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

95–109, 2007
Ó 2006 Elsevier Ltd.
doi:10.1016/j.cities.2006.06.001 All rights reserved.
0264-2751/$ - see front matter

www.elsevier.com/locate/cities

Regional industrial policies driving


peri-urban dynamics in Hyderabad,
India
Loraine Kennedy *,1
CNRS, Centre d’Études de l’Inde et de l’Asie du Sud (CNRS-EHESS), Paris, France

Received 1 July 2005; received in revised form 4 April 2006; accepted 5 June 2006
Available 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 fitting
out, via public–private partnerships, specialised business/technology parks and attracting
investment through carefully designed industrial policies. This study focuses on regional IT
policies, with attention to the strategic use of peri-urban space and examines the construction
of HITEC City and other large-scale projects. Using a multi-level perspective, the Hyderabad
case is contextualised in relation to India’s recent adoption of economic reforms. Recent lit-
erature on global city-regions and the development of global capitalism provides a macro
framework for analysing the role of a provincial government both in initiating and driving
industrial 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 and
regulatory 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. Although
economic strategies have been fairly successful, top-down decision-making practices have
effectively 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 governance
institutions at the metropolitan scale.
Ó 2006 Elsevier Ltd. All rights reserved.

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

Introduction infrastructure-led growth, a dominant strategy con-


Hyderabad is the capital of the southern Indian state sisted in fitting out specialised business/technology
of Andhra Pradesh and constitutes the core of its parks and attracting investment through carefully
largest metropolitan area (population 5.7 million). designed industrial policies.2
Between 1995 and 2004, the state government This study examines these recent state-led efforts
sought to transform Hyderabad into a dynamic to promote growth in Andhra Pradesh, a state of
economic region oriented towards global growth 76 million people, with special attention to the impli-
sectors. Inspired by international models such as
2
A preliminary version of this text was presented in New Delhi at
the international workshop on ‘‘Peri-urban Dynamics: Population,
*
Tel./fax: +33-556-24-7115; e-mail: kennedy@ehess.fr. Habitat and Environment on the Peripheries of Large, Indian
1
Administrative address: CEIAS, EHESS, 54 Boulevard Raspail, Metropolises’’, organised by the Centre de Sciences Humaines and
75006 Paris, France. the India International Centre, 25–27 August 2004.

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

cations for peri-urban spaces around Hyderabad. sphere is partly subsumed within the national polity,
The transformations currently underway include although separate elected bodies exist at each eche-
the emergence of new industrial and service lon (national, state, and local), and the Indian econ-
activities, the realisation of large investment projects omy constitutes an integrated market for all
involving ‘‘world-class’’ infrastructure, and the con- practical purposes.
struction of new housing colonies and commercial India’s economic reforms, adopted by the federal
ventures catering primarily to upper income groups. government in 1991, constitute an important back-
Using a multi-level perspective, the aim of this paper drop to this analysis because they have deeply af-
is to analyse how regional industrial policies are fected economic and political processes in the
playing themselves out in Hyderabad’s peripheries country at all levels. Of particular interest is the fact
and their consequences for urban governance. This that as the federal government loosened its centra-
case is situated both within its wider political and lised control over the economy, some state-level
economic context and with regard to recent litera- governments began taking initiatives to promote
ture on the renewed role of cities in post-fordist cap- growth and attract investment, giving rise to regional
italism. It is argued that recent developments in economic policies for the first time in post-indepen-
Hyderabad, quite remarkable in the Indian context, dence history.3 Although macro-economic policies
are the outcome of a process of political assertion on remain the prerogative of the central ministries, it
the part of the regional government in the sphere of has been convincingly shown that state governments
economic policy-making. The policies can be inter- have a decisive role to play in the reform process,
preted as a strategy of re-scaling on the part of the with regard to both the scope and the pace (Jenkins,
provincial state, in an attempt to adjust its actions 1999).4 Regional political elites are discovering that
to the imperatives of the global economy. Through they can craft their own strategies, prioritise their
such processes of reterritorialisation, similar to that public investments, and negotiate directly with for-
described by Brenner (1998, 2004), the aim has been eign investors. Between 1995 and 2004, Andhra Pra-
to make metropolitan Hyderabad a growth engine desh stood out as one of the more pro-active states,
for the entire region. These policies have been suc- and has arguably taken economic reforms further
cessful in many respects, attracting private firms than any other state.5
both domestic and international and creating wealth In addition to economic reforms, political devel-
and employment. At the same time, they have raised opments, notably the formation of coalition govern-
important questions with regard to urban gover- ments at the national level, have given regional
nance. Private sector actors have emerged on the political parties greater influence in national affairs.
scene, for instance as builders and managers of infra- Although it will not be elaborated upon here, this
structure complexes, mainly through public–private evolution is important in explaining how Andhra
partnerships. In contrast, locally elected representa- Pradesh’s state government managed to assert itself
tives have been largely excluded from the policy so effectively in both national and international fora.
process, as have civil society groups, learning about Two facts are of particular importance: during the
major decisions only after the fact. Large tracts of period under study, the government was led by a re-
peri-urban space are being transformed into special gional political party, the Telugu Desam Party
purpose enclaves, governed by specific regulatory (TDP), which had been demanding greater decen-
frameworks. By subdividing peri-urban spaces and tralisation from New Delhi since its creation in the
increasing spatial differentiation, such policies ap- 1980s. Secondly, the TDP was a major partner in
pear to weaken prospects for governance institutions the national coalition government between 1999
at the metropolitan scale. and 2004, giving it a distinct advantage in its negoti-
ations with the federal government.
From these brief remarks, it is apparent that eco-
Method and context nomic reforms and political change are contributing
The research presented here is based on information to the emergence of new forms of governance in In-
collected during several study trips to Hyderabad dia and this study is an attempt to examine this pro-
between 2002 and 2006. Although essentially an cess. There can be no doubt that economic reforms
empirical study, it engages with recent theoretical have deregulated many aspects of production and
literature in order to interpret and situate local trade, facilitated private investment, including for-
developments. The method involves several layers
of analysis. Although the study focuses on regional
industrial policies and their interaction with the
metropolitan region of Hyderabad, it is crucial to 3
India gained independence from Britain in 1947.
place the analysis within the Indian context, where 4
As Sinha points out (2004), many state governments are
economic liberalisation has spurred important reregulating as the federal government delegates more and more
changes and where the federal set-up requires taking decisions to them, thereby leading to a new layer of bureaucracy
and differentiated rules and regulations across national space.
into account several superimposed spatial scales. It 5
Although less far than the state’s political rhetoric would
should be recalled that the state (regional) political suggest. See Kennedy (2004), Kirk (2005), and Mooij (2005).

