The Big Picture: Transforming Indian Cities

• 18 Dec 2018

According to Oxford Economics report, Indian cities will make up most of the fastest-growing cities in the world between 2019 and 2035, considering the year-on-year Gross Domestic Product growth. Over 17 of the 20 top cities on the list will be in India. The report said that Indian cities including Bengaluru, Hyderabad, and Chennai will be among the strongest performers across the globe. According to a Bloomberg report, India will dominate the top 10 cities in terms of economic growth over the span of 20 years. Surat, a commercial center for textiles in Gujarat, will witness the fastest GDP growth by an average exceeding 9%. While economic output in many of those Indian cities will remain rather small in comparison to the world’s biggest metropolises, aggregated gross domestic product of all Asian cities will exceed that of all North American and European urban centres combined in 2027.

DRISHTI INPUT

Oxford Economics Report Highlights

• Top 780 cities around the globe, currently are part of almost 60% of all world economic activity, and they will grow in importance as urbanisation continues. By 2035, these cities will be home to almost half a billion additional people with GDP rising by $32trillion (constant 2015 prices and exchange rates).
• The forecast is that there will be significant growth disparities between cities and therefore one can expect to see considerable changes in the world over this period. Many of today’s emerging market cities, particularly in Asia, will continue to progress along the development path and the balance of urban economic power will shift further east as a result.
• By 2035, Asian cities will account for almost half of global activity, overtaking the aggregate of European and North American cities in just over a decade. But it is still expected that most of today’s urban superpowers will retain their positions as the largest cities in terms of GDP in 2035, led by New York, Tokyo, London and Los Angeles.

Urbanisation in India

• Housing and employment are the most crucial needs for the migrating population. Presently, the cities are ill-equipped to tackle such influx due to lack of employment generation capability as well as housing capacity.
• The consequence of such deficiency is rampant proliferation of illegal housings and slums. Lack of job opportunity also leads to rise in crime rate. Hence, the need of the hour is to make cities capable to absorb the growing population.
• But, the critical fact is that India has not urbanized enough. India is one of the least urbanized countries in the world. Most of the developed and developing countries have more than 50% urbanisation and western European countries along with the US and Canada has 80% urbanisation.
• The 2011 census states that extent of urbanization in India is 32%. However, the experts believe that the percentage is much higher. In one estimate it is as high as over 40%. The reason for such under reporting is that many adjoining urban areas are still being considered as rural areas.
• The urban India is facing population burden. There is a huge influx of migrant workers into the cities. These cities are ill equipped to bear the burden of the unskilled workers. Rural urban migration is a point of concern, but intra city migration is also a rising phenomenon.
• The Top 10 Indian cities mentioned in the Report are situated either in the western belt or in the southern belt. Eastern cities do not even feature in the Top 10.

The Way Forward

• The recent survey has shown that the smaller cities and towns have grown faster than the big cities like Delhi and Mumbai. Hence, the focus must be put in to develop the tier-3 and tie-4 towns. Waste management system, schools, roads, proper sanitation infrastructure, water supply, power and most importantly, housing facility have to be developed so as to make small cities engines of growth.
• There is need to revisit urban planning system and the focus should be on to improve the quality of life by developing the social and the physical infrastructure.
• The local administration is the key to ensure the sustainable growth of the cities. The Smart City Mission in fact strengthens the governance system by empowering the local administration. The local municipal corporations should improve their respective credit scores and issue Municipal bonds to raise funds.
• In this regard government schemes like Housing for All and Deendayal Antyodaya Yojana (National Urban Livelihoods Mission) have been playing an important role.
• Deendayal Antyodaya Yojana (National Urban Livelihoods Mission) to reduce poverty and vulnerability of the urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities can help in tackling the issues related to urbanization.
• Housing for All – The Mission seeks to address the housing requirement of urban poor including slum dwellers through following programme:
  • Slum rehabilitation with the participation of private developers using land as a resource.
  • Promotion of Affordable Housing for weaker section through credit linked subsidy.
  • Affordable Housing in partnership with Public & Private sectors.
  • Subsidy for beneficiary-led individual house construction/enhancement.