Atanu Dey On India's Development

The Urbanization Leap

Economic growth is an imperative if the widely discussed goal of development has to be achieved by India. There are a number of well-known causative factors that lead to economic growth. Among them are an educated and healthy population, reliable and adequate infrastructure, a free and fair market-driven economy, and the availability of public goods such as law and order, political freedom, efficient governance, etc. These causative factors have complex interdependencies and have to be present–simultaneous in time and co-located in space—for economic growth, and consequently, development. Even after a fairly superficial analysis it becomes apparent that these factors of economic growth can be most efficiently provided in – and are usually associated with – cities.

Let’s take a few of these factors and see how they relate to cities. Educated people find the opportunities to use their skills in cities because they need the supporting infrastructure and other skilled people to fully utilize their specialized skills. Cities aggregate a large number of people with different skills which make all of them mutually dependent for being productive. Furthermore, the education of the next generation itself is most efficiently provided in cities. Thus cities are the centers not just for the use of education but the provision of education also. Try educating to a high level the children of small villages within the villages and it would soon become clear that it is prohibitively expensive. It has never happened because it cannot be done. Every center of excellent learning – schools, colleges, universities – is associated with urban areas, either from the beginning or from the urbanization of the place where a great center of learning is created.

Why is that so? Because of scale economies, as economists say. Given a large enough population at a specific location, the demand for education will be sufficient for its efficient supply. And to supply the large amount of educational services, you need a large number of people. These people in turn need non-educational services and they are also provided by other people in that location. To provide these services you need infrastructure—power, telecommunications, houses, parks, roads, water, sanitation, etc. To provide all the infrastructural services, you need yet more specialized people. Following this line of reasoning you soon reach the conclusion that it needs a city. It needs a city because a city is at the heart of a developed modern complex highly skilled highly specialized economy. See any developed and rich economy, and you will see that it is primarily a collection of cities.

You can of course have an economy based on a large collection of villages. For most of recorded history, economies have been just that, village-based, agrarian, and poor. They were not modern, efficient, or rich. Of course, you don’t have to be modern, efficient, and rich. You can choose to be traditional, inefficient, and poor. A Gandhian economy, in other words. An economy which is centered on “self-sufficient” villages is quite feasible. The best part is that one has the choice to live in self-sufficient villages. Very few people choose to do so, however. That suggests that there are very few true Gandhians among the general population. Somehow people appear to prefer the material comforts and opportunities of city living over the smug satisfaction of living a life of poverty and moral superiority in small villages. At the first opportunity, people from villages migrate to cities, and they prefer to do this even though they often end up living in slums within cities. They reveal their preferences by voting with their feet.

It is important to ask and answer the question why people prefer cities. Here is my tentative answer. It has to do with freedom. People somehow have an innate desire for freedom. They want to have the freedom to be who they are and have the potential of becoming. Cities provide us with degrees of freedom that villages seldom do. Not just economic freedom in terms of earning a living most conducive to our abilities and aspirations, but more importantly social freedom. Of course volumes have been written about the dehumanizing anonymity of cities. But there has to be a good reason for why this so-called “dehumanized existence” of urban living is preferred by so many around the world and in all times since cities came into being. Perhaps it is the drive for freedom that impels the population to live in cities that provide them freedom.

I am sure that there are those who have a romantic attachment to village life. I am also fairly certain that anyone reading this who has romantic notions of living in a village actually lives in a city. The luxury of an imaginary idyllic village existence can only be afforded from the comfort of an armchair somewhere in an urban area.

With that brief (heh!) introduction, it is time to get on with what we have been discussing in previous two posts (“Inclusive Economic Growth” and “The Land of Endless Opportunities.”)

The argument so far: India needs economic growth for development to occur; for economic growth, urbanization of the majority of the population currently living in 600,000 small villages is a necessity; the current urban centers cannot accommodate the present urban population adequately, leave alone taking on any additional burden. Hence the proposition has forced itself on us: we need new urban centers to accommodate the hundreds of millions who must get out of villages for India’s economic growth.

