Home >Market >Mark-to-market >Urban India to contribute three-fourths of GDP by 2020

The chart, from a report by Barclays Equity Research, shows that urban areas have been driving GDP growth in India. Moreover, India’s share of GDP coming from urban areas is still very low compared to China and Latin America. While urban areas are growing much faster than rural areas, the proportion of central government expenditure allocated for urban development department is far less than that allotted to rural development. Barclays says that with a per capita income of around $3000, urban India is similar to many middle-income economies. With more and more people moving to urban areas, the government will be forced to look at urban renewal. This, says Barclays, will benefit “1) urban consumption – the premium end of consumer staples and four wheelers; 2) urban services – consumer banking, private healthcare, telecom data services and internet; and 3) infrastructure sector – urban infrastructure services and real estate."

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