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Accelerating urbanisation widens social divides

By Rahul Goswami

By 2030, McKinsey estimates that urban India will generate nearly 70% of our GDP. Urban concentration is therefore viewed as an opportunity for further economic growth and rise in per capita income. This mercantile view is what is driving the focus on infrastructure and services to the exclusion of food and nutrition security of these urban Indians and the increasing inequality both between rural and urban India and within an expanding urban India

It is the immense scale of demographic movement in the country that is responsible for the optimism about the growth rate of India's gross domestic product (GDP), an optimism that has persisted through most of the decade of 2000-10 and which has only (from late-2011 and particularly in 2012) begun to be tempered. Whether the figure cited was 7% per year or 8% per year, it is a recognition of the increase, from 2001, in the urban population of India that has provided the statistical foundation for the claim that an India growing economically would lead to an India less poor. The increase in urban population between the two censuses -- 2001 and 2011 -- was from 286.1 million to 377.1 million. There has been rapid addition to the already large group of towns in India, from 5,161 in 2001 to 7,935 in 2011 -- an astonishing rate.

Very significant economically is the increase in the number of urban agglomerations (see 'The rise of towns in India', Table 1). For the census, an urban agglomeration is a continuous urban spread comprising one or more towns and their adjoining outgrowths. These have increased in number from 384 in 2001 to 475 in 2011. The central government sees much good in this transformation and foregrounds the economic benefits of this change by employing a one-way lens. "It is well known," said the Approach Paper to the Twelfth Five-Year Plan, "that agglomeration and densification of economic activities (and habitations) in urban conglomerations stimulates economic efficiencies and provides more opportunities for earning livelihoods. Possibilities for entrepreneurship and employment increase when urban concentration takes place, in contrast to the dispersed and less diverse economic possibilities in rural areas."

According to Census of India 2011 as well as calculations by the Indian Institute for Human Settlements, the top 10 cities of India account for almost 8% of India's population, produce 15% of total economic output but occupy only approximately 0.1% of the total land area. Similarly, the 53 million-plus cities are estimated to account for 13% of the population, produce about a third of total economic output, and occupy approximately 0.2% of the land. The top 100 cities are estimated to account for 16% of the population, produce 43% of India's total output and occupy approximately 0.26% of the land.

These estimates are necessarily rough given the absence of reliable disaggregated data for urban areas, but the emerging economic importance of cities as well as their increasing demographic presence is clear.

Over the period 2010-20, urban India is expected to create 70% of all new jobs in India and these urban jobs will be twice as productive as equivalent jobs in the rural sector, according to 'India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth', a report by the McKinsey Global Institute in early-2010. This has projected that the population of India's cities will increase from 340 million in 2008 to 590 million by 2030 -- 40% of India's total population. "In short," stated the report, "we will witness over the next 20 years an urban transformation the scale and speed of which has not happened anywhere in the world except in China. Urbanisation will spread out across India, impacting almost every state. For the first time in India's history, the nation will have five large states (Tamil Nadu, Gujarat, Maharashtra, Karnataka, and Punjab) that will have more of their population living in cities than in villages." This is indeed the trend for these states (see Table 3) as it is also for Andhra Pradesh, West Bengal and Haryana.

The expectation is that as India's cities expand, India's economic profile will also change. In 1995, India's GDP was divided almost evenly between its urban and rural economies. In 2008, urban GDP accounted for 58% of overall GDP. By 2030, according to the McKinsey report's calculations, urban India will generate nearly 70% of India's GDP (see 'Bank deposits and population -- three sets of cities', Table 2). Such a transformation, if it comes to pass on the lines that global financial and consumer actors want, as India's major ministries (commerce, industry, finance, food processing, agriculture) and its planning agencies want, is expected to deliver a steep increase in India's per capita income between now and 2030 wherein the number of middle class households (earning between Rs 2 lakh and Rs 10 lakh a year) will increase from 32 million to 147 million. This transformation is at the heart of the infrastructure and services obsession which is reshaping the next version of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The McKinsey estimate is that to meet urban demand, India needs to build 350-400 km of metros and subways every year, and that between 19,000-25,000 km of road lanes would need to be built every year (including lanes for bus-based rapid transit systems), an ambition that denies altogether the impacts on land resources, on the destructive dominance of the automobile industry and proves the lie of India aspiring to a low carbon way of life.

