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Urbanization: it’s happening, can we cope?

Urbanization: it’s happening, can we cope?
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First Published: Mon, Jul 18 2011. 01 15 AM IST

Updated: Mon, Jul 18 2011. 10 15 AM IST
Last week, the census commissioner released the second round of data, which showed that the move towards towns and cities received a fresh impetus in the decade ended 2011, as a result of which the country achieved a laudable milestone: a little under one in three Indians now lives in areas classified as urban, reversing a lull apparent in the previous two decades.
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This is something to be welcomed as in many ways it is a crude measure of development (another matter though how this urbanization is taking place) of the economy.
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But there are some other features of the data that stand out, which reflect both the opportunities and challenges of India’s urban future. One, as was reported by Mint on 16 July, the big upward push to urbanization, particularly in south India, in the last decade means that the political economy of the country is poised for change, particularly with respect to policy.
Resources will not necessarily be prioritized for rural areas, especially if the growing decay of the big metros such as Mumbai and Kolkata has to be reversed, if not arrested at the least.
Secondly, there has been a big spurt in the number of towns—up by over 50%. But here there is a subtle difference: the growth is in what are defined as census towns and not those declared by the administration (more of this later), suggesting a kind of below-the-radar urbanization, and may explain the big jump of urbanization in Kerala from 26% in the 2001 census to 47.7% in 2011.
Thirdly, there are enough markers, particularly anecdotally, of this urbanization trend inspiring migration from places as far away as Assam. This is to be particularly welcomed as it mixes up the country culturally, adding to its heterogeneity—compared with, say, relatively more homogeneous societies like the US.
It has been no secret that the big spurt in the country’s economic growth has been inspired by services—it now accounts for little under 60% of the gross domestic product, which measured $1.75 trillion in 2010-11. It was averred that this in turn was concentrated in urban areas.
The census data has only reaffirmed this trend. It revealed that the increase in the share of people living in urban areas was the fastest since the decade of 1971-1981, when it rose by 3.43%. In the decade ended 1991, the increase in the share of urban population decelerated to 2.37%, and to 2.10% in the following decade, before picking up sharply to 3.35% in the last decade— where it has for the first time risen to account for 31.16% of the country’s population.
The revival in tempo of urbanization, as said earlier, is welcome. But, what is worrying is that states such as Bihar, which is among the economically laggard states, show only around 10% urbanization.
What this means is that the rural versus urban debate will have to be nuanced to accommodate outliers such as Bihar if the country is to avoid the spectre of huge disparities in regional growth and attendant problems.
The fact that the big spurt in urbanization has been concentrated in the south should not be surprising, given that information technology services has been key in driving the growth trajectory in the last two decades.
The ecosystem it spawned—call centres, transport logistics, dedicated software parks and so on—has drawn in both skilled and unskilled workers (substantially greater numbers) in droves.
The recently released data of the National Sample Survey Office (NSSO) on employment reveals that there has been a big spurt in the number of casual workers in the economy between 2004-05 and 2009-10, the period in which the economy grew at a scorching rate of over 8% plus.
Growth has always acted as a magnet and hence not surprisingly fuelled, anecdotally apparent going by the multi-cuisine offerings and the raft of languages one can hear in metros such as Bangalore and Hyderabad, probably the biggest migration this country has seen in recent years; the empirical verdict on this will have to await the release of the census data on this characteristic later in the year.
However, the adverse reactions of conservative right-wing ethnic groups to new migrants only confirm this prima facie claim; in other words, India only got more plural—which can only mean that we will become more acceptable of the heterogeneity around us.
This leads us to the biggest surprise of the census data on urbanization trends: the emergence of towns. There are two types of towns—census towns, based on demographic data, and statutory towns, which have a municipality or corporation. The data reveals that between the 2001 and 2011 censuses, the number of statutory towns rose by 242 to 4,041, while census towns almost trebled to 3,894.
What this means is that the phenomenon of rapid growth is spawning urbanization that is not yet official. This is both good and bad for the denizens. The good part is that these areas continue to be classified as rural officially, and hence not only figure in the priority list for Union government resources, they also benefit from a lower property tax regime—something like the farmhouse culture afforded around Delhi by high networth individuals.
While this should be a matter of concern to the finance ministry as it is forgoing potential tax revenue, it holds larger implications of stoking an uncontrolled urban sprawl. Since it will continue to be governed by the panchayats, which would have limited bandwidth to address concerns of such a big population, there are limitations on the provision of basic civic amenities such as drinking water and education.
It may well be that the private sector has moved into the vacuum, but given the unsavoury experience of unregulated growth in education, this may not necessarily be desirable.
In the final analysis, it is clear that the phenomenal run of economic growth has provided a fresh momentum to urbanization. More qualitative conclusions will emerge from future iterations of the census data.
But from what is immediately available, it is clear that there are as many challenges as opportunity in the phenomena that we are witnessing. A lot will depend on the response of citizens and the government.
Graphic by Ahmed Raza Khan/Mint
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com
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First Published: Mon, Jul 18 2011. 01 15 AM IST