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

eign direct investment, all of which have increased European context, cities are at once ‘‘coordinates’’
competition. However, it will be evident in the of state territorial power, embedded within larger
course of this narrative that state forces continue state institutions, and sites of reterritorialization for
to play a crucial role in the economy at both the na- post-Fordist forms of global industrialisation where
tional and regional levels where they are increas- they function as ‘‘nodes of accumulation’’ in global
ingly compelled to adapt to a more competitive flows (1998: 3, 17). Concretely, this means promoting
environment and to more stringent fiscal constraints. the productive capacities of specific localised spaces
It is in this context that Indian cities, after years of in urban regions, for instance through the creation
neglect, are receiving renewed attention from pol- of immobile assets like conference centres or enter-
icy-makers at the central and regional levels.6 One prise parks. This re-scaling hypothesis will be exam-
reason is that since the start of reforms, investments ined here, in relation to emerging trends in India’s
have concentrated in urban areas. The growing con- metro cities, which mirror those observed in other ur-
tribution of cities to national income, and their po- ban regions that aspire to ‘‘global city’’ status.
tential to act as growth engines have spurred The ‘‘global city-region’’ perspective also offers an
efforts in recent years to improve basic urban infra- attractive framework for analysing the Hyderabad
structures and strengthen municipal finance. It is case (Scott, ed, 2001), although a closer examination
striking to observe how policy-makers have been in- reveals an important discrepancy, which will be dis-
spired by international examples, and how they are cussed later in the paper. In this literature, city-re-
adjusting their strategies to global market condi- gions function as the basic motors of the global
tions. As indicated above, one of the objectives of economy and their development is intimately linked
this analysis is to explore the ways that specific, with globalisation: ‘‘They function as territorial plat-
localised strategies interact with global economic forms for much of the post-Fordist economy (. . .)
processes. Recent theoretical work provides some and as important staging posts for the operations
compelling insights and suggests a number of of multinational operations. Above all, they are
hypotheses. It will be seen that whereas the Hyder- important centers for flexible-manufacturing sectors,
abad case validates certain trends discussed in the as exemplified by high-technology or neoartisanal
literature it also diverges in some respects from industry, and for service sectors, . . .’’ (Scott, 2001,
other contemporary patterns. p. 4). Like in the case of rescaling strategies, global
city-regions are emerging as a result of efforts to
Interpretive frameworks strengthen regional competitiveness and face the
Much current literature on large cities and their artic- challenges of globalisation. In most cases, this strat-
ulation with the global economy emphasizes the egy involves consolidating the metropolitan territory
influence of exogenous forces shaping outcomes, by bringing together fragmented territorial units in
especially footloose capital, multinational firms and order to build regional political competence (Scott,
international aid agencies. This is a compelling per- 2001). It underscores the importance of political
spective for several reasons: it appears to corroborate leadership, of the state and other organised actors,
the widely held view that globalisation has led to a re- both local and supra-local.
treat of the nation-state; it corresponds to percep- The term ‘governance’ is used in this paper with
tions about the rapid changes taking place in large the following meaning in mind: ‘‘Governance, as dis-
metro areas in the developing world, such as the tinct from government, refers to the relationship be-
mushrooming of commercial and entertainment cen- tween civil society and the state, between rulers and
tres; lastly it explains the conspicuous presence of ruled, the government and the governed’’.7 Given
multi-national firms in places where they were previ- the particular focus of this study, Jefferey Sellers’
ously absent. However, this ‘‘global forces’’ perspec- definition of ‘urban governance’ provides a useful
tive tends to conceal the fact that public actors too complement by underscoring the economic dimen-
are actively shaping urban outcomes, taking the deci- sion of cities: ‘‘actions and institutions within an ur-
sion to leverage their large cities to better attract glo- ban region that regulate or impose conditions for its
bal investment flows. States are ‘rescaling’ their political economy’’ (Sellers, 2002, p. 9).
internal institutional hierarchies to adjust to eco-
nomic realities; state territorial power is being rear- Regional growth policies and Hyderabad’s
ticulated and reterritorialised (Brenner, 2004). peri-urban areas
Following Brenner, whose work has focused on the
As indicated above, economic reforms and political
change are redefining relations between the federal
6
It may be recalled that one of the goals of centralised economic government and the states, and have effectively con-
management was balanced regional development and planned tributed to a form of political decentralisation. From
urbanisation. Indeed, to avoid massive migration from the coun- the point of view of the states, one of the trade-offs of
tryside, and ‘‘uncontrolled’’ urban growth, policy-makers con-
sciously strove to make large cities unattractive by blocking
productive investments and neglecting infrastructure (Dupont,
7
2002, p. 73). McCarney et al. (1995, p. 95), cited by Stren (2001, p. 205).

