India’s Urban Snapshot
India has been the fastest growing major economy in the world, with an average growth of 7% from 2017-18 to 2018-19, and a consistently increasing share in the world’s GDP. It is the world’s seventh largest economy by nominal Gross Domestic Product (GDP) [Data source – State of the Economy in 2018-19: A Macro View, Economic Survey 2018-19] and the third largest by purchasing power parity (PPP) [Data source – State of the Economy in 2018-19: A Macro View, Economic Survey 2018-19]. As per the Ministry of Finance, India aspires to become a USD 5-trillion economy by 2024 and a USD 10-trillion economy by 2030.
There are over 4,400 statutory towns and cities in India with around 40 crores inhabitants today. At the current rate of growth, urban population in India is estimated to reach a staggering 60 crores by 2030 (WUP, 2018). According to Census 2011, as many as 53 cities in India had a million plus population. It is projected that more than 50% of the country’s population will be urban by 2050 (WUP, 2018). By some estimates, India needs to build a Chicago every year and is expected to see an influx of population of the size of the entire USA into its cities over the next decade.
The hypothesis that urbanization is necessarily beneficial for economic growth cannot be taken for granted. Our cities have to overcome a number of challenges in order to realize their potential as engines of growth. At present, 34% of India’s population lives in urban areas, with a growth rate of 2.4% in the 2010-18 period (World Urbanization Prospects, WUP, 2018). The level of urbanization in India is low as compared to the BRICS economies such as Brazil (86.6%), South Africa (66.4%) and China (59.2%) (WUP 2018). The level of urbanization across states is asymmetric. As per 2011 census, Tamil Nadu (48.4%) was the most urbanized among major states, followed by Kerala (47.7%), Maharashtra (45.2%) and Gujarat (42.6%). These four states together contributed to around one-third of the total urban population of India in 2011. States with low levels of urbanization were Himachal Pradesh (10%), Bihar (11.3%), Assam (14%), and Odisha (16.7%). 70 percent of the urban population is concentrated in close to 12% of its cities.
Indian cities suffer from inefficiencies of service delivery and severe stress on infrastructure. As India continues on its trajectory of growth, the quality of its urbanization will become paramount to ensure that this growth is sustainable and equitable. This requires a shift from business as usual to a long-term, integrated approach towards economic growth and urbanization.