There were 180 million more Indians in 2011 than a decade ago. Around half this increase in population came from the villages and half from the cities. The urban population actually grew slightly more than the rural population, perhaps for the first time in Indian history.

The big picture is generally known. It is in the disaggregated data calculated from the 2011 census that the story becomes really interesting. The rate of rural population growth has plummeted in all states other than Rajasthan, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh and Orissa (see chart). A simple extrapolation from that chart suggests that 27 Indian states are likely to begin seeing shrinking rural populations in this decade, a monumental demographic change.

Four states have actually seen their rural populations decline since 2001: Kerala, Goa, Nagaland and Sikkim. The rural population of Andhra Pradesh has almost stagnated. It is growing at a very sluggish rate in at least 10 other states. Meanwhile, there is a noticeable asymmetry: Nearly half of the total rural population growth across India is accounted for by two politically important states—Uttar Pradesh and Bihar.

Part of this change in population dynamics is undoubtedly because more than 2,500 settlements that were defined as villages in 2001 have been reclassified as towns in 2011. But the overall pattern cannot be doubted: the main theatre of population growth in large swathes of the country is now in the urban areas.

But political power in New Delhi may vest with states that will still have growing villages. So one group of Indian states may have strong incentives to change public policy in favour of the cities while another set of states will have incentives to protect the status quo. Will this lead to ugly tensions between states, especially given the fact that there is such a marked difference between the states of the Hindi heartland versus the states of peninsular India?

An earlier instalment of this column had focused on a growing federal paradox: financial power is being concentrated in New Delhi while political power could get dispersed to the states after 2014 (http://bit.ly/XnMkke). This fault line could lead to intense bargaining for resources in the Indian political system, with powerful regional satraps trying to leverage their political clout to demand funds from the Union government. Nitish Kumar and Mamata Banerjee have already shown the way.

The diverse demographic dynamics in Indian states could add another layer of complexity to the federal paradox. This can have implications not only during elections but also in determining the direction of public policy.

Indian public policy suffers from a well-known Gandhian bias, with a pious belief in rural development even though development patterns the world over show that countries have emerged out of poverty through urbanization. B.R. Ambedkar, who had a very direct experience of social oppression, had little patience with the glorification of village life: “The love of the intellectual Indian for the village community is of course infinite, if not pathetic… What is a village but a sink of localism, a den of ignorance, narrow mindedness and communalism?"

But what is less well known is that Ambedkar was a trained economist who argued in one of his earliest papers, written in 1918, that India needed to help people migrate from agriculture to industry: “A large agricultural population with the lowest proportion of land in actual cultivation means that a large part of the agricultural population is superfluous and idle…this labour when productively employed will cease to live by predation as it does today, and will not only earn its keep but will give us surplus; and more surplus means more capital. In short, strange as it may seem, industrialization of India is the soundest remedy for the agricultural problems of India".

There has been a robust debate in India on the relative merits of the Gandhian versus Ambedkarite visions on the direction the country should take in the future. The varying demographic trends in modern India—especially the rapid decline in rural population growth in some states—could create disagreements in the political system that in some ways echo the old debates on a rural versus urban future.

Niranjan Rajadhyaksha is executive editor of Mint. Your comments are welcome at cafeeconomics@livemint.com. To read Niranjan Rajadhyaksha’s previous columns, go to www.livemint.com/cafeeconomics

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