There is another concern that has loomed above the residents of cities and towns since 2007-08, when the effects of the global food price increases were acutely felt. This is the food and agriculture concern, the feeding of the populations of 7,935 towns and 475 urban agglomerations which will, in the calculations of the food and agri-business industry, ensure that its growth rate will be better than that of the most optimistic GDP growth rate, and will be far above that of the agricultural sector growth rate (estimated at 3.5% to 4% for 2012-17). These projections depend heavily on the fulfillment of conditions required for the next phase of a Green Revolution as envisaged by the crop biotech industry, in which 'better seeds' and more sophisticated agronomy play key roles. The equation uses current crop production as being 100%, estimates that these methods must work on 5% less land (a not unreasonable estimate given urban expansion and rural land use change), estimates gains of 20% from "reduced losses", further gains of 50% from "better farm practices", and an additional big jump of 80% in gains thanks to the adoption of plant breeding and biotechnology, all of which, they promise, will raise production two-and-a-half times today's output.

Where will that increased output go, and where does it go even today? There is a group of inter-related concerns about local needs for food and nutrition. What these cost and for which categories of consumers, the ability of households to find and buy affordable food staples are matters that continue to be neglected because the coordination this demands is not yet recognised as an outcome, let alone a target. Although in the name of consultation and planning, the Government of India routinely discusses the need for 'convergence' between programmes run by ministries, there is scarcely any. The ministries of agriculture, rural development, women and child development and health do not come together to examine districts and blocks and tehsils, rather than each through their own lens, to agree on measures that benefit the households that bear the multiple burdens of high food prices, poor access to food, high burdens of communicable diseases, and suffer from low health and human development indices. In its note on 'Issues for the Approach to the Twelfth Plan' (2011 April), the Planning Commission said as much: "There is a perception that government programmes, especially centrally-sponsored schemes, are not sensitive enough to local needs. Also, government works in silos with little effort to achieve convergence and co-ordination across ministries and between Centre and states, even though most problems require inter-governmental and inter-ministerial coordination."

From a reading of the early results of the 66th round of the NSSO, 'Key Indicators of Household Consumer Expenditure in India, 2009-10', for the urban population, in all income deciles including those that comprise the urban poor, the situation is already grim. Bhiwani in Haryana (population: 197,662), Bhind in Madhya Pradesh (197,332), Amroha in Uttar Pradesh (197,135) and Hardoi also in Uttar Pradesh (197,046) are four urban centres whose populations are at the median of those towns in India whose inhabitants number over 100,000. The average number of children in each (in the 0-6-year age-group) is 23,890. Based on the recommended daily dietary allowance calculated for an Indian vegetarian diet by the National Institute of Nutrition, India, the minimum annual demand of each of these four urban centres is: cereals and millets, 43,124 tonnes; pulses, 9,122 tonnes; milk and milk products (kilolitres), 33,172; roots and tubers, 22,115 tonnes; green leafy vegetables, 11,057 tonnes; other vegetables, 22,115 tonnes; and fruits, 11,057 tonnes. Whether through the lens of municipal services provisioning or as a consumer project, urban administrations rarely plan for the food required by their citizens -- its sources, costs and alternatives that can help establish a nutrient cycle between urban consumption and rural producers.

Thus, encouraged by the global food and consumer retail industries, the financial and insurance industry, the infrastructure lobby and the automobile MNCs, supported by the recommendations of the multilateral lending agencies, India's central and state governments are to step up construction of the urban infrastructure needed to bridge the perceived gap between demand for services and their provision. In per-capita terms, India's annual capital spending of US$ 17 is seen as embarrassingly low compared with China's US$ 116. Such a nakedly mercantile view ignores entirely the increasing inequality both between rural and urban India and within an expanding urban India.

