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Indian cities unprepared for growth
Fri, 23 Apr Pre-Open

Yes, the India growth story continues unabated. At a time when the developed world is really struggling. But within India, genuine growth is limited to urban pockets. We do get to read about the hinterland clocking double digit growth. But say that to the hordes of migrants who move to the large cities in search of work. In fact, most cities are finding it simply too difficult to cope with the pressure. For two reasons - the influx is are too large and most cities have never really prepared for it.

Sadly, the situation is set to get even worse in the future. It is estimated that 590 m Indians will live in cities by 2030, up from 340 m currently. In the next 20 years, about 68 Indian cities will have a population of more than 1 m, from 42 cities currently.

This calls for expansion of India's urban infrastructure. As per a recent study by McKinsey, Indian cities need US$ 1.2 trillion over the next 20 years to cope with the situation. Currently, India spends only US$ 17 per head in its cities to build infrastructure. Compare that to China which has a capital spend of US$ 116. As per the study, India will have to ramp up its spend to US$ 134 per head.

Two things are possible if Indian cities do not expand to take in the additional job seekers. The quality of life in cities will continue to get worse. Something that is already bad, many would say. The other possibility is that it could get so bad that job seekers eventually stop migrating. But that wouldn't solve the problem. Cities are likely to generate 70% of the new jobs. Those living in smaller centers will find it difficult to get employment. Rising unemployment is a recipe for disaster in a country with a young population.

The only other country which has seen urbanisation on this scale is China. And they have built large, dazzling cities in response. While we may talk about building world-class cities, the truth is that not enough is being done. Certainly, not with the seriousness with which the Chinese went about it. At some point we will also have to. If not, the state of our urban infrastructure could turn out to be India's biggest roadblock.

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Feb 19, 2018 (Close)