DEMOGRAPHY is not just about numbers, or quick stroke figures; it also gives us insights into how a country is faring on a wider canvass. When studying India’s population statistics one cannot help but be surprised by certain facts. The first is that the fastest growing towns are not the metropolises of Delhi, Mumbai, Chennai or Kolkata. Much of the action in recent years is taking place in smaller urban areas. Class I towns, that have a population in excess of 100,000, and cities with over a million people, are showing higher population increases. The speed at which they are expanding is way faster than the old mega-cities of India.

The second startling fact is that contrary to the popular impression one gets in big cities, the all-India rate of urbanization is actually decreasing since the 1980s. There is a definite slowing down in the tempo of urbanization in general, though certain towns and cities continue to expand quite rapidly. Between 1961 and 1971, urbanization grew at 3.24%, but is declining ever since. The latest census of 2011 puts the number down at 1.6%.

In the Greater Mumbai Urban Agglomeration (UA), the 2001 Census recorded a population increase of 30.47%, but it is down now to 12.05% in 2011. Likewise, growth in Delhi UA has slowed from 52.4% to 26.69% (the lowest since 1931), while that of Kolkata UA has decreased from 19.6% to 6.87% in the same period. But, interestingly enough, the number of census towns has increased from 5161 in 2001 to 7935 in 2011. Likewise the number of Class I cities (with over one lakh population) has gone up from 394 to 468, and million plus cities have increased from 35 to 53 in the same inter-census period.

All of this should be read in conjunction with the way rural India itself is transforming and becoming proto-urban. One should not be deceived by the fact that villages, for the most part, look like they always did. Yet a little attention to detail immediately reveals that something very important has happened in the past few decades. Agriculture is no longer the mainstay of the economy of the countryside. Even places where it is strong, the urge in most villagers is to leave farming behind and seek work elsewhere. To a large extent, this explains the very impressive presence of Household Industrial units in villages and the growing dependence on non-agrarian incomes. According to the 2001 Census, 986,629 census houses are used as factories and workshops in urban areas but as many as 1,224,283 such sites exist in rural India.¹ Thus, in economic terms at least, the village is not exactly textbook fashion rural any more. We are not sure what the 2011 Census figures will eventually reveal, but it would be interesting to follow this trend.

 

So where is urban India heading? The Provisional 2011 Census data tells us a lot about urbanization. Besides the rate of urbanization we should also pay attention to the further fact that 70% of urban Indians live in towns with a population of 100,000 and above. The share of urban population in the million plus cities stood at 68.7% in 2001 but by 2011 this came down to 42.6% – a decline of roughly 26%. This gives us a further indication of where urban growth is taking place, and consistently so.

Delhi, just as many may have feared, is the most densely populated city in India. Those in the capital suffer from the worst case of cramped space in the country, but it is not as if other cities are that much better off. The census also confirms a long held and rather unsettling truth about India. Urbanization has not led to an urban, metropolitan value system. The past lingers in India’s present and this is starkly reflected in urban India’s very disproportionate sex ratio. Shamefully, the 2011 Census tell us that the gender imbalance is very pronounced in India’s capital as well: there are only 868 females to every 1,000 males.

The other stubborn truth is that the rural population is still very high and has probably increased by a slight margin since the last census. The most recent figures show that 72.2% of the population continue to live in India’s 641,000 villages.² Thus, while the ambition to be urban beats in many rural breasts, the numbers tell us something different. Why are there still so many villagers in India?

Is it possible at all that people move back and forth with great rapidity, from country to town and back? But that cannot be very significant as the movement from urban to rural is very slight. The 2001 Census records that only 8.6% of male intrastate migrants and an even lower, 6.1% of interstate male migrants move from cities to villages. The other possible explanation is the one we have already alluded to, viz., the rural location of Household Industries. This probably gives us a clue as to why male migrants from village to village, both intrastate and interstate, is so high, at 41.6% and 20.7% respectively.³ In other words, a migrant’s destination need not always be a city, even though that is preponderantly the case.

 

Let us see how the countryside has changed and contributed to the movement away from agriculture. This is probably the first step towards a more generalized urban trend, but is not always recognized as such. If the rural Net Domestic Product is as high as 45.5%, then nearly half the village economy is not agricultural any more.⁴ This is another reason why there are so many workshops and Household Industries all over rural India.

Today these enterprises employ a large number of workers and the figure is steadily growing. This can be assessed from the fact that in the past 25 years, the proportion of units employing less than 10 workers has risen by over 110%.⁵ In other words, people are staying in the village but not necessarily working on land, at least not for a lot of their time. This rise in commerce in rural India is a symptom of how urban areas in the vicinity of the village are also changing. This is why small towns, and not large ones, are showing a lot of dynamism.