Detailed income distribution estimates for India were described in the study 'Human Development in India' (2010) and revealed quite high income inequality, with a Gini coefficient of 0.54 -- around the same as Brazil. Estimates based on village surveys derive even higher Gini coefficients: on average, 0.645 across households and 0.595 across persons even within villages (as recorded in 'Is India Really a Country of Low Income Inequality? Observations from Eight Villages', Review of Agrarian Studies 2011). This is reinforced now by the latest release of consumption data from the National Sample Survey Office (NSSO), the provisional results of household consumer expenditure survey of the NSS 68th round (July 2011 to June 2012). Some salient findings of the survey are: the average household monthly per capita expenditure (MPCE) in 2011-12 was estimated at Rs 1,281.45 in rural India and Rs 2,401.68 in urban India. Thus the per capita expenditure level of the urban population was, on average, about 87.4% higher than that of the rural population. The top 10% of the rural population, ranked by MPCE, had an average MPCE of Rs 3,459.77, about 6.9 times that of the bottom 10%. The top 10% of the urban population had an average MPCE of Rs 7,651.68, about 10.9 times that of the bottom 10%. And finally, in urban India, half of the population was living with an MPCE of below Rs 1,759; about 70% of the population had an MPCE of above Rs 1,295.

The rise of urban India has fuelled a limited economic growth in India during the last two decades -- and particularly over the 2001-11 period, as captured by the two censuses. They have accelerated fiercely the demand for energy and natural resources related to food, water and land. The current policy framework, heavily and myopically biased towards GDP growth, will not deal with the question of access to resources and fair use of land (even considering the tired clichés of inclusive growth and more equitable development). For city India as for rural Bharat, the social divides caused by accelerating urbanisation are only widening.

The rise of towns in India

There are 17 states which have more than 10,000 villages and these 17 contain more than 94% of India's 640,867 villages. They range, in terms of the number of villages in states, from 12,581 in Punjab to 29,340 in Karnataka to 106,704 in Uttar Pradesh. As was highlighted by the Census Bureau in 2011 with the release of the provisional population totals, for the first time since Independence, the absolute increase in population is more in urban areas than in rural areas -- rural-urban distribution of population is 68.84% to 31.16%; the level of urbanisation increased from 27.81% in the 2001 Census to 31.16% in 2011 census; and the proportion of rural population declined from 72.19% to 68.84%.

The question for rural India is, in these 17 states, how has the trend of urbanisation during the decade of 2001-2011 affected rural habitations -- have they grown into or become absorbed in urban and urbanising areas, have states experienced a net loss in number of villages?

In two states (Tamil Nadu and Gujarat) the number of villages in 2011 is 2% less than what it was in the 2001 Census. In seven states (Punjab, Chhattisgarh, Andhra Pradesh, Jharkhand, West Bengal, Madhya Pradesh and Uttar Pradesh) the number of villages is 1% less than the number of village habitations in 2001. In six states (Uttarakhand, Assam, Karnataka, Maharashtra, Bihar, Odisha) the number of villages is almost unchanged from the last census. In two states (Himachal Pradesh and Rajasthan), there are now more villages than there were 10 years ago.

However, it is in the number of towns (statutory towns and census towns) that the absolute growth and growth rate of the population of urbanising India becomes visible. For the 17 states, the median increase in the number of towns is 142%. During the decade between censuses, Odisha and Assam added towns at a rate of more than eight a year, Gujarat added more than 10 a year, Andhra Pradesh added more than 14 a year while Maharashtra added more than 15 a year, Uttar Pradesh added 21 a year, Tamil Nadu added 26 a year, Kerala added 36 a year and West Bengal added 53 towns a year! This helps explain why, over the 10 years until 2011, the tally of villages rose by 2,279 (on a base of 638,588 villages) while the tally of towns rose by 2,774 (on a base of 5,161).

Source data: Census of India 2011, Provisional Population Totals (India, Paper 2), Number of administrative units

(Rahul Goswami researches rural economies with a focus on agro-ecology. He is a consultant with the National Agricultural Innovation Project, Ministry of Agriculture, and is an examiner for UNESCO's Culture Sector, on intangible cultural heritage. He writes on issues concerning food and energy)

Infochange News & Features, August 2013