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

decentralisation is that they are required to take on especially in the global growth sectors, where inter-
greater responsibilities in resource generation and national standards are considered de rigueur.
sound fiscal management. States have reacted differ- What is particularly relevant for the perspective
ently to these opportunities and constraints and have examined here is that the government’s efforts to
adopted various approaches with regard to empow- promote growth largely focused on cities, and on
ering local governments including their largest cities. Hyderabad in particular. It is not an exaggeration
Most states, including Andhra Pradesh, have been to say that in the decade from 1995 to 2004, Hyder-
reluctant to cede significant powers to elected muni- abad’s peri-urban areas provided a laboratory for
cipal councillors, or indeed to include them in the implementation of several key strategies like
decisions that directly affect their constituencies. infrastructure-led growth and a focus on global
Economic policies in particular are considered to fall growth sectors such as IT and biotechnologies.
outside the purview of local governments, although Although the spectacular development of the IT
the 74th constitutional amendment ratified in 1993 industry in Hyderabad can be explained in part by
advocates extending their functions to include plan- the presence of an existing industrial base11, the
ning for economic and social development. main reason is no doubt the policy thrust given by
Soon after Chandrababu Naidu took over as Chief Naidu’s government. Indian and international entre-
Minister8 in 1995, the government of Andhra Pra- preneurs have responded positively to a series of
desh announced a series of policies to stimulate generous investment incentives including an attrac-
growth and economic development. It openly en- tive location and state-of-the-art telecommunica-
dorsed economic reforms, which marked a rupture tions infrastructure.
with earlier practices and rhetoric of the TDP, and
indeed of previous Congress governments in the Industry-friendly policies for the IT sector
state, both of which followed regimes that can be Naidu’s government designed specific policies for
broadly classified as populist.9 A detailed policy doc- developing IT and related services. In 2002, the
ument released in 1999, Andhra Pradesh: Vision Andhra Pradesh government released a new ICT
2020, put forth a ‘‘new and comprehensive growth policy, replacing the 1999 policy, which outlined
agenda’’ based on a threefold approach consisting incentives and investment subsidies available to IT
of building capacity, focusing on high-potential sec- hardware and software industries, as well as to the
tors to be mobilised as engines of growth, and trans- IT service sector, called ‘‘IT Enabled Services’’
forming governance, namely ensuring transparency (ITES) (Government of Andhra Pradesh, 2002).
and accountability of government and a strong voice The latter are also known as business process out-
for the population (Government of Andhra Pradesh, sourcing (BPO), and include such services as medi-
1999, p. 10). The aim was to profoundly modify the cal transcriptions, accounting and billing services,
state’s economy in order to favour it integration into call centres, and also engineering design. The policy
the national and global economies. Clearly the idea extended some of the incentives to IT infrastructure
was to ‘‘leapfrog’’ conventional development stages, companies, such as those building IT parks, and to
i.e. labour-intensive manufacturing, and take advan- telecommunications companies.
tage of opportunities created by new technologies to Numerous incentives were designed to attract
break into knowledge intensive, high value added investment to the IT sector, many granted automat-
sectors with strong growth potential.10 The tremen- ically, such as: exemption from purview of statutory
dous capital investment required for this massive power cuts, exemption from inspections under most
restructuring project was to be provided by the pri- labour laws12 in exchange for self-certification, and
vate sector, while the role of the state was to facili- permission for three-shift operation. Incentives that
tate by providing a conducive atmosphere for are not automatic but for which a company may ap-
business, including administrative transparency and ply include: a 25% rebate in power tariff, a 50%
strong legal institutions. Governance reforms were reimbursement of registration fee, stamp duty and
thus emphasised as part of the overall strategy for transfer of property duty, exemption from zoning
the making the state an attractive place for business, regulations, and a rebate on the cost of land. (Gov-
ernment of Andhra Pradesh, 2002). The last two
items are particularly relevant for this study, as they
8 have a direct impact on peri-urban spaces.
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 politics
without interruption for about thirty years. The TDP was largely
11
constructed on the basis of Telugu regional identity, which Interview by author, J.A. Chowdary, former director of the
crystallized during the colonial period and combines linguistic Bangalore and Hyderabad branches of the Software Technology
and territorial dimensions. Parks of India, in Hyderabad, 23 November 2002.
10 12
It was proposed, for instance, that agriculture’s contribution to These include: The Factories Act 1948, The Maternity Benefit
state domestic product be reduced over twenty years from 33% to Act 1961, The Contract Labour Act 1970, The Payment of
12% and that the service sector’s contribution be increased from Minimum Wages Act 1936, The Employment Exchanges (Com-
nearly 50% to 67%. pulsory Notification of Vacancies) Act 1959.