So the next time I will delve into the simple matter of how we can actually create new cities in India. It will not be a blueprint for economic growth, but rather the outline of a strategic plan. I will argue that it is possible to engineer cities that can liberate the hundreds of millions held captive in the dismal little villages of India. Creating these cities would essentially leapfrog India from being largely a village-based poor economy to being a modern affluent economy, and thus allowing the hundreds of millions currently living in villages to bypass the intermediate state of migrating to the slums of ill-planned congested cities.

[Next in the series: Cities as Complex Adaptive Systems.]

  • Abhay Rajan


    I had a question relating to the statement that excellent centers of learning are associated with urban areas.

    Some old and well-known universities in the United States such as the University of Illinois and Penn State are located hundreds of miles away from the nearest urban center. Considering that these universities have been around for more than a century, how does one explain their establishment and longevity?


    Atanu’s response: Abhay, I wrote, “Every center of excellent learning – schools, colleges, universities – is associated with urban areas, either from the beginning or from the urbanization of the place where a great center of learning is created.”

    Either it is urban from before or becomes urbanized once the seed of an urban center is planted in the form of a center of learning. This has implications for India, as we will see in the next post.

  • Guru Gulab Khatri

    If you desire to pull off a mass urbanization efficiently thats been neglected heavily.

    I was laughing my ass of when i learned Harvard business review was sending a team to study what laloo did to improve the railway.
    They should have a Duh department.
    The economy is growing ~9%
    There is a significant spillover of that into railway revenues that makes it profitable (instead of previous borderline unprofitabl).

    But harvard business review are the same folks which had suzy wetlauffer sleeping around and writing articles praising nasser and welch
    I wonder if standards have improved or else who knows whose with laloo :-)

    Back to transportation, If india is to pull it off correctly this time it needs to deliver the problem for megalopolis scales upfront.
    Its almost a if you build it good things will come argument.

  • Sudipta Chatterjee

    What about the actual upliftment of the living conditions in the villages themselves? I agree with the point that we need newer urban centres to support the migration that keeps happening constantly from villages to these places, but we cannot (and I believe it will be suicidal to) eliminate villages from the economy. Yes, the conditions in villages are not all rosy as painted from armchair littrateurs, but we need to address the problems there as well instead of pushing them under the carpet. Will the building of these new urban centres (as you envisage) actually help the villages anyhow?

    Atanu’s response: Like I have been saying, upliftment of the villages is the wrong thing to do. Why? Because it cannot be done. India is not sufficiently rich that it can afford to “uplift” vilages. There are 600,000 of them to begin with. The scale of the typical village is so little that you have to have trillions of dollars worth of resources to make any appreciable difference to them. Resources cannot be efficiently used if you spread it so thinly. We have to do a bit of arithmetic. Besides, what if you do improve the villages. The people living in these villages will eventually — if and when they become educated and seek freedom from the confining life of a village — migrate to cities anyway. So all the investment in villages will anyway be a futile exercise. Is it not better, given that resources are limited, that one stops trying to improve villages and instead build efficient cities?

  • Steve Zavestoski

    Is it possible that some people are choosing to leave their villages not because of a belief that a better life lies in the urban centers, but because their rural livelihood is being undermined by the voracious economies of the cities?

    I firmly believe that many people in rural areas do not experience their lives as impoverished and inefficient.
    I suspect that data are obtainable to support this contention.

    Take, for example, Kerala, which is maligned by many for its failure to cash in on India’s recent growth. Having lived in Kerala, I believe that economic growth provides little or no allure for many. What is wrong with being content with “enough?” There’s nothing wrong with it, except that it is anathema to capitalism’s logic of constant growth.

    Atanu’s response: Steve, yes, indeed rural livelihood is limited compared to that in the city. That is one of the basic economic forces driving the migration to cities. India cannot continue to be an agrarian economy and also be a developed economy. What you call the “voracious economies” of the cities is what creates wealth. It is that wealth that lifts people from poverty. When too many people have no option other than to engage in subsistence agriculture, the result is poverty. The simple fact is that for agricultural incomes to go up, the total income from agriculture has to be distributed to a smaller percentage of the total population. So for instance, if instead of 60 percent of the labor being in agriculture, only 15 percent were in agriculture and produce the same output (that is, if agricultural labor productivity were to quadruple), then the average incomes of those in agriculture will quadruple. The released labor can go on to the non-agricultural sectors and that is only possible in urban settings.

