September 27, 2012
Acquisition, use and development of urban and peri-urban land has become a real issue for Indian governments at all levels, as they strive to maintain economic growth and investment viability.
Cities and Growth in India.
The process of economic liberation, which took place in India between 1990 and 1991, ultimately changed the economic, physical, social and political trajectory of the country, at an unprecedented rate.
Between 1990 and 2010, India’s economy grew rapidly at an estimated rate of 6% per annum. A significant amount of this economic growth has been concentrated in urban areas. Indeed, urbanisation has had a huge impact on both the economic and spatial geography of India, especially over the few decades.
There were only five Indian cities, in 1951, with a population greater than one million and only 41 cities with a population of over 100,000; much of India essentially lived in 560,000 villages. By 2011, however, the picture had drastically changed, with three cities registering populations in excess of 10 million and 53 cities with a population greater than 1 million. Over 833 million Indians live in 660,000 villages, but 377 million live in around 8,000 urban centres.
India in 2031
By 2031, it is projected that there will be six cities with a population of greater than 10 million in India.
Unbalanced Urban Development
Urbanisation is a curious phenomenon in India, owing to the vastness of the country. In 2011, for example, the Census indicates that the top 10 cities in India account for 8% of India’s population, produce 15% of its economic output, but only occupy 0.1% of the total land area.
The trend continues if we look at the bigger picture.
The 53 ‘1 million plus’ cities of India are estimated to account for 13% of the population, produce about one third of total economic output, but only occupy 0.2% of the land. Furthermore, the top 100 cities account for 16% of the population and produce 43% of India’s total output, yet only occupy 0.26% of the land.
What is causing India’s rapid urbanisation and where is it happening?
While economic liberalisation was the primary driver that kick-started the rapid process of urbanisation that has occurred in India over the last few decades, contrary to the experience of many developed countries, this urbanisation has not been fuelled by vast scale rural to urban migration.
Indeed, over the last thirty years, migration has only contributed to around a fifth of the population growth in urban areas, while natural urban population growth has contributed around 60% to population totals, and the rest has been equally split between new town formation because of reclassification and urban boundary expansion or sprawl. Although more recently, figures show that net migration’s share in urban growth is up from 21%, over the last decade, to around 24% from 2001 to 2011.
Research shows that between 2001 and 2011, the migration that is occurring has largely been concentrated around the demographically dominant states of northern India, where much of the growing investment, economic activity, wealth and jobs are also concentrated in urban centres.
Uttar Pradesh is the most popular inter-state migration destination, followed by Delhi, West Bengal, Tamil Nadu and Rajasthan. Delhi, unsurprisingly, is the most popular destination for net rural to urban migration, as well as urban to urban migration.
Problems caused by urbanisation: India’s infrastructure deficit
One of the biggest impacts of rapid urbanisation in many countries is often the inability of cities to meet the infrastructure demands of its rapidly growing resident population.
And India is no exception to the rule.
Much of India’s urban infrastructure is in extremely poor condition, especially in non-metropolitan cities. No Indian city has running water twenty four hours per day, seven days per week, with the average duration ranging from one to six hours. In addition, most cities lack a fully integrated urban waste management system and a 2010 report highlighted that over 30% of urban households’ only access to a latrine was through shared or community toilets. Furthermore, almost 94% of India’s cities do not have a partial sewerage network, less than 20% of the road is covered by storm water drains, and only 13.5% of waste water is treated.
A lack of proper infrastructure is a very real problem in India’s cities, and it is a problem which will only increase in severity as urbanisation continues, unless the requisite investments are made.
Policy and Investment in India’s Cities
In 2005, the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) was inaugurated. The JnNURM consists of four sub missions: Urban Infrastructure and Governance (UIG) and Basic Services for the Urban Poor (BSUP) for 65 Mission Cities, and the Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) and the Integrated Housing and Slum Development Programme (IHSDP) for 640 towns and cities.
Funding for these schemes is centrally assisted, with the 65 Mission Cities under UIG and BSUP given 75% of the central government funding available, and the other 25% provided to the 640 towns under the UIDSSMT and IHSDP.
While central government’s commitment to investing in infrastructure is a step in the right direction, the High Powered Expert Committee (HPEC) estimated that for the period 2012-2031 there is a requirement for an investment in urban infrastructure services thirty five times greater than the investment made under the JnNURM (2006-2011).
Urban land reform
The need for urban land reform in India is more the exacerbation of an inherent problem, rather than the creation of a new one. A vast majority of the laws and regulations that govern the sale, transfer, use, development and management of land in India date back to colonial rule and have only been slightly been updated since independence.
The problem of outdated regulations, therefore, has taken on greater significance in the light of the liberalisation that has taken place in the real estate sector. As the real estate sector has opened up, outdated and complex land regulations have contrived to create a stark barrier to entry for international investors especially.
The underdeveloped nature of India’s land markets, and the lack of clarity with regards to regulation, is resulting in multiple interest groups making conflicting claims to scarce land, creating much conflict and contestation. These interest groups include both state and non-state actors.
As urbanisation continues apace, the issue of the acquisition, use and development of urban and peri-urban land has become a very real issue for governments at all levels, one they must solve if India is to maintain its economic growth and investment viability.
While the central government has responded with the proposition of a revised “Land Acquisition, Rehabilitation and Resettlement” (LARR) Bill, which attempts to address various inadequacies in the current procedure for land acquisition and resettlement, it remains to be seen whether these inherent problems can be overcome.
The Bill marks the beginning of an evolution regarding urban land reform in India, but the reality may be that the country is in need of a revolution; something that is far easier said than done.
India’s urban future and problems
Rapid urban population growth in India, as well as economic growth spurred by liberalisation reforms and a rapid influx of domestic and international investment, have created a number of very real challenges for the country, including a demand for improved infrastructure, better governance, and a growing need for land and real estate development.
India’s cities are sprawling.
While the growth of new, dense settlements can bring positive benefits, such as more easily facilitating sustainable living, sprawl, on a large scale, creates a whole new set of challenges in the fields of urban governance, regional planning and sustainability.
Over the next several decades, India’s urbanisation destiny could be decided by 1) the distribution both of urban and rural population across settlement size class as the country moves from rural-agrarian to an industrial-urban/service led economy, and 2) the grey area between Class IV and Class VI towns (<5,000 – 20,000 population) and the large fraction of rural populations who live in villages that have more than 5,000 people and have an increasing urban character; a zone which contains between 80 and 140 million people.
A shift towards describing the above areas as urban would mean a rise in India’s level of urbanisation to over 40%, but a loss of rural entitlements and an increased urban taxation burden, both of which have major policy implications at all levels of government.
There is much uncertainty regarding what the future holds for India’s cities and how urbanisation will evolve. What is certain, however, is that central government must intervene in a number of key policy areas if the benefits of urbanisation are to be gleaned.