Urbanization in India

Asit K. Biswas

SANCHAR EXPRESS | December 5, 2014 

In terms of global developments, Asian countries, including India, have been comparatively newcomers to urbanization. Western countries, as well as Latin American countries, have witnessed more urbanization much earlier than Asia.

In 1901, only about 10.8% of the Indian population lived in urban areas. By 1991, urbanization had increased to 26%, and by 2011 to 31%.

In contrast to India, China had urbanized earlier. In 1991, nearly 1 in 3 Chinese lived in urban areas. By 2011, it was 1 in 2.However, what India had missed in the past, it is now catching up with a vengeance. During the past decade, some 2,800 new towns were formed. Towns, in an Indian context, are defined as having municipal administration of some sort, or having population of more than 5,000 people where the primary occupation of adult males is not farming and has a minimum population density of 400 people / km2. Definition of what is an urban area often varies from one country to another.

All over the developing world, urbanization has been a major trend for decades. It is expected to continue to 2050, albeit at different rates in different countries, and also over time. For example, between 2011 to 2030, global urban population is estimated to increase by 1.4 billion, of which 276 million will be in China and 218 million in India. Together, they will contribute to 37% of the new urban population.

The situation between 2030 to 2050 is likely to be somewhat different, when the world’s urban residents are expected to increase by 1.3 billion (199 million less than over 2011-2030). The maximum increase will be in India at 270 million, followed by Nigeria at 121 million. Together, these two countries will add 31% of the new urban residents. China, in contrast, will add “only” 44 million.

Even within India, by 2030, urbanization rates are expected to vary widely by states. Thus, Tamil Nadu is expected to be the most urbanized state at 67%. More than half of the people in four other states will be living in urban areas: Gujarat (66%), Maharashtra (58%), Karnataka (57%) and Punjab (52%). In contrast, even by 2030, four states are likely to remain predominantly rural: Bihar with an urban population of 17%, Himachal Pradesh (20%), Orissa (24%) and Uttar Pradesh (26%).

Viewed globally, India’s urbanization process will be both rapid and very significant. By 2030, nearly 70 Indian cities will have a population of more than one million, and five cities (Mumbai, Delhi, Kolkata, Chennai, Bangalore and Pune) will have population of more than 10 million. Mumbai and Delhi will become two of the five largest cities of the world.

Urbanization brings many challenges. Historically the process has been poorly managed in India, especially when compared to China. However, if the country’s policy-makers and bureaucrats wake up, make and implement correct policy decisions, India could be radically transformed, with majority of people having better standard of living and vastly improved quality of life. However, if the future brings only incremental improvements in policies, and their implementation continues to be poor, the lifestyles of the average urban dwellers will be tough.

Unfortunately investment in terms of capital expenditures to improve the quality of life of an urban Indian dweller has been abysmally low, when compared to other emerging economic powers like China, or cities of the industrialized world. According to the UN estimates, per capita investment in Indian urban areas per year in recent years has been around $17.00, which is 1/7th of the corresponding figure for China, or 1/17th that of New York.

In addition, corruption, inefficient resource allocation and poor execution have meant that the meagre amounts that have been spent did not result in the expected benefits. Per capita investments in urban areas have to be increased by 7 to 10 times in the future in order that urban quality of life in India could be significantly improved. Furthermore, it will be essential to ensure that amount invested is properly spent, with much reduced levels of corruption. This will not be an easy task, but doable.

Let us consider only three basic services in Indian urban areas: water supply, wastewater management and electricity availability.

Sadly, there is not even a single urban area anywhere in India where water is available which could be drunk straight from the tap without health risks, and where wastewater is collected, taken to a treatment plant, properly treated and discharged to the rivers and lakes without creating health and environmental hazards. Quality of services and water supplied in many urban areas have actually declined in recent years, and not improved. Majority of the Indian cities routinely lose 40 to 60% of water supplied. The capital city of the country, Delhi, now discharges all its wastewater to Yamuna River without any treatment. The Third World Centre for Water Management estimates that less than 10% of wastewater generated in India is collected and then properly treated and discharged to the environment.

In December, the Supreme Court of India was informed by the Central Pollution Control Board that the officials of the Delhi Jal Board who are solely responsible for treating sewage had “zero” knowledge of the tasks entrusted to them. Earlier the Court was informed that Rs 5,000 crore had been spent to clean the river since 1994, and yet the river has remained an open sewer, with dissolved oxygen level of zero in many places. This shows that it is not the money that is important, but how efficiently it is used to achieve the objectives.

In terms of electricity, in 2005, the Government of India launched a plan for universal access in the country by 2012. Sadly, its implementation has been very poor. Even now nearly 1 in 3 Indian do not have access to electricity. Those that have, reliability of supply often leaves much to be desired. At present, per capita electricity consumption in the country is about only one-quarter of the world average, and only 35% of that of China and 28% of Brazil. India thus has much catching up to do.

Access to electricity is a result of economic development, but equally lack of access to electricity is probably the biggest barrier to economic growth in the country. In the urban sector, the greatest constraint to growth, investment and employment generation is the lack of reliable electricity availability. International Energy Agency estimates that an investment of $182 billion would be needed in the country to 2030 to provide universal access to electricity.

If such unacceptable levels of basic services continue, the urban areas will face a situation in about a decade which no other generation earlier had to face not only in the areas of water, electricity, housing or transportation, but also in terms of adverse health, economic, social and environmental impacts. Sadly, no Indian city has a practical and implementable master plan to 2030 for land use, housing, electricity, transportation, water, or solid wastes disposal. On the positive side, India has the management and technical expertise, technology, and investment funds to solve its current and future urban problems. When the politicians and the bureaucrats will wake up to the challenges of solving the plethora of future urban problems, including planning and designing new urban centres, is the most important question for which we have no answer at present.

Asit K. Biswas is the Distinguished Visiting Professor at the Lee Kuan Yew School of Public Policy, Singapore; founder of the Third World Centre for Water Management, Mexico, and member of the Global Agenda Council, World Economic Forum.