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

IT software units have been exempted from most developing industrial estates and facilitating large
zoning regulations including those designated as investment projects. In the case of Hyderabad, the
conservation/agricultural use, residential use, com- plots offered by the government are located mainly
mercial use and institutional use, and from payment in the peri-urban areas on the city’s periphery. In
of conversion charges (Government of Andhra Pra- particular large tracts have been reserved in the wes-
desh, 2002, Annex IV). IT parks, including those tern periphery for specialised parks, like HITEC
developed by private builders, are also exempted City (cf. below), where numerous large firms have
from these same zoning regulations, with the excep- set up office space on extensive campuses.
tion of land designated for agricultural use, and here Policy-makers in Naidu’s government gave partic-
also land-use conversion charges are waived. It is ular emphasis to ITES, which has a greater capacity
interesting to note that these parks must meet to create employment and where Hyderabad is con-
certain conditions laid out in the policy i.e., mini- sidered to have strong potential. This is a fast-grow-
mum area of 4000 square meters, provision of tele- ing sector in the global economy, around 60% per
communication infrastructure such as optic fibre year for off-shore, and India is well placed to benefit
connectivity, and access to the satellite earth station from this market.16 According to data provided by a
(Government of Andhra Pradesh, 2002, pp. 9–10). government agency, Hyderabad had the fastest
100% on-site power back-up to support office equip- growth rate in India for ITES between 2000 and
ment and lighting must be provided, and in terms of 2002, measured in terms of export value of services.
amenities, all buildings must meet minimum floor It should be noted, however, that in absolute value
space and floor to ceiling norms, and provide air- terms, its exports were far behind the National Cap-
conditioning and parking, as well as 24-h security. ital Region (including Delhi, Gurgaon, and Noida).
With these strict mandatory requirements the state Hyderabad’s advantages include a large number of
government clearly wants to ensure a minimum level graduates (B.Sc/B.E./B.Com), and relatively lower
of quality in infrastructure, to meet its claim that wage rates than other metro cities in the country.
Hyderabad’s IT environment meets international In order to promote this fast-growing sector, ITES
standards.13 was declared as an ‘‘essential services’’ industry
and companies are authorized to operate 24 hours
Rebate on government land a day, 7 days a week, 365 days a year. Among finan-
A rebate in the cost of land is a key provision of the cial incentives for this sub-sector, an investment sub-
IT policy linking financial incentives in the form of sidy of 20%, up to a limit of 2 million Rupees
land rebate to employment creation. IT companies (approx. 354,400 Euros), is available. To meet the la-
can receive a rebate of 20,000 Rupees14 per job cre- bour requirements, the government set up a subsi-
ated, to be put toward the cost of undeveloped land. dized training facility specifically geared for call
In order to avail of the rebate, a minimum number of centre operations.17 This pragmatic stance offers fur-
100 employees must be hired.15 Interestingly, the ther evidence of the state’s determination to actively
policy also includes an incentive for paying higher steer the growth process, and not wait for market
salaries: for employment to be considered, the mini- forces to lead.
mum gross salary must be 5000 Rupees per month.
The land rebate provision clearly illustrates the Building HITEC City on the periphery of
government’s direct participation in identifying spe- Hyderabad
cific zones in which IT companies can establish
themselves, and its willingness to use public re- In addition to creating a conducive policy environ-
sources, here government-owned land, to buttress ment, Naidu’s government was the main driving force
its growth policies. The rebate only applies to lands behind the realisation of HITEC City i.e., Hyderabad
allotted by the government and its agencies, primar- Information Technology Engineering Consultancy
ily the Andhra Pradesh Industrial Infrastructure City, a large-scale industrial park dedicated to IT
Corporation (APIIC), the main body in charge of and related activities. HITEC city is situated about
20 km from the centre of Hyderabad, towards the
west, and approximately the same distance from the
airport (see Figure 1). It is the result of a public–
13
The ICT Act includes a second list, which outlines optional but
‘‘desirable amenities’’ for IT parks that include a food court and a
health club (‘‘equipped with an aerobics studio, games area,
16
karaoke lounge . . .’’). It is stated that large parks (over 1,000,000 It is estimated that India captured 55% of the total market of
square feet or 93,000 square metres) are expected to plan for outsourced services in 2002. The sectors most concerned are banks
residential, retail and entertainment infrastructure (Government of and financial services, followed by telecommunications and
Andhra Pradesh, 2002, p. 11). industry.
14 17
One Rupee is worth approximately 0.019 Euros, or expressed According to an official interviewed in early 2003, the govern-
differently, one Euro is worth about 54 Rupees (January 2006). ment saw its role here as temporary and planned to withdraw as
15
Companies availing of this rebate are not eligible for other soon as private sector companies came up to take over. Interview
incentives such as investment subsidy, exemption of stamp duty, by author, Sulaksh Dikshit, AP First manager (marketing), 3 April
etc. 2003.

