Urban Governance in India: Part 1 – Urbanization Evolution in India


I have been researching about the Local Body governance in India for quite some time now, prior to the last Diwali would be an adequate timeline. I have put out the first cut of my findings, however, the stage was not right and there was need for more clean up in the database and the information.

Having said that, I believe, the stage is right now. Before coming to the point, I would reiterate to the readers that our country is a “Development Paradise”. Yes, finally if the word catches up, I can credit it to myself.

Why is it a Development Paradise?

Because you pick up anything, there is huge scope for improvement, in fact, every step the task of each government is cut out, at three levels, center, state and local governance. Our country practices Co-operative Federalism, where the three sources of Power i.e. Center, State and Local, work in tandem, feeding each other. Hence, we have three layers of elections. I am clubbing local bodies to mean both Urban Local Bodies and Rural Local Bodies.

Coming to the ‘stage being set’ part, it originate from recent resounding victories of BJP in the local body elections in in Odisha and Maharashtra (and an impressive show in BMC). These elections and these local bodies are extremely crucial as the Local Bodies have reached a peak stretching point, in terms of service delivery. In fact, I have been going through the Economic Survey report published by the Government, and this year with CEA Arvind Subramaniam, sees a whole chapter dedicated to the Urban Problem. With this background of BJP election win, the growing rhetoric of urbanization and the Economic Survey report, I believe the stage is right for mainstream debate on the Local Body functioning and governance.

What is it that the series wishes to cover?

⦁ the evolution of the governance of Local Bodies in India,
⦁ why development initiatives are critical for these local bodies?
⦁ what have been the key aspects which have been till date ignored by the ruling parties of both state and center?
⦁ Need for self-sustainable development initiatives
⦁ Reducing central and state burden
⦁ Our innovative ideas that are aimed at creating growth initiatives

Under this multi-part series we look to cover the following topics:


State of Urbanization

As per Census 2011, India has an urban population of 377 mn or 31.16% of the total population. The number of Urban Local Bodies increase from 3799 in 2001 to 4041 in 2011, and the number of census towns increased from 5161 in 2001 to 7935 in 2011. By 2026, the urban population is expected to increase from 534 mn by 2026, while McKinsey Institute expects this population to hit 590 mn by 2030. At 590 mn, India’s 40% of population shall be residing in cities. The Twelfth Five Year plan estimates by 2031 India’s urban population would be ~600 mn. Moreover, United Nations projects that urban population would cross 583 mn and 814 mn by 2030 and 2050; or 40% and 50% respectively.

India’s Urban Population – Present & Projected

Figures in crores

Source: Municipal Finances and Service Delivery in India report dated 2014, page No. 2.

What are municipalities or urban local bodies?

The Census of India classifies places:

⦁ With minimum population of 5000
⦁ 75% of male population is engaged in non-agricultural pursuits
⦁ Population density of 400 persons per sq. km.
These urban areas are further classified as Statutory or Census Towns

Classification of Urban Areas, 2011


The Urban Population ShareThe Urban Population Share from 2001 to 2011A more granular look at the Urban Population Evolution over 100 years:

Source: http://urbanisation.econ.ox.ac.uk/materials/papers/24/urbanisationindia.pdf
Note: L denotes Lakhs, while K denotes thousands

The above three table show a evolution of the Urban Population in India. If we look at the table 3 we observe following key narratives:

⦁ There are five 5 cities as of 2001, with a population more than 40L, which were not there until 2001.
⦁ There is sharp increase in number of Cities with population in the range of 1L to 10 L, in fact, if you look at the last row, you will see that the share percentage point has increased by 9.95 points along with a number of cities increasing by 386. In fact, these cities, in 2001, account for the maximum share of total urban population at 35.07%.
⦁ The cities with population of 10L to 40 L stood at 26, who deserve fresh attention. These cities are non-metros that are the next metro cities. Or, as the Economic Survey uses the word ‘Dynamo’, I would say they are the next ‘dynamos of growth’

We as urban readers are quiet unaware of the problems we face every day, starting from water to waste to traffic to poor transportation system, that plagues cities and lesser size cities.

Quite frankly, the list is endless. The problem is intense, and frankly, to quantify the problem, the cost of solving the problem is very high. Here are few estimates of the infrastructure costs to be made to ensure Indian cities achieve an accepted ‘service delivery parameters are:

Assuming the HPEC number for infrastructure, we estimate that as on 2015-16 shall be INR 52.9 L cr. This is expected value of expenditure until 2031; or say INR 3.5 L cr average over a period of say 15 years. This amount is difficult to be financed purely from internal accruals or merely from the Budgets.