 

Some metros may have slowed down, but this does not mean that industrial activity has fallen in urban India as a whole. Pune, Lucknow, Pondicherry and Jaipur are getting bigger, even though Mumbai and Delhi may show a declining population trend. This is why there has been an increase in the number of Class I towns from 24 in 1901 to 393 in 2001 to 468 in 2011. While rural population growth between 2001 and 2011 has been 12.18%, the urban population growth is 31.8%. In terms of numbers, rural India grew by 90.47 million, while urban areas recorded a clear 91 million increase. Put all this together and we get a handle on why non-metro cities are growing so fast. Tiruppur, in Tamil Nadu, alone accounts for 23% of India’s export in garments.⁶

Thus while Delhi may be growing faster than Mumbai, it is the towns around it that are showing a much higher rate of population increase. The National Capital Region comprising Ghaziabad, Faridabad, Gurgaon and NOIDA are experiencing much higher population growth than what Delhi by itself is. If Delhi’s numbers have grown at the rate of about 26%, it is nearly 110% in Noida and 144% in Ghaziabad.⁷

 

Small town wonders are not a recent trend but it is getting more and more noticeable over time. In Agra, for example, there are at least 7200 SSI, and counting, that produce leather garments, textiles, zari work, handicrafts and marble stone for construction. Bhiwani, another small town, is also busy producing all kinds of products for export and even has technical institutions for those who want to specialize in textile production. There are 2250 SSI units in this town, with names such as Chinar and S.K. Foils prominent among them. Such enterprises also attract graduates from rural area who tend to prefer non-metro settings.⁸ Let us also not forget that about 20% of India’s billionaires come from small towns.

Take a look at cities that have barely touched a million mark, like Ludhiana, Varanasi, Bhopal and Kochi and one will find they are not behaving like kid brothers any more. While, in general, metros lead in the number of new managerial jobs created, Pune, Lucknow, Puducherry, Ranchi and Mangalore are not lagging behind by much. This also explains why Surat, Patna, Pune, Jaipur and Indore have growth rates exceeding that of Kolkata, or even Mumbai. According to the 2001 Census, Pune’s urban population grew at 50.08%. Though the 2011 figures show that this number has since decreased to 30.34%, it is still very impressive. Surat, in fact, shows a higher growth rate than Pune. In the 2011 Census, the figure stands at 42.19%. Noida, as we have already seen, has an unbelievable urban growth rate of 108.21% in the years 2001-2011.

 

Let us now look at Household Industries linking country and town. It is interesting that in some of the poorer states more men than women are employed in Household (HH) Industries. This may not be a uniform correlation, but in poorer states, more men than women tend to be employed in HH industries. In Uttar Pradesh (UP) there are six times more men than women in these sectors, while in Rajasthan, unbelievably, it is ten times higher. In Kerala, on the other hand the proportion is roughly the same and in Karnataka and Maharashtra men outnumber women in Household Industries, but only in the proportion of 2:1.⁹

A state’s backwardness could also be judged from the preponderance of rural workshops. In Karnataka, Haryana, Punjab and Maharashtra most of these units are located in urban areas. But when we come to Orissa, UP, Assam and Bihar, these little enterprises are more numerous in villages than in towns. In West Bengal the proportion is roughly the same.¹⁰ This tells us of the linkage that Household Industries provide in bringing together town and country.

 

Also, the number of Small Scale Industries (SSI), the registered ones at least, seem to be growing much faster in poorer states like West Bengal, Bihar, Uttar Pradesh and Orissa than in more prosperous states like Maharashtra, Gujarat and Punjab. This indicates once again that small-scale, informal industries are thriving in less prosperous regions. This is probably on account of both cheap labour and cheap real estate. What is clear is that the demand for highly qualified labour personnel is nowhere that strong.

Ghari Detergents is a very popular brand, but how many metro consumers have even heard of it? Yet, from a factory a few miles away from Kanpur, it caters to a huge market with a turnover higher than all the Godrej FMCG products (including Cinthol) put together. Only Hindustan Lever does better than Ghari in terms of revenue. Coming second to a front runner like that is almost as good as winning the gold. Similarly, Sanjay Ghodawat runs a Rs 1,000 crore conglomerate in Manakpur. Positioning this nondescript place may want you to reach for the map. It doesn’t help to know that it is a hundred miles or so from Kolhapur, another small town. Besides selling Quality Gutka, Ghodawat’s company manufactures wind energy turbines, mosquito coils and oxalic acid.

