Nexus between infrastructure and environment is critical for India’s economic growth
India’s urbanization is growing at a rapid pace. We often think that massive urbanization acts as a growth engine for the economic development of any country. However, there is no simple linear relationship between urbanization and economic growth, or between city size and productivity. Experts said the potential for urbanization to promote growth is likely to depend on the quality of infrastructure and institutional frameworks.
Currently, about one third of the total population of India lives in cities. The trend shows an increase in urbanization of almost 4% over the last decade, which means that people have left rural areas to find work and earn a living in cities. A report said that in 2011, India added more people to its cities than to rural areas, for the first time since 1947. More than 90 lakhs were added to urban India every year, between 2001 and 2011.
The seven largest cities in the country will become even larger until 2030. Prospects suggest that population growth in Delhi, the capital of India, will increase by about a third over the next decade to 3, 89 million people.
What is urbanization?
Simply put, urbanization is the increase in the proportion of people living in cities. Several reports suggest that urbanization first occurred in high-income countries (HICs) during the industrial revolution. Rural people were drawn to urban areas from villages to work in factories. They have also been pushed as technological developments have led to the mechanization of farms. The situation in India was no different either. Urbanization in India is neither unique nor exclusive but akin to a global culture.
India’s road to urbanization
Urbanization in India has taken place as elsewhere in the world as part and product of economic change. The professional shift from the agrarian sector to industry and urban services is part of the change.
A report has shown that increasing agricultural performance has also promoted urbanization, as seen in several of India’s major rice and wheat producing districts. To cite a few examples, in the districts of Chengalpet, Krishna, Burdwan, Ludhiana or Kurukshetra, the percentage of urban population is found to be higher than the state average.
Urbanization and growth prospects
Urbanization is intrinsic to development and often serves as a major driver of economic growth, as stated by NITI Aayog in a report.
Considering the projected trend of urbanization, the multiple challenges facing cities and India’s commitments to global agendas, NITI in October 2020 constituted an Advisory Committee on “Reforms of Education in urban planning in India.
Snapshot of urbanization
- India is the second largest urban system in the world with around 11% of the total global urban population living in Indian cities.
- In absolute numbers, India’s urban population is larger than that of highly urbanized countries/regions in the world.
- The country has reached a turning point in its journey of economic transformation where half of the country will be “urban” in a few decades.
- Urban growth is expected to contribute 73% of the total population increase by 2036.
The role of urbanization
The Economic Advisory Council to the Prime Minister (EAC-PM), which published the “Competitiveness Roadmap for [email protected]”, has stated that urbanization is a crucial aspect of economic development and geography economic.
Urban areas must be presented as essential sources of economic performance and dynamism. For India, the relatively low speed of urbanization is one of the unique characteristics of the country. India has relatively modest internal migration flows, and much of this flow is within individual states. One possible explanation is the social structure of the country, where individuals are strongly rooted in their caste and local community and therefore less likely to move.
Slow urbanization matters because the economic structures of largely urban and largely rural districts differ significantly. Predominantly urban districts account for more than 55% of all wages paid in India, about 45% of all jobs, but only about 30% of all districts. Typical urban districts are considerably larger in terms of employment and have significantly higher salaries. The urban districts are distinguished by a greater focus on commercial centres: they represent 50% of the wage bill in these districts, compared to 25% in the rural districts.
In two-thirds of all traded cluster categories, urban districts account for more than 65% of all jobs. Within business clusters, urban districts earn higher salaries within individual cluster categories and focus more on cluster categories that tend to pay higher salaries, such as IT. The higher level of economic activity thus generated also pushes up local wages in urban districts. On average, negotiated wages in urban districts are about 17% higher than local wages. In the rural communes, they are at about the same level.
Skill intensity is often cited as one of the main differences between rural and urban districts. Indeed, rural districts have, on average, a significantly lower skill intensity than their urban counterparts. But this difference is almost entirely due to the composition of the clusters: urban districts are more specialized in skill-intensive trading clusters. For given cluster categories, the differences in skill intensity are small. Labor market structures, too, are often seen through the rural-urban prism. However, labor mobilization rates are almost identical in these two groups.
Unemployment is somewhat higher in urban areas than in rural areas. The real differences lie in the type of employment relationship for those in employment: in rural areas, self-employment (50 percent of rural employees) and casual workers (30 percent) dominate, while districts urban areas are dominated by regular workers. salaried employment (50 percent of urban employees).
It is tempting to consider the urban-rural divide as the key dimension in understanding the significant heterogeneity of economic outcomes across India. But that would be a mistake. While this divide clearly matters, there is great heterogeneity within urban and rural district groups. Both urban and rural districts are found in the three groups of districts defined by their prosperity (measured here by the average wage).
The most prosperous rural districts have agricultural activities that pay more than three times the national average agricultural wage. In their case, agriculture drives the local economy, driving up wages for local industry.
Urbanization in sstates
Maharashtra has an urban population percentage of 42% (4.1 crore), Gujarat with 37% (1.9 crore) and Tamil Nadu with 44% (2.7 crore) and the least urbanized state, Assam, with 13% in 2001. indicate this interregional variation. In 2021, Maharashtra (50.45%), Gujarat (44.45%), Tamil Nadu (42.54%), Karnataka (41.12%) and Andhra Pradesh (39.13%) will be the most urbanized states in that order.
The perils of urbanization
Over the years, cities have expanded and become burdened with the stresses and strains of unplanned urbanization, the brunt of which is borne by the poor and marginalized, biodiversity and the economy. In fact, Covid-19 has revealed the dire need for planning and management of our cities, with a focus on the health of citizens.
Problems such as lack of availability of serviced land, traffic congestion, strain on basic infrastructure, extreme air pollution, urban flooding, water scarcity and droughts are not simply a reflection of infrastructure gaps in cities. These problems point to a deep and substantial lack of adequate urban planning and governance frameworks.
As a result, the urban environment, especially in large cities, is deteriorating very rapidly. All Indian cities suffer from severe shortage of water supply, sewage, developed land, housing, transport and other facilities.
The level, quality and distribution of services have been very poor. Several studies have indicated that large segments of the urban population lack access to clean water, sanitation, basic health services and education. These deficiencies have serious health implications, particularly affecting the urban poor.
Deteriorating infrastructure, weak municipal institutions and poor distribution systems have limited the urban economy and its ability to generate jobs, income and services for the poor. The impact of urbanization can be viewed in the context of urban infrastructure services including water supply, sanitation and solid waste management, land and the urban environment.
In recent years, many efforts have been made by the Center and state governments in the urban sector. However, urban planning, which is the basis for the integrated development of cities, citizens and the environment, has not received sufficient attention. One such great example is the recent floods in Bangalore.
According to some experts and activists, people are only worried about the flooding of the city because it affects the productivity of the IT sector. Bangalore’s infrastructure cannot sustain the rate of development. Storm drains in the area are overloaded due to the combination of rainfall and sewage.
Another report mentions that the municipality has not bothered to connect the villages to the sewage infrastructure of Bengaluru. There are no culverts along this stretch of ORR, storm water and sewage are forced to accumulate causing waterlogging. The highway acts as a dam for water. In short, indiscriminate urbanization in the name of development harms people and their economy. India, which was very recently touted as the world’s fifth-largest economy, needs a controlled approach to its development that will strike a balance between urban and rural areas.