How slum dwellers contribute to Bangalore's economy

Urban poor living in slums of Bangalore contribute 3-3.5 per cent of the city's economy.

About 9-11 per cent of the city's population that lives in slums contribute between Rs 1,643 crore (Rs 16. 43 billion) to Rs 2,045 crore (Rs 20.45 billion) to Bangalore city's economy, estimated at Rs 58,164 crore (Rs 581.64 billion) in 2011.

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According to a study conducted by Kala S Sridhar and Venu Reddy of Public Affairs Centre, dedicated to improve the quality of governance in the country by using citizen centric research as a tool, the urban poor's contribution to the city economy is less than their proportion in the city population.

This is because they are relatively less skilled and less educated than the rest of the city.

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The study was supported by Public Affairs Foundation, as part of the Government of India's programme, Support to National Policies for Urban Poverty Reduction. A similar study for Chennai city has also been done and the findings will be released next month, Kala Sridhar said.

Out of this total contribution by the poor, households contribute between Rs 1,545 crore-Rs 1,923 crore (Rs 15.45 billion to Rs 19.23 billion) and the informal enterprises contribute somewhere in the range of Rs 98 crore (Rs 980 million) to Rs 122 crore (Rs 1.22 billion).

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With 30 per cent of the urban poor having a bank account, in the aggregate, the poor households earned a total of Rs 1,545 crore (Rs 15.45 billion), spent a total of Rs 1,185 crore (Rs 11.85 billion), and contributed a savings of Rs 360 crore (Rs 3.6 billion) to the city in 2011.

The study report has been submitted to the ministry of housing and urban poverty alleviation. The study findings are likely to be discussed at the international conference on inclusive urban planning being held in December in Delhi.

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The findings are likely to be used by the government for preparing an India Urban Poverty Report, which is being brought out by the ministry, Kala S Sridhar said.

"The urban poor are often blamed for many ills of the city including solid waste, sanitation and burden on public services. But, these poor population contribute significantly to the economy of Bangalore and governance by way of various services," she said.

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The urban poor not living in the slums have not been taken into account for this study. Bangalore's population according to the 2011 Census is 8.43 million, with an estimated poor population of 15-18 per cent or about 1.4 million.

The urban poor supply services to the city through driving, domestic work, construction, other labor and through operation of small enterprises.

The study estimates that about 65,000 drivers, 9,000 cooks and 73,000 domestic workers work from the slums of Bangalore.

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In addition, there were about 21 self-managed enterprises in each slum. The study finds that 86 per cent of the urban poor had TV and 7 per cent had a vehicle. Nearly 88 per cent of the urban poor had a mobile phone.

One-fifth of the poor households had two mobile phones. While nearly two-third of the households in the slums lived in their own dwelling, one-third of property owners in the city's slums paid property tax, the total amount of tax paid by the poor being  Rs 3.44 lakh in 2011.

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"Our survey of informal enterprises showed that most of them serviced and employed residents of the same slum, generating benefits for the local economy. They made profits and paid rent," she said.

The study findings regarding access to toilets in slums implies that there is potential for policy to influence and incentivise the entry of private service providers such as Sulabh International into slums, she added.