March 11, 2016

Getting Urbanization Right for Better Jobs in India

Photo: © Ray Witlin / World Bank







IDFC Institute's Vaidehi Tandel and Komal Hiranandani  wrote about urbanisation in India for the World Bank's "Jobs and Development" blog. Excerpts below:


"Urbanization in India is set to take off in the coming years. At 31%, India’s official urbanization rate is far lower than that of other BRICS nations. However... (a)n ongoing study by IDFC Institute finds that if we classify all places with a population of more than 5000 as urban (a criteria used by countries such as Ghana and Qatar) India would be 47% urban as of 2011.


Therefore, a number of settlements regarded in India as villages are de facto urban, having high population densities and with the infrastructure and amenity requirements of small towns and cities. Many living in these areas are engaged in non-farm employment and have aspirations that are similar to those living in urban areas...


Changing the classification of such settlements from rural to urban is crucial so that policymakers are made aware of the true extent of urbanization and can design policies for developing urban areas. At present, state governments use considerable discretion in classifying areas as rural or urban and the criteria used vary across states.

One way to ensure that urban areas are not undercounted is to have a maximum population and density threshold beyond which settlements must necessarily be governed by urban local bodies. The Constitution allows for urban local bodies to include people with knowledge or experience in municipal administration and charges urban local bodies with functions such as land use planning. Courts tend to hold urban local bodies to a higher standard of service delivery than they do rural local bodies. Hence, areas governed as urban tend to have amenities of better quality and those residing in these areas have better access to education and skilling opportunities, healthcare, and sanitation, which translates to better human capital and employment productivity...


Agricultural employment in India’s rural areas has been declining. According to a 2014 working paper by Denis and Zérah, the number of people for whom farming was the main occupation declined from 103 million to 98 million between 2001 and 2011. In 2014, a survey of farmers conducted by CSDS found that 62% of those surveyed were willing to leave farming for a job in the city...


Therefore, if India has to absorb the large numbers of people leaving agriculture and having aspirations of a better life, it cannot afford to ignore its urban areas. By urban areas we mean not just large metropolises, but also the smaller cities, towns, and large villages, where much of the job-creating economic activities like manufacturing, small scale industries, and construction are taking place. Investments in infrastructure and amenities along with skill development would be vital for augmenting employment productivity in these areas."

Topic : Transitions / In : OP-EDS
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