99
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

Figure 1 HITEC City in Hyderabad’s western suburbs.

private partnership (PPP) between the government, much of the basic infrastructure here is the ‘‘deemed
through the APIIC, which provided the land in the local body’’ i.e., the local administration, for this en-
form of equity, and a private promoter, which man- tire zone and constitutes the interface between the
ages the park. Located on a large campus, nearly firms and various utilities, regulatory bodies, and
65 ha, the concept and site are explicitly modelled branches of government.
on successful international examples (Hsinchu Sci- It should be noted here that the architectural style
ence-based Industrial Park in Taiwan, and Research of HITEC City and of the large office buildings built
Triangle Park in North Carolina). The main architec- by IT firms, the vast landscaped campuses, and the
tural features of the first phase of HITEC City are remarkable quality of the roads mark a striking con-
three large office buildings: Cyber Towers, a ten- trast with the surrounding environment, which is
story futuristic high-rise inaugurated in November generally dry and rocky and poorly equipped in ba-
1998, Cyber Gateway, a larger complex completed sic infrastructure. In this way, HITEC City is ac-
in 2001 and Cyber Pearl in late 2004 (see Figure 2). tively contributing to the formation of highly
In this same locality, the government is involved in differentiated ‘‘mixed spaces’’ midway between ur-
a second large-scale PPP called ‘‘Mind Space’ cover- ban centres and rural spaces that characterise peri-
ing 45 ha, currently under construction (see Figure 3). urbanisation (cf. Dupont’s introduction to this issue)
Besides the main office buildings, which offer fully (see Figure 4).
equipped ready-to-purchase or lease space, 50% of Apart from the spatial and environmental impacts
the HITEC City campus is reserved for private firms of such large-scale projects, the increasing impor-
wishing to erect their own facilities. Moreover, in the tance of private actors in providing and managing
vicinity numerous Indian and international firms, infrastructure has important implications for urban
including famous names like Infosys, Wipro and governance. PPPs have played a critical role in HI-
Microsoft have established their own offices on plots TEC City, and also for setting up the reputed Inter-
designated by the APIIC.18 The infrastructure facil- national Institute of Information Technology, an
ities that are extended to these customised premises engineering school that offers specialised training
include: roads, water supply, drainage, street lighting courses through ‘‘corporate schools’’ sponsored by
and provision for data and voice connectivity. Inter- prominent IT firms. On its own, the private sector
estingly, the APIIC, the public agency that built has set up numerous educational institutions in the
immediate area, including exclusive residential
schools. The Indian Business School was established
18
Some of these plots, which are provided by the government at in partnership with several internationally recogni-
nominal cost as part of the overall IT policy, are as large as 24 ha. sed management institutions including the Kellogg

100
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

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

School of Management, the Wharton School and the of land. According to the Hyderabad branch of Soft-
London Business School. These specialised institu- ware Technology Parks of India (STPI)20 software
tions reflect the global orientation of the economic exports from Andhra Pradesh increased from
policies and the preference for private sector service roughly 13 million dollars US in 1995–1996 to more
providers, ostensibly as a gage of quality and than one billion dollars in 2003–2004 (1109 million
transparency. USD). In the same period, the number of companies
registered with STPI and in operation rose from 31
Performance of the IT sector to 860, providing employment to nearly 86,000 per-
Various indicators show that the IT sector has devel- sons, of which nearly 77,000 are technical staff. All
oped quite significantly in recent years, and it ap- but 80 of these units are located in Hyderabad and
pears to be one of the more dynamic sectors in the surrounding suburbs.
city.19 Based on data concerning large investment The break-down of exports by sub-sector, pre-
projects, IT investments in HITEC City and sur- sented below (see Table 1), gives an indication of
rounding area were estimated to account for over the structure of the industry. ITES have been on
70% of the total investments under implementation the rise in the last few years and now generate
in Hyderabad in the late 1990s (Shaw, 1999, p. 976). roughly half of total exports.
Public sector spending, mainly on infrastructure, was
estimated at less than 10% of total, but this figure
may not take account of public equity in the form
20
Software Technology Parks of India is an autonomous agency
set up in 1990 by the Ministry of Communications and Information
19
There are no official city-level economic statistics produced in Technology, Government of India. I thank Bart Rijken for the
India, so estimates have to be used. compiled figures.

101
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

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.

Notwithstanding the remarkable performance of transport’’ (Government of Andhra Pradesh, 2001,


IT industry in Hyderabad, it is no doubt still too p. 1). A Master Plan for CDA was drawn up with
early to evaluate the capacity of HITEC City to sus- the help of special consultants defining specific land
tain its growth and develop into an innovative indus- use zoning regulations and building regulations in
trial district. Be that as it may, it is undeniable that order to ‘‘provide a framework for the creation of
government-led efforts have resulted in new invest- high quality infrastructure’’. To finance the creation
ments and put Hyderabad on the map as a high-tech of capital infrastructure such as road and urban ame-
hub in India, alongside Bangalore and Chennai. nities, the plan provides for raising resources inter-
nally by way of user charges, but also external
The making of place: Cyberabad ex nihilo betterment charges, and changes in the structure of
In January 2001 the government of Andhra Pradesh property tax and recovery rates.
created the ‘‘Cyberabad Development Area’’ The area, which covers 52 square kilometres, was
(CDA) with the purpose of developing a large area carved out of Seriligampally Muncipality and con-
around HITEC City into a model enclave (see Fig- sists of 17 revenue villages (cf. Figure 6). Currently
ure 5).21 The stated goal: to create an enclave that the cluster around HITEC City, with its impressive
‘‘will become a model for other urban areas in the buildings and state-of-the art infrastructure, occu-
country by providing clean air and water, high qual- pies only a small portion of CDA. Although numer-
ity of services such as sanitation and waste manage- ous commercial and residential buildings are under
ment, and the best standards of power, housing and construction, primarily along the main roads, there
are still plenty of open spaces. Major efforts have
been undertaken to connect the area to the city,
21
See Government Order Ms No. 21 MA, dated 20 January 2001. via wide well-maintained concrete roads, and

