-centric, infrastructure-led growth, ithas granted scarce attention to governance issues.The international literature on strategic urban plan-ning stresses the importance of engaging a politicalprocess with the major social and economic groups.Although, as Stren points out, the ability of civilsociety and specific stakeholders to participate insetting the agenda and devising policies dependson how well (they) are engaged with municipal

institutions, and how much power and effectiveauthority these institutions command. (2001,p. 206, emphasis added). This is a reminder that,even in the event that the Greater Hyderabad Muni-cipal Corporation is created, it will not suffice toautomatically transform the relationship between ci-vil society and the state. In Hyderabad, for now,metropolitan governance is dominated by a strongstate, which sets the priorities and pursues them ina top-down manner. Although new actors are pres-ent on the scene, they tend to represent private eco-nomic interests, and the consultation process withthe state, to the extent it takes place, is mainlythrough informal channels.

Conclusion

The main objective of this paper was to examinehow efforts to promote growth in the southern In-

29 Interview with a senior planning officer, Hyderabad UrbanDevelopment Authority, Hyderabad 25 November 2002.30 Lok Satta (People Power) is an example of a powerful NGO,based in Hyderabad, that focuses on political and governancereforms in its pursuit of development goals. See www.loksatta.org.31 Cf. G.O.Ms. No. 704, Municipal Administration and UrbanDevelopment Department, Government of Andhra Pradesh, dated20th July 2005. cf. http://www.aponline.gov.in/apportal/depart-ments/GosbyDepts.asp.32 Cf. Majority corporators vote aginst Greater Hyderabadproposal, The Hindu, 5 August 2005, Hyderabad edition.

33 This would be less threatening perhaps to the dominant politicalparty in Hyderabad, the Majlis-e-Ittehadul Muslimeen, whoseconstituency is based in Hyderabad City, and whose politicalsurvival is directly threatened by the Greater Hyderabad proposal.


107
http://www.loksatta.org/http://www.aponline.gov.in/apportal/departments/GosbyDepts.asphttp://www.aponline.gov.in/apportal/departments/GosbyDepts.asphttp://www.aponline.gov.in/apportal/departments/GosbyDepts.asphttp://www.aponline.gov.in/apportal/departments/GosbyDepts.asphttp://www.loksatta.org/


14/15

dian state of Andhra Pradesh are impacting theHyderabad metropolitan region and the conse-quences for urban governance. As we have seen,the state governments growth strategies, based onhigh-tech industries and services and large-scaleinfrastructure projects, largely targeted Hyderabadand its peri-urban periphery. To promote the IT sec-tor, a dual strategy was engaged: on one hand, an

aggressive policy offers numerous incentives toinvestors, including concessions on land, on theother hand, specially designed enterprise parks arebeing built in peri-urban areas through public-pri-vate partnerships, and fitted out with world-classinfrastructure. The analysis focused considerableattention on the case of HITEC City, the mostprominent IT park. Of particular interest is the factthat the state government designed a special regula-tory framework for the park and for a large areaaround it, the Cyberabad Development Authority,with the stated purpose of developing it into a mod-el enclave. It was argued that this regulatory tool

constitutes a key component of a reterritorialisationstrategy, here the creation of a new territoryequipped with excellent quality infrastructure andgoverned by specific rules, which aim to ensure acertain type of urban development. This exampleprovides a striking illustration of state re-scaling asdeveloped by Brenner (1998, 2004), whereby statesseek to adapt to capitalist restructuring by promot-ing their major cities as key coordinates of rescaledstate territorial power.

What is remarkable here, with regard to therescaling literature, is that fact that the strategy isbeing played out at the regional level. This was ana-lysed as an expression of political affirmation on the

part of the state government, whose policy-makingcapacities have been enhanced in recent years as aconsequence of both economic reforms and pro-found changes in Indias polity. More opportunitiesfor attracting capital, but also greater competitionamong states, are driving political elites in some ofIndias states to devise policies that are responsiveto the norms of the global economy. Their effortsconcentrate on their largest cities and are character-ised by large-scale infrastructure projects, often lo-cated in the urban peripheries, public-privatepartnerships, and also special regulatory instru-ments. Andhra Pradesh has been at the forefrontof these trends.

The relatively strong role played by public ac-tors in this case study appears significant in lightof the fact that much of the literature on globalcities tends to emphasise the predominant roleplayed by exogenous global actors, notably multi-national firms. This does not suggest that the latterare not important, indeed their presence is grow-ing; rather it underscores the fact that the regionalstate is mobilising its considerable powers to shapeconditions for investors and for the urban regionspolitical economy as a whole. In that fundamental

sense, the state government constitutes the key ac-tor of urban governance in Hyderabad; indeedother local actors are conspicuously absent fromthe policy process. Governance continues to becharacterised by centralised political institutions.In the economic sphere, interface with investingfirms is carefully controlled by government agen-cies. Such institutional arrangements in conjunc-

tion with special regulatory frameworks likeCDA and HADA would appear to weaken pros-pects for governance institutions at the metropoli-tan scale.

