To achieve its target of a $5 trn economy by 2025, india must overcome its gandhian fixation with a village-based society and invest in urban infra development.
Development and urbanisation are two sides of the same coin. No society in recent history remained agrarian while adequately providing for its population. Urbanisation aggregates human activity—aggregation leads to specialisation, specialisation to increased productivity; enabling greater availability of goods, delivery of services, increased wages, and job opportunities. Urban areas are engines of growth in any modern economy.
China is a shining example of how urbanisation drives economic growth. China rapidly urbanised from 26.4% in 1990 to 59.2% today. The impact is evident in China, where the quality of life and life expectancy have improved dramatically. We can also trace the feedforward effect in China’s specialised workforce and productivity improvements—making China a Top 2 economy with nominal GDP of $14.1 trillion. In contrast, India is at $2.7 trillion, moving towards the target of $5 trillion by 2025.
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The world, on average, is at 55.3% urbanisation, whereas India lags at 34% (see graphic). India has been slow to urbanise because of the fixation on being a village-based society. Most planners still look to Gandhiji’s sentiments on this topic—‘The future of India lies in its villages’, he said in 1947. This is no longer true—complexity has increased, people’s economic needs and aspirations have grown, and it is impossible to supply adequate resources to India’s six lakh villages. Keeping India’s population in villages while being unable to meet their economic needs has resulted in high inequity.
Source: Financial Express