    Farmer suicides is a symptom — not the problem — of too many people trying to eek out a living in an activity that should have much fewer people in it. It is time India got that message that there is a crisis of farming and that crisis arises from too many people having no other option than to be in agriculture.

    That many people living in villages are content with living there may or may not be true. But it is certainly true that many people would rather leave their villages if they had the opportunity to live and work outside the confines of a village.

    No, there is nothing wrong with being “content.” My thesis is that there are those who are not content and that they must have the opportunity to move out of their discontent. Your belief that “economic growth provides little or no allure for many” does not contradict the statement that “for many people economic growth is the only way out of their grinding poverty.”

    Growth for the sake of growth is definitely not desireable. But growth when development depends on it is a different matter. Yes, capitalism’s imperative can be narrow and growth oriented but if growth is necessary, then capitalism may be the only avenue for bringing about the growth. When we are all materially well off and have sufficient stuff to keep body and soul together, let’s get together and then ponder the deeper questions of the meaning of existence, “contentment”, and other such lofty ideals. Let’s first get the growling stomach out of our minds, before we bend our minds to higher ideals.

  • Jyoti Iyer

    Hi Atanu

    Very nice. When I was younger I would wonder why there weren’t more cities like Bombay to accomodate the growing migrant population. Bombay is a mega-ghetto because of the lack of more cities in India.

    Cities also offer a high level of organization in social capital – tremendous networking opportunites – that villages do not have. Social capital has a great impact on how a society operates and on educational opportunities. A society with a reasonable to high degree of social capital is able to understand and maintain the importance of education for its future generations.

  • Sudipta Chatterjee

    Atanu, I still disagree. Look at the long term effects: where will the food come from? What can prevent the farmer suicides? What will we be doing to stop the rampant corruption of social justice in the villages? Yes, I agree that with limited resources it will be impossible to make a significant impact all over: but we can focus on a few places in that case. We cannot and will never succeed in improving all of it… but we can make a big difference in a small area. More importantly, when we say that we want to help a village, according to me it is not the same as saying that we will provide funds for the infrastructure building completely; we should rather think about providing the foundation of the gradual build of the infrastructure.

    The basic point that I am trying to raise here is that we will need the villages for our own sustenance no matter what. It is a symbiotic relationship — one is equally dependent upon the other. Therefore, although urban centres need to be developed for the growth of the nation as a whole, the basic situation in the villages also needs to be improved — their condition is not at a point of neutrality between good and bad, the scales are rather tilted towards the bad. Even if we are able to draw up some scheme, there must be some benefit we need to envisage that will directly affect at least one village.

  • Chandra


    I am bit confused. Are you changing focus here? RISC is all about keeping villages as is while deal with getting amenities to them – at least that was my understanding.

    BTW, I agree with the general thrust of your post. I think there will always be small communities that can sustain themselves if connected to the rest of country, but most growth – by pull or push – will take the population to urban centers.

    And there is lot going on in China now regarding this – number of new cities being formed in past decade or so by CCP fiat or organically. In India, it’ll probably be organic – based good jobs, schools etc – and because or our babus are usually 10 years behind on planning for any change.

  • Akhondofswat

    “I will argue that it is possible to engineer cities that can liberate the hundreds of millions held captive in the dismal little villages of India. Creating these cities would essentially leapfrog India from being largely a village-based poor economy to being a modern affluent economy, and thus allowing the hundreds of millions currently living in villages to bypass the intermediate state of migrating to the slums of ill-planned congested cities.” Aren’t SEZs supposed to do this, leapfrogging over the congestion,the chaos and potholes of our ramshackle megaslums to create sleek shining new cities?

  • Arvind Ekbote

    “India needs economic growth for development to occur; for economic growth, urbanization of the majority of the population currently living in 600,000 small villages is a necessity;”

    Is it necessary to urbanize the population? Doesn’t this create a village less India? Creating these cities will again decrease the flora and hence add to the much debated Global warming. I think providing the basic amenities and the technology to improve the rural productivity will definitely improve the economic growth.

