Guest author: Jochen Mistelbacher  | Senior Fellow  | Observer Research Foundation, New Delhi

Even though India had started one of the globally biggest reform-linked urban development programmes back in 2005 (Jawaharlal Nehru National Urban Renewal Mission, JNNURM), it is fair to say that the urban sector, as a whole, has received a new impetus with the new government under Prime Minister Modi took office in 2014. Especially, the introduction of the project of “Building 100 Smart Cities” has refreshed the urban discourse, given the ambiguities of the concept’s definition and its envisioned shape, form, governance, inclusiveness, finance, and last but not least, applicability and usefulness in the Indian context. Added to this, with the allocation of more than seven billion Euro, in the next five years, the Indian government launched the “Atal Mission for Rejuvenation and Urban Transformation” (AMRUT) as a continuation of the JNNURM to facilitate the much-needed provision and upgrading of basic civic infrastructure and services in 500 large mission cities, and plans to tackle the huge issue of providing “Housing for All by 2022” by building around 20 million housing units in urban areas.

This change in focus is well-deserved and urgently needed, as India is in the midst of a huge urban transformation. The latest Census in 2011 yielded a total urban population of approximately 380 million, distributed over nearly 8,000 urban settlements of different sizes. Despite its sheer absolute numbers, the speed of urbanisation and the ratio of the urban to the total population at around 31 percent are still very low in global comparison. However, absolute growth of the urban sector of more than 90 million was slightly larger than its rural counterpart for the first time in India’s demographic history in the decade 2001-2011— a trend which is all set to continue. Recent estimates by the UN Population Division forecast that by 2050, half of India’s population will be a resident of an urban settlement. Thus, more than 400 million new urbanites will be added to India’s total urban population in the next three decades roughly through natural growth, rural-urban migration, spatial expansion of existing urban areas, conversion of rural into urban settlements, and greenfield development of new urban centres, e.g. smart cities, industrial nodes and newly planned state capitals. To sum it up, essentially most of urban India has not even been built as yet. Considering the current backlog in basic services, infrastructure and housing amenities, and future projections of urban growth, these demographic challenges seem daunting.

On the other hand, a well planned and managed urbanization process is essential for India’s overall growth and development trajectory, in a social, economic and environmental perspective. Without efficient, productive and well-functioning towns and cities all across the Subcontinent, India’s further growth and transformation will be difficult. Currently, India’s urbanization process is marked by two characteristic features. partly similar to other developing regions: Firstly, India’s urban structure is very top-heavy— more than 40 Percent of its urban population, more than 160 million people in absolute terms, reside in one of the 52 million cities as of 2011. Secondly, it is these million cities that on average still register the highest growth rates. This process of metropolitanisation is driven by public policies – India’s recent and current urban development programs are characterized by an inherent bias towards large cities, and more developed and urbanised states – and market-led private urbanization processes due to agglomeration economies. However, a marked shift has occurred recently: By now it is mostly the so-called tier-II metropolitan centres, e.g. Surat, Pune, or Jaipur and the high-tech centres of Bangalore and Hyderabad which show the highest growth dynamics. The ‘old’ megacities – Mumbai, Delhi, Kolkata and Chennai – are marked by significantly lower growth rates. However, these megacities are still substantial growth magnets, but with their center of growth shifting outward in a process of demographic, industrial and tertiary suburbanisation. Developments around Delhi in the so-called National Capital Region are a prime example of this development: The massive growth of Delhi’s ring towns – Gurugram, Faridabad, Ghaziabad, and NOIDA – exemplify this suburbanization process in housing, industrial and service-related activities, as a market-led reply to negative agglomeration externalities in Delhi itself, e.g. high land prices.

The success of India’s future growth and development will to a large extent depend upon the shape of its urban transformation. It is well-known that Indian cities, large or small, new or old, are hampered by massive infrastructural deficits, intra-urban inequalities and a divide by formally planned and informally developed areas. Will 100 new so-called smart cities make a difference? Looking at the whole universe of urban India, maybe not. However, these new developments and innovations can provide a lighthouse-character by giving an example of a technology-driven, sustainable urbanization approach. But, given the vastness of the subcontinent, its current unbalanced regional development and spatial economy, and projections of future urban growth, it will need more than 100 smart cities and project-based investments in large cities. Visions like “Make in India” and India’s overall socio-demographic transformation from a rural to an urban society, accompanied by a further economic shift from an agricultural to industrial-service-based society, require an approach to balanced regional development and well-managed, implemented and monitored urbanization process.

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