Small cities and India’s future

By Anand Sahasranaman, IFMR Finance Foundation

It is a well-worn cliché to call cities the engines of national growth. Like many clichés, however, it contains a kernel of truth. The import of this cliché is particularly resonant in the crossroads that India finds itself in now.

It has been estimated that India will have an urban population touching 600 million in 2030, up from 340 million in 2008 – almost a doubling of the urban population in little more than two decades. This statistic alone must give us pause to think about the state of our cities today and their ability to absorb the coming population deluge.

Urbanisation has rightly been recognised as being among the most important issues facing India today. As a result of this realisation, there has been increased policy interest and attention being focused on the issues impacting urban India. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is the flagship Govt. of India program aimed at improving the provision of urban infrastructure. This increased attention to urban India is however skewed towards the large metropolitan cities. These cities are the engines of economic growth today, but are plagued by severe challenges to their civic infrastructure as their populations have exploded. They are beset with a range of institutional, operational and financial problems and city managers have been left struggling to cope with the ever-increasing demands for infrastructure and services.

We believe that in order to have sustainable urbanisation in India, the focus of urban development must be on small and medium cities. This is driven by two primary imperatives – growth and equity. Current patterns of migration – from rural areas to the larger cities – are unsustainable because metropolitan centres are already buckling under the weight of their current populations. Additionally, economic growth in the country has been geographically skewed towards the large cities and the southern states, and so there is need for more balanced, equitable regional growth.

Therefore, in order to sustain the growth momentum and deepen the process of inclusive growth, it is imperative that small and medium cities become the crux around which the strategy for urbanisation in India revolves.