102
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

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 2003– ple employed at HITEC City, these suburbs offer
04 (%) many amenities such as luxury hotels, restaurants,
ITES 46.70
shops and entertainment. The promoters of HITEC
Application software 10.50 City, and urban planners at CDA have planned
System software 7.30 housing colonies, commercial buildings, as well as
Application re-engineering 4.03 recreation facilities, the idea being to create a self-
E-commerce/web applications 7.50 reliant ‘techno’ township. As Véronique Dupont
Consultancy services 4.25
Communication software 7.85 demonstrated in the case of Delhi, these various ef-
ERP/client server 9.37 forts contribute to the creation ex nihilo of new
VLSI and embedded software 2.50 areas capable of providing upper income groups
with the kind of working and living conditions to
Source. Compiled by B. Rijken, with data from STPI, Hyderabad. which they aspire (2001). These are becoming
increasingly self-sufficient areas, capable of meeting
all the needs of the residents, and do not appear to
through a recently inaugurated mass transit com- be particularly integrated in Hyderabad’s urban
muter train. A new ring road is being built and will fabric.
facilitate links to the planned international airport at
Shamshabad, south of the city. When approaching
HITEC City from the centre of Hyderabad the road A knowledge corridor bridging Hyderabad and
travels through Banjara Hills and Jubilee Hills, both Bangalore
of which are affluent residential areas. In addition to In addition to planning numerous specialised enter-
providing attractive housing opportunities for peo- prise parks in Hyderabad’s western periphery, and

103
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

Figure 5 Cyberabad development area – CDA.

promoting private educational and training institu- The State will need to develop a much larger area
tions, Vision 2020 includes plans for a ‘‘knowledge than HITEC City as the State’s IT hub and equip it
corridor’’ consisting of three high-tech zones, each with world class facilities. HITEC City is only one
dedicated to a particular sector of activity: biotech- square kilometre whereas the US’ Silicon Valley is
nology/medical research, industrial technologies an 80 km strip and Malaysia’s Multimedia Super
and IT enabled remote services (Government of Corridor (MSC) is a 750 km strip. By planning a
Andhra Pradesh, 1999). A schematic map indicates large location early, Andhra Pradesh will be able to
the three zones will skirt around Hyderabad on the avoid the unnecessary congestion that occurred in
western, south-western and southern borders, with some states and keep real estate prices at reasonable
extensions from HITEC city toward the south along levels for a longer period of time (Government of
a planned Hyderabad–Bangalore expressway.22 What Andhra Pradesh, 1999, p. 282).
is clearly stated is that the government intends to de- An international airport, to be built and
velop a ‘‘large area’’23 to the south of Hyderabad in managed by the private sector, is under construc-
order to ensure a scale proportionate to the state’s tion at Shamshabad and is considered a very
ambitions and to international examples it is trying important element of the overall strategy. About
to emulate: 20 km southwest of the city, it will be accessible
by a national highway connecting Hyderabad with
22
Bangalore. Like for Cyberabad, a special statutory
Bangalore, India’s IT capital, is located about 560 km from authority has been created called HADA,
Hyderabad.
23
A recent press report indicated 20,000 acres (8094 ha). cf.
Hyderabad Airport Development Authority. With
‘‘More land identified for IT firms’’, The Hindu, 4 August 2005, a jurisdiction of 458 km2, HADA’s mission is to
Hyderabad edition. promote planned development in and around the

104
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

to Nizamabad to Nagpur
NH 7

to Mumbai Kukatpally
Kukatpally

NH 9
Alwal
Qutubullapur

to Kazipet
Kukatpally
Serilingampally Kapra
SC Malkajigiri
to Mumbai
CDA
Uppal
MCH Musi River

L.B.Nagar

NH 9

Rajendranagar to Vijayawada
Gaddiannaram
Gaddi annaram

Proposed
International
NH 7 Airport
to Bangalore INDIA

10 km Hyderabad
ANDHRA
PRADESH
MCH - Municipal Corporation of Hyderabad

SC - Secunderabad Cantonment

CDA - Cyberabad Development Area Boundary of Hyderabad Urban Development Authority (HUDA)

Municipalities Major Roads

Water Bodies Railways


Source: HUDA Draft Master Plan (2003)
Graphic design : Aimée Lafitte (CNRS, ADES)

Figure 6 Hyderabad urban agglomeration (within HUDA area).

airport, and act as the coordinator between under CDA, HADA covers a largely rural
government and the various agencies concerned. area. Shamsabad is the largest settlement with
A Master Plan outlines the development strategy, less than 20 000 inhabitants, the remaining
including stipulations on land use and building settlements are classified as villages and hamlets
requirements. Even more so than the area falling (HADA Draft Master Plan 2005, p. 12). The