  • Guru Gulab Khatri

    What about the long term effect of keeping people tied up in unproductive use.
    2 people sitting on a tractor doesn’t make it more productive. Its an unemployment mask.

  • shiva


    A well penned swipe at HBS and HBR! I have always thought their cases are crappy (and think even less of the much vaunted ‘case method’ in B-Schools).


    Gandhi’s advocacy of a simpler rural (and even urban) lifestyle is offering a means to an end – that of helping people to take control over their lives, be economically independent, and live in peace with one another. A “Gandhian lifestyle” is not merely about simplicity – that’s a caricature.

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  • Anubhav

    Hey Atanu,

    What you are talking about seems childish.
    All right, so if you develop new cities aren’t you in fact urbanizing the so called villages, which is exactly what developing the villages one by one is all about.

    Then also you bring about the point about deviating from the agrarian base and going onto modern industrialized and infocom development. But man the problem is precisely that, such development is not possible for obvious reasons of lack of education and resources.

    So its quite a vicious circle. Frankly I don’t see any solution in the short term or the long term; in the very long term… 100 years, yes. Everything else is just glitter foil stuck on scum.

    Also given the state of affairs with lazy and unaware villagers who don’t even want to change their villages anyways. The reason for this is that they have been conditioned for centuries to live in the paradigm that they subsist in now. In no small span of time are they going to change. Even if our economic ministers and multinational company honchos jump in the Ganges for the sake of the ‘India, Superpower’ slogan.

    Dont propose easy solutions where there are none. There is pessimism, optimism and realism. I think the real should not be painted with colors of pessimism because it the real didn’t sound like optimism.

    Anubhav Joshi

  • Shishir Thadani

    Although I don’t agree with your model on every point, I do agree on some of the most substantive points that you make concerning the urban versus rural.

    Indians, perhaps, more than any other people have an incredibly naive idealism concerning life in the village. They are also far more moved by the problems of poverty in villages as opposed to the problems of poverty in the urban slums.

    But people convenienty forget how there are thousands of Indian villages with hardly a tree in sight – if it weren’t for the monsoons – many Indian villages would resemble a landscape more akin to the moon or mars.

    On the other hand, there are urban neighborhoods where thanks to a modest degree of environmental consciousness, there are trees that shade entire residential lanes and gardens with a diversity of trees, shrubs and flower-beds.

    Indian villages can be enormously cruel when it comes to mistreatment along caste or gender lines. They can indulge in all manner of superstitions and unscientific modes of thinking that no progressive intellectual could condone or defend.

    India’s urban residents could do a lot more to green their urban surroundings and improve the lot of the slum-dwellers than worry about how to keep them in their dying or overgrown villages.

    Very frankly, given the explosive growth in our rural population, and the fact that we are already more densely populated than either China and Japan, nothing can save the “imagined beauty of rural life”.

    With the increasing partitioning of scarce agricultural land – the outmigration of India’s rural population is an unstoppable phenomenon.

    The point is that urbanization is inevitable if we must develop – we can either let it happen in a most anarchic and destructive fashion where ugly concrete blocks are put up by corrupt government agencies or by fly-by-night private builders, or insist that urbanization occur in a planned fashion with provisions for a diversity of shrubs and trees and beautiful community gardens and architecture that is pleasing to the eye and confortable to live in.

    The way things are, those who can afford it – live in ugly urban developments that are misadvertized as “xyz greens” or “abc paradise” or “qwe gardens” – and those who are too poor simply end up in slums.

    And with a growing rural population, the village just becomes something most people must escape from.

    As you say – either we build 600 new cities that are as modern and environmentally advanced as possible – or we settle for the current destructive anarchy that is an inevitable consequence.

  • Raju

    I think, the center must mandate each state to build a new City from scratch, which preferable near a river (but rocky non agriculture area) and close to cluster of backward areas. The state governments must relocate some non-essential offices to that area, to create initial employment. Allocate land for schools and other basic infrastructure. Compensate the landlords both by money or 25% developed plots (i.e. 2800sq.yards for roads and common areas, 1000 sq. yards for sale to raise funds for development and 1000sq yards for land owner).