What India Needs to Learn from China

By Samir Nazareth

March 15, 2015

In his upcoming visit to China, PM Modi should be prepared to learn a few lessons. 

Indian Prime Minister Narendra Modi is planning to visit China before the end of May. Modi has been to China before, as chief minister of Gujarat, when he sought to attract business and learn from China’s socio-economic model. He should be aiming to do something similar this time. Besides discussions on the China-India border issues, reopening the overland Silk Road, and creating a maritime version, Modi should take time to study the Chinese model of resettlement and pollution control.

These issues have only grown in importance as New Delhi steps up its efforts to achieve economic growth. Take for example the six industrial corridors that are being planned. These are five more than the UPA government had envisaged. The Delhi Mumbai Industrial Corridor (DMIC), built to facilitate movement through the six major states of India (Uttar Pradesh, the National Capital Region, Haryana, Rajasthan, Gujarat and Maharashtra) will cover 1483 square kilometers and will have 11 investment regions and 13 industrial areas. The official DMIC website states that around 180 million people, or 14 percent of the population, will be affected. The Japan Center for a Sustainable Environment and Society (JACSES) points out that at least 350,000 hectares will be allocated for the DMIC project. To put these corridors in place many thousands of hectares of land will need to be acquired, displacing a large population. India’s efforts at resettling those whose land has been acquired leave much to be desired.

Now the BJP government has upped the ante and plans 100 smart cities in these six corridors. The government will need to design cities that are economically, environmentally and socially sustainable and that permit social equity for their residents.

There is a real danger that the industrial corridor project and the Smart City project will fail if the BJP government does not pay heed to the socioeconomic aspirations of those being displaced. Displaced persons could stall the project if they are provided with insufficient compensation in terms of cash, training in new skills needed in the new economy, and new opportunities. After all, they will be living in these Smart Cities too. The Smart Cities project will not be able to meet its goals if those who have lost their land are not provided, as part of the resettlement package, with the economic skills they need to thrive in these areas.

Modi would do well to study the resettlement policies of China. According to a document prepared for the World Commission on Dams report, there is much to be learned from the Xiaolangdi project. The document states that the approach to resettlement and rehabilitation for this project was different. The World Bank supported efforts to provide “sufficient financial and human resources to facilitate resettlement.” China’s developmental resettlement policy integrates resettlement plans with regional socioeconomic development. Consequently, skills, low-interest bank loans, training in cash-crop cultivation and other assistance are provided so that resettled people can participate in the local economy even as industrial jobs are provided. A key aspect of this policy is that fund disbursement is sanctioned according to plans for resettlement in such a way that enhances economic conditions. Though the success of the resettlement is debatable, the process at least acknowledges the need to assimilate displaced persons in the local economy.

China also has a very large resettlement bureaucracy that extends down to the village level. Thus there is a decentralization of authority. This can ensure that the lessons and skills acquired from projects are shared within the bureaucracy.

Meanwhile, India’s wish to surpass China has finally come true, in at least one respect: Delhi’s air is more polluted than Beijing’s. Vehicular pollution is one of the key ingredients in the pollution that both capitals suffer. Pollution from exhaust is a function of the number of vehicles on the road, emission standards, and road congestion. Vehicles don’t run optimally on congested roads, which means more pollution. To decrease air pollution the number of vehicles on the road has to decrease, vehicles have to run optimally, and emission standards for vehicles have to improve. For light vehicles, China put in place the China IV standards in 2011 for gasoline powered vehicles, and China V for vehicles in Beijing and Shanghai. Across India, vehicles have emission standards as per Bharat-III norms, and vehicles in select cities comply with Bharat-IV emission norms. These standards are similar to European emission standards.

Besides improving on its vehicular emission norms China is also putting in place systems for the introduction of a congestion tax. This kind of tax is a negative incentive to car owners, encouraging them to drive less. London introduced this in 2003. Local Chinese governments are using schemes such as a license plate lottery and final digits on license plates to deal with traffic congestion. Beijing already limits new cars to 20,000 a month. Civic authorities in Beijing are also planning to create low-emission zones within the city where all vehicles would have to follow pollution norms. They are studying similar concepts already in place in London and the Netherlands. Moreover, Beijing already has a regulation in place that aims to cut annual vehicle increases from 240,000 to 150,000, the goal is that by 2017 vehicle ownership is capped below 6 million.

Beijing has also come up with a Beijing Clean Air Action Plan (2013-2017). Under the plan, 300 polluting plants in Beijing were to be shut in 2014. Since 2013, 663 facilities have been closed; by 2016, 1200 will be shut. Moreover, the Beijing government has listed 105 production techniques that will be phased out, along with 50 types of dated production equipment, in a bid to ease air pollution. A similar plan needs to be created and implemented in Indian cities, ranging from Delhi and Bangalore to Vapi and Chembur.

The Chinese story is not all about technology, military power, and a massive consumer base. It is also about putting in place policies and laws that improve the lives of the common citizen. What we see is that the Chinese have learned that economic growth that lowers human and environmental standards is pointless. India needs the pragmatism to imbibe what the Chinese have learned from their mistakes. This is our jugaad and it will save the country much time and heartburn in the long run.

Samir Nazareth is the author of 1400 Bananas 76 Towns & 1 Million People, available in hard copy now. He tweets at @samirwrites.