Posted in Urban India

Urbanization Trends in India

India is one of the many countries which has never got around to formulating a National Urban Policy, even seventy years after Independence, and successive governments have just thrown money at the myriad problems of unplanned and undirected urban growth, with scant results and a perpetually deteriorating quality of life. India has the dubious distinction of hosting 9 of the 10 most polluted cities in the world. Therefore, it is incumbent on any incoming Indian Government that its policy makers take a step back and look at the urbanization trends in the country, before more of its precious resources (including scarce urban land) are handed over to the private sector, in the name of smart cities, or housing for the poor, or some other gimmick.

The report of Census 2001 surprised urban experts by showing a downward trend in urbanization, first noticed in the 1991 Census, which had not been reversed, despite India’s notable successes on the economic front. Scholars of such phenomena had pinpointed four main reasons for this downturn :

  • As a result of the economic reforms of 1991, there had been a noticeable reduction in rural poverty, improvement in infrastructure and services, and a steady tertiarization of rural economies, reducing the flow of distress migration to cities
  • Secondly, with increasing global connectivity, the economic migration of people from small towns in search of education, skill building, and white-collar jobs, had reduced
  • Thirdly, villages on the periphery of big towns and/or with sizeable populations had resisted municipalization, chiefly because the local, landed power elite did not wish to relinquish control. The fear of higher taxation in an urban regime may also have dissuaded the rural citizenry, or perhaps, the host city (in a proposed merger) may have baulked at having its services and resources stretched over a wider area
  • Finally, it was believed that globalization itself was a cause for this downturn. As India transformed itself into a knowledge society, those on the wrong side of the digital and technological divide were put at a disadvantage. The knowledge sector tended to be capital intensive rather than labour intensive, and this discouraged unskilled labour from migrating.

In the following decade of 2001-2010, the changes wrought by globalization on Indian society were well entrenched and urbanization picked up once again because:

Liberalization brought foreign direct investment and MNCs demanded the dilution of India’s stringent, albeit humanitarian labour laws. Rightsizing and downsizing became the goal and social security (like pension schemes and medical aid) went out the door. This pushed more and more people into the informal sector, where they didn’t need to pay either direct or indirect taxes, and this in turn led to the further impoverishment of local bodies who had traditionally relied heavily on local business taxes like octroi.

In the long term, informalization has a very insidious and deleterious effect on local economies. Anybody and everybody can aspire to ‘learn on the job’ and work as a plumber or electrician on a construction project without any qualifications, using shoddy materials from any fly by night ‘factory’ with no safety standards, and get paid for it in cash with no tax paid at any stage. Is it any wonder then, that buildings and bridges collapsing in Indian cities are a regular occurrence? And nobody is held accountable. Informalization also leads to extremely exploitative trade and labour practices, encourages forced labour and child labour, higher school dropout rates, and generally weakens a country’s human capital, so that one generation down the line, we have clearly lost our demographic dividend.

Privatisation has led to a whole culture of unprecedented corruption and crony capitalism, especially in urban infrastructure. Even Government Schemes are now outsourced to private consultants, who have little or no local knowledge to make them effective and sustainable in the long run. The corporatization of basic municipal services, such as water supply and transport, further eats into the earnings of the local body and diminishes, rather than builds the capacity of municipal personnel. Further, unlike elected representatives, the bosses of these private and public corporates are not accountable to the people.

The boost given to construction once again made cities attractive and pull migration brought in both semi-skilled and unskilled labour, who stayed on to boost the urban population, eking out a living in the informal sector and living in increasingly squalid settlements.

It is noteworthy that although globalization and all its concomitants have dramatically raised the standards of living of the Indian urban middle class, and greatly reduced absolute poverty in the countryside, it has unfortunately skewed our priorities in favour of prestige projects like bullet trains instead of grassroots rail infrastructure; airports instead of bus stations; medical tourism instead of primary health care; business schools instead of primary schools; and so on.

The increased urbanization of India becomes quite clear in the Census 2011 report.

Urbanization in India

We see that by the time of the 2011 Census:

  • It was suddenly desirable to be urban’. The old landed elites had given way to the new rich, who had become wealthy beyond their wildest dreams by selling farmland on the peripheries of expanding metros, and now aspired for political power to match their financial clout – which could only happen in a new municipal/urban setting. This explains why although there were 7,935 towns in the country, only 468 or 6% had a population exceeding 100,000 (one lakh), that were home to around 265 million persons, constituting 70% of the total urban population! Which begs the question: what sort of towns (!) were the remaining 94%?
  • The 53 million-plus cities, where 42.6% of the urban population live, continued as the real ‘urban’ India. They were the hub of the old industrial sector and the new services sector. They continue to grow far beyond their carrying capacity and the impact on their environment has been devastating – whether through air pollution, toxicity in the food chain, dwindling groundwater, or recurring monsoon floods. These are the ‘generators of economic momentum’ for their regions and the country – pathetically inadequate, as their municipal governments are permanently impoverished, their tax bases are stagnant and non-viable, and informalization of both housing and the local economy is well over 40%.
  • The decline of the great urban symbols of British India, like Mumbai and Kolkata, foreshadowed in Census 2011, tell a sadder story: the abdication of power and responsibility by both, State and local governments, have given speculators a field day in these megacities, making real estate unaffordable to all but the super-rich. As the middle class gets pushed to the peripheries of these cities, the transport system reaches breaking point, and it makes more sense to opt for a relatively stress-free life in a smaller city. The archaic Rent Control Laws coupled with the absence of a clear title system prevents the growth of rental housing, further making these megacities unaffordable. With the exodus of formal sector economic activity to smaller metros/ towns, the vacuum is filled by the informal sector – reaching 68% in Mumbai, 62% in New Delhi, and 60% in Chennai.

The United Nations estimates that 40% of India’s population will be urban by 2030, but if our cities continue into the next decade on their present trajectory, life would be a living hell in some dystopian concrete jungle. So, before that scenario unfolds, let us urge the next government to seriously formulate a National Urban Policy to revitalize India’s cities through a four-pronged approach:

  • Firstly, the decentralization of local Government to manageable ward level, which will ensure greater stakeholder participation in governance and will be a check on the arbitrary decisions of huge Municipal Corporations and parastatals, some of which have budgets larger than that of several smaller State governments
  • Secondly, a neighbourhood approach to city planning which is more organic and more Indian
  • Thirdly, a commitment to heavy investment in education and health to provide sustainable livelihoods beginning in our million-plus cities
  • Finally, hand-holding support to poor communities to enable them to formalize large informal sub-economies, so that they are gradually integrated into the city’s formal economy and eventually into the national economy.


I am a trainer of Government Officials and Elected Representatives, specializing in the urban and municipal sector. I have also written extensively on Urban Governance, Poverty, Development, Social Accountability and Municipal Management in the Indian context, and wish to share these writings with you through this blog.

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