Waking up to urban realities

India is in the forefront of a wave of urban expansion across Asia. Like everywhere else across the world, urbanisation in India would go hand-in-hand with economic growth. Like every major country in the world, India would experience a shift in its population from a largely rural agrarian dwelling to life in urban cityscapes. The pace of this transformation may vary from time to time, but the process remains unalterable and irreversible. The virtuous cycle between productivity and economic growth is the key reason for urbanisation and increase in density of urban population. Urbanisation seems to be an inevitable trend in a country’s economic evolution.

Picture taken from here

In 1950, 17 per cent of the Indian population lived in cities; by 2005 it has gone up to 29 per cent. The pace seems to be moderate compared to China, where population living in the cities has gone up to 41 per cent from 13 per cent in the same period. In 1950, India was more urbanised compared to China.Today, China has left India far behind.

Picture taken from here

The advantage of cities is that they have agglomeration benefits. First, cities allow interaction that promotes productivity, which is an underlying driver of economic growth. Second, scale benefits offer the opportunity to significantly lower the cost of service delivery. This is particularly relevant for a country like India, which faces significant challenge of rapidly ramping up basic services to a large section of its population when funds are constrained. Read more

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