105
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

total population in 2001 was just above ment logics’’ generally.27 In this context, two remarks
154,000, and it is projected to reach 2 million by are in order. Firstly, patterns of social and spatial seg-
2021.24 regation are best understood within their specific so-
cial and historical contexts, and policy choices with
regard to public utilities generally reflect broader so-
Glocal scalar ‘‘fixes’’ and global city-regions cial institutions (Lorrain, 2005, p. 24). Secondly, in a
Both CDA and HADA resemble textbook examples global context where spaces in developed and devel-
of ‘‘glocal fixes’’, i.e. place-specific production com- oping countries are increasingly in direct competition
plexes, which are the outcome of a strategic approach for capital investment, these strategies may be the
to infrastructure development that seeks to facilitate most effective, from the point of view of the latter,
capital accumulation through intense global-local for overcoming, albeit partially, infrastructural weak-
interaction.25 These fixes, often in the form of science ness and increasing capacity for promoting economic
parks or enterprise zones, involve providing excel- growth. An evaluation of the consequences would
lent quality technical networks and services to attract necessarily involve taking into consideration the
firms, often custom designed for their needs. This overall policy approach, including efforts to redis-
strategy has been interpreted, notably by Brenner tribute wealth generated by these global growth
(1998, 2004), as a rescaling of the state territorial sectors.
organisation as it involves the creation of a localised
framework for intensifying productive forces, here Weak political mobilisation
‘‘special development areas’’, governed by specific The growth strategies being deployed in Hyderabad
rules and regulations. Instead of applying a uniform are identical in many respects to those observed in
regulatory regime throughout the national (or regio- large cities across the globe, in both developed and
nal) territory, fitting out specialised spaces allows developing countries. Likewise, one observes similar
policy-makers to offer what investors are seeking, patterns with regard to the types of economic and
and what they themselves are unable to provide to commercial activities that are most dynamic (busi-
the territory as a whole. Rescaling is a compelling ness services, high-technology industries and ser-
concept, and one that appears quite powerful for vices, shopping and entertainment complexes). In
explaining the current trend of city-focused growth many ways then Hyderabad manifests key character-
strategies in India, deployed by both central and re- istics of global city-regions explored in Scott et al.
gional governments. Notwithstanding, rescaling (2001); not surprisingly it has more affinities with
strategies, premised on uneven spatial development, city-regions in developing countries which ‘‘. . . rep-
are strongly contested. It is argued in particular that resent the best and the worst of the development
they exacerbate urban fragmentation to the extent process. They are places where highly productive
that they involve improving services for powerful and innovative economies are often in evidence,
users while bypassing economically or socially weak- but they are also places where the multi-faceted
er groups.26 Within the HITEC City enclave, there is market failures, historical imbalances, and brutal
clearly a case of increasing differentiation in service power relations of the development process are
levels at the local scale, and in this sense it effectively painfully in evidence.’’ (Scott et al., 2001, p. 26).
combines global connectivity and local disconnection However, Hyderabad diverges from the global
(Graham and Marvin, 2001, p. 377). However, there city-region framework in one important aspect,
has not been a deterioration in local services levels, namely the lack of political mobilisation at the
and in some cases there appears to have been slight metropolitan scale, observed in other city-regions,
improvement. This observation joins other recent whose objective is to build regional political compe-
scholarship in underscoring the necessity for precau- tence ‘‘. . . in pursuit of mutual aid and advantage in
tion when transposing across diverse political and the face of the mounting challenges that globaliza-
cultural situations assumptions about the conse- tion is now bringing to the fore at the local level’’
quences of specific policies and of ‘‘uneven develop-
(Scott, 2001, p. 4).28 City-level political representa-
tives in Hyderabad as well as in the surrounding
24
municipalities have been conspicuously absent from
Some local environmental groups opposed the planned inter- the policy process at every stage, from the broad
national airport at Shamshabad on grounds that it violated existing
statutes protecting water bodies. The public interest litigation filed
vision statement to the specifics of sectoral policies.
with the Supreme Court by the NGO, Forum for a Better Indeed, even within the administration the planning
Hyderabad, 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 preliminary
27
synthesis of this literature. On Mumbai, see Zérah, 2003. On cities in sub-Saharan Africa,
26
Stephen Graham defines ‘‘premium networked spaces’’ as see Jaglin, 2005. For a recent critical appraisal of the ‘‘splintering
follows: ‘‘new or retrofitted transport, telecommunications, power urbanism’’ thesis elaborated by Graham and Marvin (2001), see
or water infrastructures that are customized precisely to the needs Coutard et al. (2005).
28
of powerful users and spaces, whilst bypassing less powerful users This point is explored in more detail in Kennedy and Ramach-
and spaces’’ 2000, p. 185. andraiah (2006).

