2. Rural and Urban Areas
Rural
RBI definition: areas
with population
<49,000 and have
panchayat system
Rural areas contribute
to GDP through
agriculture, self
employment, etc.
Account for 33% of
FMCG sales
Urban
Place with
municipality,
cantonment board,
townships
Minimum population
of 5000 and
population density of
400/sq.m
At least 75%
population not
involved in agriculture
3. Urbanization is defined as a shift of human population from
farming to non-farming economic activities
Urbanization is closely linked to modernization,
industrialization and sociological process of rationalization
Delhi has the fastest growing urban population in the world
What is Urbanization?
0 2 4 6
Delhi
Mumbai
Kolkata
Bangalore
Rate of Urbanization
Percent growth
Source: Census of India 2011
4. Problems
Very high rate
Illegal land
grabbing
Slums
Low standard of
living
Solutions
Strong
administration
Cities with future
planning
Incorporate
informal economy
in urban
development
Spatial Planning
Urbanization
Implementation
Efficient public
transport
Develop areas
in the out skirts
of the city
Funding,
governance,
planning
Vertical
expansion
Challenges
Corruption
Weak
administration
High
population
Limited land
5. Industrial revolution
Expansion of govt. services after WWII
1991 economic reforms
11th five year plan: Urbanization
Growth of private sector
Causes of urbanization in India
6. India’s Urban Challenge
India’s fastest urbanizing states: Haryana, Karnataka,
Tamil Nadu
No urban decentralization in these states
Year 2030: urban share of GDP expected to be 75%
Congestion, pollution, vast proportions of
uninhabitable accommodation and impoverished
living standards characterize most fast-growing
Indian cities
8. 20 years after economic liberalization, devolution of
powers to panchayats, municipalities, city
corporations is highly neglected
Improve villages rather than expanding cities
Make the local bodies more accountable
Increase the quality of life in rural India
Decongest cities
Urban Decentralization: Foresaken
opportunity
9. Year 2030: Expected urban India population 590 million
Potential to unlock new growth markets in cities like
infrastructure, transportation, healthcare, education, and
recreation
To meet urban demand, 700-900 million square meters of
residential and commercial space needed a year
350 to 400 kms of metros and subways needed every year
Between 19,000 and 25,000 kilometers of road lanes
would need to be built every year
Road ahead
10. Cities can also deliver a higher quality of life
Urban scale benefits mean the cost of delivering basic
services is 30 to 40 percent cheaper in concentrated
population centers than in sparsely populated areas
Policy changes in India
In per capita terms, India's annual capital spending of $17 is
only 14 percent of China’s $116 and less than 6 percent of
New York's $292
India needs to invest $1.2 trillion just in capital expenditure
in its cities over the next 20 years, almost eight times the
level of spending today
Road ahead
11. Mckinsey report
Census India 2011
Mint (http://www.livemint.com/Home-
Page/DQwAhxYdc7BJn53pVs2OeP/Indias-urban-
challenge.html)
UN Habitat report
Reserve Bank of India
Bibliography
