The Emerging Face of Urban India
This is a summary of Dr. Sharma’s talk delivered at the Connect KARO organised by the WRI in Delhi on 11-12 September 2024.
How can countries maximize the economic benefits of trade, transport, and other facilities? By having a balanced arrangement of cities and villages. However, this balance did not emerge in India due to a mismatch between vertical and horizontal trade during colonial rule.
The British reoriented India's economic system by focusing on vertical trade. In the colonial enterprise, they invested in mines, plantations, and tea gardens, and prioritised moving goods to port cities. They also created systems for payments to flow back from the ports to the local areas, which defined the nature of vertical trade.
In contrast, horizontal trade involves buying provisions in rural markets for the urban middle class and selling industrial or city goods back to these rural areas. The British neglected horizontal trade development, and any horizontal trade that did emerge was merely a by-product of vertical trade. As a result, the Indian economic system that took shape featured dynamic vertical trade, but static horizontal trade.
Post-independence, this trade imbalance continued. The Government of India appointed the National Commission on Urbanization (NCU), chaired by Charles Correa and consisting of urban experts and administrators like M.N. Buch. The NCU found that the urban pattern imposed by the British had continued 40 years after Independence and there was: (1) excessive concentration of economic activities in the four metro centres had increased, and (2) slow growth of Tier I, II, III, IV and V cities.
Town planning failed to address this imbalance, and urban development became limited to enforcing building regulations and maintaining land uses, without any forward-looking vision to create a more balanced network of cities and villages.
This began to change in the 1990s, when the rise of information technology (IT) boosted both vertical and horizontal trade. As a result, a re-balancing process started within India's urban structure, leading to growth occurring on the urban landscape in the following areas:
Outgrowths around the Big 4 metros (Gurgaon, NOIDA, Navi Mumbai);
Bengaluru and Hyderabad achieved metro status (turning the Big 4 into the Big 6);
A significant rise in cities with populations exceeding a million;
A tenfold increase in small towns, with 2,774 census towns added between 2001 and 2011, compared to an increase of 2,500 census towns over the previous 50 years.
Similarly, post-COVID -19 trends have begun reshaping the urban landscape, with the effects of IT trickling down to Tier 2 cities. According to Siddharth Verma, head of Xpheno Executive Search, activities related to Global Capability Centres (GCC) are gradually shifting to Tier 2 cities such as Jaipur, Coimbatore, Kochi, Mangalore, Vizag, Indore, Chandigarh, Ahmedabad, Nagpur, Trichy, Thiruvananthapuram, Vadodara, Lucknow, and Mysore. These cities are likely to experience significant growth in both vertical and horizontal trade in the future.
We are now witnessing the restoration of a balance between vertical and horizontal trade in India. This shift has spurred explosive growth in mega-city regions, some Tier 2 cities, and small towns (both census and statutory). In the contemporary urban growth model investment hooks onto land parcels within cities, sparking growth in that piece of land in the surrounding areas. Urban planning has responded by changing land use rules and building codes after investments has locked onto areas in cities. However, this reactive approach often leads to land utilisation without adequate affordable housing, transport infrastructure, services, or consideration for environmental protection.
To address this, we need to move from this post-hoc planning approach to a more proactive one. Future planning should anticipate changes in land use, building regulations, and service requirements, ensuring they are in place before investments ignite development in cities and their surroundings, including emerging urban areas.