Acknowledgements

I am grateful to Dr. Veronique Dupont for provid-ing me with an opportunity to present a first draftof this paper at the workshop she organised inNew Delhi in 2004. I would also like to thank Dr.Marie-Hele` ne Zerah for her suggestions, and twoanonymous referees for their valuable comments.

The usual disclaimers apply.

References

Brenner, N (1998) Global cities, glocal states: global city formationand state territorial restructuring in contemporary Europe.Review of International Political Economy 5(1), 137.

Brenner, N (2004) New State Spaces. Urban Governance and theRescaling of Statehood. Oxford University Press, Oxford.

Coutard, O, Hanley, R and Zimmerman, R (eds.) (2005)Sustaining Urban Networks. The Social Diffusion of LargeTechnical Systems. Routledge, London and New York.

Dupont, V (2001) Les nouveaux quartiers chics de Delhi. Langagepublicitaire et realites periurbaines. In: Nommer les nouveauxterritoires urbains, (ed.) Rivie`re dArc, H. Editions UNESCO/Editions de la Maison des Sciences de lHomme, Paris, pp. 3961.

Dupont, V (2002) Le monde des villes. In: Population etde veloppement en Inde, (ed.) Saligo-Yatzimirsky, M-C. Car-refours de geographie, Ellipses, Paris, pp. 5584.

Government of Andhra Pradesh (1999) Andhra Pradesh: Vision2020.

Government of Andhra Pradesh (2001) Cyberabad Master Plan.Government of Andhra Pradesh (2002) ICT Policy 20022005,

Information Technology and Communications Department.Government of Andhra Pradesh (2005) Hyderabad Airport

Development Authority Draft Master Plan.Graham, S (2000) Constructing premium network spaces: reflec-

tions on infrastructure networks and contemporary urbandevelopment. International Journal of Urban and RegionalResearch 24(1), 183200.

Graham, S and Marvin, S (2001) Splintering Urbanism. Networked

Infrastructures, Technological Mobilities and the Urban Condi-tion. Routledge, London.Jaglin, S (2005) Services deau en Afrique subsaharienne. La

fragmentation urbaine en question. CNRS Editions, Paris.Jenkins, R (1999) Democratic politics and economic reform in India.

Cambridge University Press, Cambridge.Kennedy, L (2004) The political determinants of reform packag-

ing: contrasting responses to economic liberalization in AndhraPradesh and Tamil Nadu. In Regional Reflections: ComparingPolitics Across Indias States, (ed.) R Jenkins. pp. 2965.Oxford University Press, New Delhi.

Kennedy, L, Ramachandraiah, C (2006). Logiques spatiales dunestrategie regionale high-tech. Lexemple de HITEC City a`Hyderabad (Inde). Flux 63/64, 5470.


108


15/15

Kirk, J (2005) Banking on Indias States: the politics of WorldBank reform programs in Andhra Pradesh and Karnataka.India Review 4(34), 287325.

Lorrain, D (2005) The rise of technological networks in daily life.In Sustaining Urban Networks. The Social Diffusion of LargeTechnical Systems, (eds.) O Coutard, R Hanley and RZimmerman. pp. 1531. Routledge, London and New York.

McCarney, P, Halfani, M and Rodriguez, A (1995) Towards anunderstanding of governance: the emergence of an idea and itsimplications for urban research in developing countries. InUrban Research in the Developing World, (eds.) R Stren and JBell. Perspectives on the City, vol. 4. pp. 91141. Centre forUrban and Community Studies, University of Toronto,Toronto.

Mooij, J (2005) Hype, skill and class. a comparative analysis of thepolitics of reforms in Andhra Pradesh, India. Working PaperSeries No. 413, Institute of Social Studies, The Hague.

Scott, A J (2001) Introduction. In Global City-Regions. Trends,Theory, Policy, (ed.) A J Scott. pp. 18. Oxford UniversityPress, New York.

Scott, A J, Agnew, J, Soja, E W and Storper, M (2001)Global city-regions. In Global City-Regions. Trends, The-ory, Policy, (ed.) A J Scott. pp. 1130. Oxford UniversityPress, New York.

Sellers, J M (2002) Governing from Below. Urban Regions and theGlobal Economy. Cambridge University Press, Cambridge.

Shaw, A. (1999) Emerging patterns of urban growth in India,Economic and Political Weekly, 1724 April, 969978.

Sinha, A (2004) Ideas, interests and institutions in policy change. acomparison of West Bengal and Gujarat. In Regional Reflec-tions: Comparing Politics Across Indias States, (ed.) RJenkins. pp. 66108. Oxford University Press, New Delhi.

Stren, R (2001) Local governance and social diversity in thedeveloping world: new challenges for globalizing city-regions.In Global City-Regions. Trends, Theory, Policy, (ed.) A JScott. pp. 193213. Oxford University Press, New York.

Zerah, M-H (2003) Gouvernance metropolitaine et pilotage dereseaux techniques: le cas de la region metropolitaine deMumbai (Bombay). Revue francaise dadministration publique107, 395408.


109

Documents

Peri Urban Dynamics in Hyderabad India