Whose Cities? India’s New Landscape of Capital, Surplus Labour and Poverty

The story of urbanisation in the Global South – and particularly in India – is not one of industrial expansion or prosperity. It is a story of pauperisation. Cities today are swelling not because factories are hiring, but because the countryside is expelling. This new urbanisation is driven by desperation rather than development – by the push of agrarian collapse, not the pull of industrial promise.

Unlike the West, where industrialisation absorbed surplus labour into productive chains, the Indian city has become a refuge of the dispossessed – a holding ground for millions of people excluded from stable work. Urbaniation here, as it unfolds before our eyes, is the geography of poverty itself. 

The inverted logic of urbanisation

In the classical European experience, urbanisation followed industrialisation. Cities grew as sites of production; rural workers migrated to meet the labour demands of factories, feeding a virtuous cycle of employment and services. But in the Global South – and India in particular – the relationship has inverted. Rural distress, climate vulnerability, and jobless growth have turned migration into an act of survival, not opportunity.

What we witness today is a push-dominated urbanism – one that produces sprawling informal settlements and precarious livelihoods. The urban economy, far from absorbing this influx, depends on its instability. The poor sustain the city while being excluded from its rights and entitlements.

India’s workforce reflects this distortion vividly. Over four-fifths of workers remain in the informal sector, surviving without contracts, wages, or social protection. Construction workers, street vendors, waste pickers, gig workers – these are the people who build and run the city, yet remain invisible to it. They are the permanent “outsiders” within.

Marx and the logic of surplus labour

Karl Marx foresaw this dynamic in Capital, Volume I. In his discussion of the “relative surplus population”, he described how capitalist accumulation constantly produces a reserve army of labour – those rendered redundant by technology or market shifts, yet still essential to keeping wages low and profits high. “The greater the social wealth,” Marx wrote, “the greater is the industrial reserve army.”

This surplus labour is not an accident of the system – it is its lifeblood. Capital needs the unemployed and the precariously employed to discipline the working class, to extract more from those still in work.

In India, this relative surplus population is vast – millions cycling between piecemeal jobs, informal trades, and sheer idleness. They are the floating mass that Marx described, the “lowest sediment” of society on which capitalist prosperity paradoxically rests. But what Marx could not have foreseen is that this surplus would become not just the byproduct of accumulation – but its very foundation.

When even the jobless generate profit

It is here that Yanis Varoufakis’s recent formulation becomes crucial. In Technofeudalism: What Killed Capitalism, he argues that we now live under cloud capitalism – a regime where profits are replaced by rents, and digital platforms have turned us all into “cloud serfs.”

For the first time in history, Varoufakis notes, capital accumulation occurs even when people are not working. Every click, every data trail, every online interaction becomes a source of rent extraction. The digital infrastructure – owned by monopolies –has converted even inactivity into value.

In this system, the Indian urban poor are doubly trapped. Offline, they are the relative surplus labour Marx described – disposable yet necessary. Online, they are data serfs, generating value for platforms that surveil and commodify their existence. Whether through gig work, digital payments, or social media, the new serfdom ensures that even non-work feeds capital’s appetite.

Thus, the paradox: never has so much capital been accumulated from those who have so little.

The Indian city as a site of exclusion and extraction

Indian cities today mirror this transformation. They are not centres of production but of extraction. The informal worker subsidises the formal economy through unpaid or underpaid labour. The street vendor sustains the food system; the construction worker builds infrastructure without housing rights; the waste picker maintains sanitation while living amidst waste.

The city feeds on their labour, yet denies them visibility, stability, and citizenship. Planning is for capital, not for people. “Smart city” projects and digital governance often deepen this divide – rendering labour invisible under the technocratic gloss of efficiency and innovation.

This urbanisation by poverty is not an aberration; it is the new face of accumulation in the South.

Kerala’s urban commission: A ray of possibility

Against this backdrop, the Kerala Urban Commission, established in 2023, offers a potential departure, this should not mean that there are systemic tectonic shifts, but the whole process of redistribution and co-governance is reinvisioned.

Conceived as a long-term urban roadmap, it aims to rethink how cities can be made inclusive, sustainable, and participatory. Kerala already stands apart with its decentralised governance and strong local institutions. The commission’s challenge – and opportunity – is to institutionalise this participatory ethos into urban co-production.

Co-production here means not simply consultation, but shared authority: workers, residents, and city officials jointly shaping how infrastructure, housing, and services are designed and delivered. It recognises that the right to the city must extend beyond property owners or professionals – it must include those who build and maintain the city’s life every day.

Workers’ councils and the co-production of the city

To reclaim the city from the logic of capital, a new governance architecture is essential – one grounded in workers’ councils. These councils would not replace trade unions; they would extend their legitimacy into the sphere of governance itself.

Imagine neighbourhood-level councils of construction workers, street vendors, sanitation workers, and gig workers deliberating on how their areas are planned, how budgets are allocated, how services are delivered. Their representatives, integrated into municipal forums, could participate in co-governing water systems, housing, waste management, or transport services.

Such a framework could democratise urban planning by embedding the working class directly into the decision-making structure of the city. It would turn governance from a managerial act into a collective act of production.

Trade unions, often confined to workplace struggles, would gain renewed relevance – as co-authors of the city itself. The workers’ council becomes not an adjunct, but a nucleus of urban democracy.

Reclaiming the right to the city

The idea of the right to the city, first articulated by Henri Lefebvre and later expanded by David Harvey, was never about access alone – it was about power. The right to the city is the right to shape urbanisation itself, to determine who the city is for and how it is built.

In India’s current context – where capital builds cities for speculation and exclusion – this right must be reclaimed from below. Workers’ councils, co-production models, and participatory governance are not utopian add-ons; they are democratic necessities in a landscape where millions remain urban without citizenship.

Urban India cannot continue to grow on the backs of its informal classes while denying them voice and visibility. The future of the city depends on whether it can be reimagined as a collective enterprise, not a commodity.

The city as commons

Marx’s surplus labour and Varoufakis’s cloud capitalism both converge to reveal a deeper truth: that the modern city has become the prime site of capitalist extraction. But it can also become the site of its resistance – where people reassert control over production, space, and governance.

Kerala’s experiment with participatory planning, if extended through workers’ councils, could illuminate a new model of urban democracy – one where those who make the city also govern it.

The challenge is immense, but so is the urgency. If urbanisation continues to be driven by poverty, the city itself will implode under the weight of inequality. The only antidote is a radical democratisation of urban power – to turn the surplus labour of the city into its sovereign citizenry.

For in the end, the city must belong to its workers – not as tenants of capital, but as its rightful makers.

Tikender Singh Panwar has authored three books on urbanisation. He is the former deputy mayor of Shimla, and currently a member of the Kerala Urban Commission.

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