106
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

authorities for the Hyderabad metropolitan area technical capabilities and improving possibilities
were not consulted about the decision to create for resource mobilisation. Such justifications are no
CDA.29 In the period examined here, the state gov- doubt founded, and indeed they are in line with
ernment indulged in a classic top-down decision- emerging norms at the national level. Locally, the
making process, which is emblematic of the political need for metropolitan planning appears ever more
culture in Andhra Pradesh and in many Indian urgent as more and more suburban spaces are being
states. Attempts by the central government to developed, albeit selectively as we have seen,
strengthen political decentralisation in both urban increasing spatial differentiation. However, the ab-
and rural areas, most recently through constitutional sence of political debate, indeed the total lack of
amendments, have not always met with success, prior consultation, has soured the proposal for many
although situations vary enormously across regions. local political actors and may compromise its ulti-
Civil society organisations, often with support from mate success. A more palatable proposal may be
international NGOs, continue to demand more to conserve existing local bodies, while still creating
effective democratic decentralisation while an overarching metropolitan body, perhaps with
denouncing political corruption at all levels.30 One indirectly elected representatives from the corpora-
key question that arises here, which will require fur- tion and the surrounding municipalities and towns.33
ther research, is the extent to which such top-down Given the themes discussed in this paper, it is inter-
decision-making, in conjunction with regulatory esting to note that one of the six reasons listed in the
tools that carve out selected areas for development notification for constituting the Greater Hyderabad
within largely undeveloped peri-urban spaces, are Municipal Corporation refers explicitly to the state’s
effectively weakening prospects for participatory ur- economic strategy: ‘‘to make the city internationally
ban governance at the metropolitan scale. There is competitive with world class infrastructure and
at present a distinct contradiction between the gov- services’’.
ernment’s rhetoric, which emphasises its commit- This example illustrates how global models are
ment to improving popular participation, and its selectively chosen in Andhra Pradesh: whereas the
actions, which have excluded both elected represen- state government has been very clear about its com-
tatives and civil society organisations from the policy mitment to city-centric, infrastructure-led growth, it
process. has granted scarce attention to governance issues.
The international literature on strategic urban plan-
Greater Hyderabad on the horizon? ning stresses the importance of engaging a political
Interestingly, the state government recently issued a process with the major social and economic groups.
proposal that, if enacted, would lead to the forma- Although, as Stren points out, the ability of civil
tion of a political entity at the metropolitan level, society and specific stakeholders to participate in
the Greater Hyderabad Municipal Corporation. setting the agenda and devising policies depends
This would be formed by merging the municipalities on ‘‘how well (they) are engaged with municipal
and small towns surrounding Hyderabad.31 This pro- institutions, and how much power and effective
posal was not publicly discussed before the authority these institutions command.’’ (2001,
announcement of the Government Order, again p. 206, emphasis added). This is a reminder that,
symptomatic of top-down political practices, and even in the event that the Greater Hyderabad Muni-
met with hostility from the elected councillors of cipal Corporation is created, it will not suffice to
the Hyderabad Municipal Corporation, a majority automatically transform the relationship between ci-
of whom voted against it (75%).32 The fate of this vil society and the state. In Hyderabad, for now,
initiative is unclear at present, but it seems likely metropolitan governance is dominated by a strong
that the state government will pursue it, citing the state, which sets the priorities and pursues them in
necessity of creating an appropriate management a top-down manner. Although new actors are pres-
structure for coordinating overall city level systems, ent on the scene, they tend to represent private eco-
(e.g., road network, water supply and drainage net- nomic interests, and the consultation process with
work, public transport system, etc.) consolidating the state, to the extent it takes place, is mainly
through informal channels.

29
Interview with a senior planning officer, Hyderabad Urban Conclusion
Development Authority, Hyderabad 25 November 2002. The main objective of this paper was to examine
30
Lok Satta (People Power) is an example of a powerful NGO,
based in Hyderabad, that focuses on political and governance how efforts to promote growth in the southern In-
reforms in its pursuit of development goals. See www.loksatta.org.
31
Cf. G.O.Ms. No. 704, Municipal Administration and Urban
Development Department, Government of Andhra Pradesh, dated
33
20th July 2005. cf. http://www.aponline.gov.in/apportal/depart- This would be less threatening perhaps to the dominant political
ments/GosbyDepts.asp. party in Hyderabad, the Majlis-e-Ittehadul Muslimeen, whose
32
Cf. ‘‘Majority corporators vote aginst Greater Hyderabad constituency is based in Hyderabad City, and whose political
proposal’’, The Hindu, 5 August 2005, Hyderabad edition. survival is directly threatened by the Greater Hyderabad proposal.

107
Regional industrial policies driving peri-urban dynamics in Hyderabad, India: L Kennedy

dian state of Andhra Pradesh are impacting the sense, the state government constitutes the key ac-
Hyderabad metropolitan region and the conse- tor of urban governance in Hyderabad; indeed
quences for urban governance. As we have seen, other local actors are conspicuously absent from
the state government’s growth strategies, based on the policy process. Governance continues to be
high-tech industries and services and large-scale characterised by centralised political institutions.
infrastructure projects, largely targeted Hyderabad In the economic sphere, interface with investing
and its peri-urban periphery. To promote the IT sec- firms is carefully controlled by government agen-
tor, a dual strategy was engaged: on one hand, an cies. Such institutional arrangements in conjunc-
aggressive policy offers numerous incentives to tion with special regulatory frameworks like
investors, including concessions on land, on the CDA and HADA would appear to weaken pros-
other hand, specially designed enterprise parks are pects for governance institutions at the metropoli-
being built in peri-urban areas through public-pri- tan scale.
vate partnerships, and fitted out with ‘‘world-class’’
infrastructure. The analysis focused considerable
attention on the case of HITEC City, the most Acknowledgements
prominent IT park. Of particular interest is the fact
I am grateful to Dr. Véronique Dupont for provid-
that the state government designed a special regula-
tory framework for the park and for a large area ing me with an opportunity to present a first draft
around it, the Cyberabad Development Authority, of this paper at the workshop she organised in
with the stated purpose of developing it into a ‘mod- New Delhi in 2004. I would also like to thank Dr.
el enclave’. It was argued that this regulatory tool Marie-Hélène Zérah for her suggestions, and two
constitutes a key component of a reterritorialisation anonymous referees for their valuable comments.
strategy, here the creation of a new territory The usual disclaimers apply.
equipped with excellent quality infrastructure and
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