India – The Future of A Reluctant Urbanizer

India – The Future of A Reluctant Urbanizer

Anuj Puri, Chairman & Country Head, JLL India

India has always been labelled as a ‘reluctant urbanizer’. The percentage of the population living in urban areas in 2001 was estimated to be at 28%. Despite the explosive growth of cities like Mumbai, Delhi, Bangalore and Pune, the percentage of people moving to the urban centres did not cross 31% mark in 2011. Nevertheless, there is a rising anticipation across the nation that in the next decade or so, the rate of urbanization will rise massively in India.

Urbanization is an essential condition for economic growth of any nation. One of India’s biggest advantages is its potential demographic dividend – a rapidly growing population of young people in the working age bracket. This young population will gravitate unerringly to the country’s urban areas to fulfill their own dreams and potential as the country’s renewed economic growth creates more and more jobs in its cities.

This cannot happen quickly enough. By international standards, the pace of India’s urbanization has been lamentably slow. While in countries such as China, Indonesia, South Africa, Mexico and Brazil, urbanization figures have quadrupled over the last six decades, growth in India’s urban population had grown to a mere 31% in 2011 from the 17% reflected by the first post-independence census conducted in 1951.

Nevertheless, the number of people involved is extremely large. Studies tell us that from 1991 to 2011, India’s urban population rose to a whopping 377 million. In fact, India is poised on the brink of an unprecedented urban expansion boom – by 2031, the country’s urban population is estimated to increase by more than 200 million. Thereafter, it will take only half that time triple. To facilitate economic growth and global competitiveness, and also to meet increasing demand for urban areas, India will have to add many more cities within its boundaries.

If it manages to do so, and to do it efficiently, the benefits from urbanization are immense. Job generation and thriving new real estate markets are just the beginning. With every new city, India will unlock a new source of growth drivers such as education, healthcare, infrastructure, transportation and recreation.

However, in creating new cities, we cannot afford to repeat the mistakes of the past. Urbanization in India has so far been a process where inward migration of people is not matched with capacity-building. Increasing population merely places existing infrastructure under increasing stress.

Most of India’s city’s still fall markedly short on providing basic quality of living of the largest segments of their population. This is a result of chronic under-investment, and the end result is that these cities do not perform optimally on any front. When a city does not provide adequate comforts and conveniences, the resident population spends more time and effort in overcoming challenges than in being productive.

Intelligent, sustainable urbanization is the key for India’s future. Going forward, urban growth will need to happen within a solid framework of strong, stable governance, strategic capacity building and infrastructural enablement. Only then can Urban India hope to be future-ready in every respect.