An Overview of India's Urbanization, Urban Economic Growth and Urban Equity

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An Overview of India's Urbanization, Urban Economic Growth and Urban Equity
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  Munich Personal RePEc Archive An overview of India’s Urbanization,Urban Economic Growth and UrbanEquity Sabyasachi Tripathi Institute for Social and Economic ChangeMarch 2013Online at  http://mpra.ub.uni-muenchen.de/45537/ MPRA Paper No. 45537, posted 26. March 2013 10:42 UTC  1 An overview of India’s Urbanization, Urban Economic Growth and Urban Equity  Sabyasachi Tripathi Ph.D. Scholar in Economics at Centre for Economics Studies and Policy Institute for Social and Economic Change Bangalore -560072, India Email: sabya.tripathi@gmail.com Abstract: The main objective of this paper is to analyze the recent past trends and patterns of urbanization, urban economic growth, and urban equity measured by urban poverty and inequality in India. In addition, it reviews the different urban development policies and programmes which are undertaken in different Plan Periods in India. The analysis shows that higher rate of urbanization is associated with higher economic growth, lower level of poverty and higher extent of inequality in urban India. Finally, the study suggests that Indian government needs to speed up the urbanization rate as it contributes higher share of national GDP by reducing urban poverty and inequality. Key Words: Urbanization, Economic Growth, Inequality, Poverty, Urban India JEL Classification: R11, R12, R58 Acknowledgement: This paper is the part of my Doctoral Dissertation. I would like to thank my Ph.D., thesis supervisor Prof. M.R.Narayana for his constant guidance, inspiration, valuable comments and suggestions.  2 1. Introduction One of the most recent phenomena observed in India is the formation of urban agglomerations, which is defined as geographic concentration of urban population and economic activities. This implies that urban agglomeration includes but not equal to urbanization. Urban India has been experiencing a steady increase in the share of its urban population, emergence of new cities or towns, sizeable contribution to the country’s national income, reduction of poverty, increasing inequality, and lower level of inclusive growth. Urban population expansion is due to natural growth of population (accounted 59.4 percent in 1991-01); emergence of new cities (accounted 6.2 percent in 1991-01); rural to urban migration (accounted 21 percent in 1991-01); and reclassification of rural areas as urban (accounted 13 percent in 1991-01) [Kundu, 2006]. The main focus of this paper is to describe the recent past trends and patterns of India’s urbanization from 1961 to 2011 and urban economic growth from 1970-71 to 2004-05. In addition, nature and extent of level of urban poverty and inequality have been described at all India level. Finally, a critical review of the urban policies and programmes are described as they are related to promotion of urban agglomeration, urban economic growth and urban equity in India. These descriptions are intended to provide an overview of India’s urbanization, urban economic growth and urban equity. We describe urbanization trends from Census period 1961 to 2011. Urban economic growth is described from 1971 to latest available years. To measure urban equity in terms of urban poverty and inequality, the year 2009-10 is specifically chosen for the availability of latest 66th Round of  National Sample Survey Organisation’s (NSSO)  Household Consumer Expenditure Survey in India for that year. The consideration of study periods is mainly based on following reasons: First, the availability of full information for the various urban indicators used in this paper. Second, as for the first time 1961 Census has adopted the uniform and rigid definition of urban areas. Third, to present the recent past scenarios of urbanization for the relevant policy implications. The rest of the paper is organized as follows. Section 2 and 3 present the trends and pattern of urbanization and economic growth in urban India over the different decades, respectively. Section 4 discusses about urban equity by measuring the poverty and inequality in urban India.  3 Section 5 critically reviews the major government policies for promotion of urban agglomeration, urban economic growth and urban equity in India in different Plan Periods. Section 6 summarizes the major conclusions of this paper. 2.   Trends and patterns of urbanization in India Urbanization is measured by two ways: First, level and growth of urban share of total  population and its distribution by size classes of cities and towns. This is called demographic approach. Second, changes in number and growth of urban centers and an expansion of geographical boundaries of existing urban areas. This is called geographical approach. 2.1   Demographic approach Table 1 shows that the annual exponential growth rate of urban population has increased from 3.23 percent during 1961-71 to 3.79 percent during 1971-81, but declined to 2.75 percent during 1991-2001. The decline in growth rate was slightly reversed back during 2001-2011. During the same period, the share of urban population in the total increased from 17.97 percent in 1961 to 31.16 percent in 2011. This indicates that an increasing trend of India’s urbanization over the decades. Table 1: Trends in India’s urbanization: 1961 -2011 Census Year Urban population (in million) Percentage urban Annual exponential growth rate (%) 1961 78.94 17.97 - 1971 209.11 19.91 3.23 1981 159.46 23.34 3.79 1991 217.18 25.72 3.09 2001 286.12 27.86 2.75 2011 377.10 31.16 2.76  Note: As the 1981 Census was not conducted in Assam, and the 1991 Census was not held in Jammu and  Kashmir, the population of India includes projected figures for these states in those periods. Source: Bhagat (2011). As per the World Urbanization Prospects: 2011 Revision, the percentage of total urban  population in India is 30.9 in 2010, which is lower than the developed countries like the United States of America (82.1 per cent) and Japan (90.5 percent) during the same year. It is also lower
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