The Importance of Cities

January 22, 2008

This Indian Express anchor story on how Bihari migrants send 18 crore (180 million) rupees home through money orders every year gives me a warm fuzzy feeling. The money (heh!) quotes:

Noida’s post offices send out over Rs 36 crore a year through nearly 3.65 lakh money orders.

The rise in money orders shows the growth of Noida and its migrant population. Officials say migrant workers send 95 per cent of these.

Santosh Pradhan, who runs a paan shop in Sector 33, has been sending Rs 5,000 home every month. Noida has been good to Pradhan who has to look after a family of eight.

For a saada-paan I would get just a rupee in Bihar, whereas I sell it for Rs 4 here. The profit is more and that’s the reason my whole family is doing well now,” (emphasis mine – Aadisht) he says. Pradhan claims he has been able to repay all debts in his village and is now planning to buy some land there.

When he came to the city eight years ago, he could send only Rs 10,000 a year. Two years ago, he brought his wife and two children to the big city so that “they get better education and learn English and Maths and study among the children of rich people.”

(link)

Arising out of this:

  1. This is yet more real evidence against the widespread subconscious illusion that ‘India lives in her villages.’ The problem with that is that India makes a living in her cities, and most villagers would rather live in the cities.

  2. On that note, an Urbanisation Feeds poster on the lines of Samizdata’s Socialism Kills poster would be fun.

  3. And arising out of point 1, the whole motivation behind the National Rural Employment Guarantee Act is flawed, forget the structure and the implementation. It’s easier to generate wealth in cities and then send it to villages – so what public policy should be doing is creating cities – as Atanu Dey has repeatedly been pointing out.

  4. 1.8 crore commission on 36 crores of money orders works out to 5%. SBI charges 30 rupees on a demand draft, and 0.15% on electronics funds transfer (with a minimum of Rs. 100). According to the Boston Globe article I linked yesterday, Basix charges 2%. The post office is ripping people off, but that’s because they have to cover the costs of their brick-and-mortar infrastructure. In Basix’ case, they aren’t dragging overheads around. Mobile banking matters.