 

Small towns all over India are lined with beauty parlours and gymnasiums. In the Doaba region of Punjab, it is not necessary to work up an urban status to sport these facilities. Nearly every biggish village in these districts has beauticians and muscle makers coming out of the mud walls. The lines outside ATMs in places like Darbhanga, in distant Mithila, are much longer than one would expect them to be. BPO is huge business not just in Pune, but even Indore has become quite a hub for these activities, as have several small towns between Punjab and Haryana. Peerless Mutual Funds is opening 31 branches in Tier II and Tier III cities and Karur supplies to international companies like Wal-Mart, J.C. Penny and Target. The 7.7 trillion rupee fund industry has reached saturation point in the eight big cities of India forcing it to move to smaller urban agglomerates.

Is it surprising then that nearly 20% of India’s billionaires live outside metros? Not too long ago Aziz Premji started his upward mobility from a millionaire to a billionaire from a small town called Ahmednagar. Then there are others who are less famous, but seriously wealthy and are from non-metropolitan centres. Nafisa Radiator-wala of Vadodara is the proprietor of Nature’s Glow; Rajendra Shankar produces auto components from Dhanora, Maharashtra; then there is S. Susindran, a garment manufacturer from Karur. While these are not exactly household names, yet they have become wealthy even as they operate out of small towns.

When it comes to just ostentatious splendour, it is hard to beat Sanjay Ghodawat, the Quality Gutka manufacturer. He has 102 cars and is in a fix every morning as he has to choose which one to take to work. More often than not, he gets out of his misery by just flying to his office in his own helicopter. Not just money, but intellectually too we are witnessing a kind of turnaround in smaller urban centres. Patiala is not just known today for its princely past and its aggressive rich landowners. In the district headquarters of this state we now have the renowned Lakshya Institute which coaches eager, young aspirants to technical colleges. Last year 116 of its students were selected for the IITs, and the bulk of the successful candidates came from Patiala.

 

It is important to know why smaller towns and not metropolises are growing so fast. What attracts entrepreneurs and workers to these places? There are probably many reasons for this shift to small towns. The most widely acknowledged is the simple fact of lower real estate costs. Executives of many large companies, like Dominos and Yum Foods (of Pepsi fame), complain that rental values in Delhi or Mumbai make it difficult to generate the kind of profit that would justify their salaries. Alongside, we also need to recognize that the kind of skills required in Indian industry is not really cutting edge, and never has been. We are generally in denial on this one, but it is stubbornly true.

Also, the smaller the urban area, the greater is the proportion of land given to industry and mercantile activities. Cities with over 100,000 have about 1.8% of its developed land devoted to commercial use, whereas in smaller urban areas the proportion is almost 3.2%.¹¹ When we come to industrial use we find once again that while 6.8% of all land is devoted to that purpose in all states, it is but 5.1% in metros and as high as 14% in towns with populations between 5,00,000 (five lakh) to 10,00,000 (ten lakh).¹²

Take again Tiruppur in Tamil Nadu as an illustration of how economically active non-metro urban centres are. This city is the hosiery capital of India. Its share of knitwear in total garment exports is 40% (actually 30% of export from the country), and exports from this city alone amount to Rs 5000 crore annually.¹³ Tiruppur’s contribution to apparel export of India has gone up from 10% to 23% from 1987 to 1996, and this trend is growing.¹⁴ But alongside we need to recognize the important detail that much of this economic growth is powered by the informal sector.

 

In sum, two positive trends emerge from the comparison between the censuses of 2001 and 2011. First, small towns can be engines of development, and planners need to pay attention to them. Second, our liberalized economy is being driven by low wage and low skilled labour. This seamier side of our story of growth is not well known, but receives more credibility from the demographic facts at our disposal. After all, only 13% of our work force is vocationally skilled (compare that to 95% in Korea). Using the material from National Sample Surveys, collected through the 1990s, D.P. Singh noted that the proportion of illiterate migrants in million plus cities was 37.08%, whereas it was 26.73% in smaller towns.¹⁵ Why should that be the case? Another point for planners to ponder over and come up with a solution.

 

Footnotes:

1. Census of India 2001, Series I H-1. Registrar General of Census, Government of India, New Delhi, p. 81.

2. Census of India 2011 (provisional); R.P. Bhagat, ‘Emerging Pattern of Urbanization in India’, Economic and Political Weekly XLVI, 2011, p. 12.

3. Priya Deshingkar and John Farrington (eds.), Circulation, Migration and Multilocational Livelihood Strategies in Rural India, Oxford University Press, Delhi, 2009, p. 15.

4. G.K. Chaddha, Rural Non-Farm Sector in the Indian Economy: Growth, Challenges and Future Direction (mimeo). Paper presented at the joint Jawaharlal Nehru University and IFPRI Workshop, The Dragon and the Elephant: A Comparative Study of Economic Reforms in China and India, 25-26 March 2003, India Habitat Centre, New Delhi, p. 55; see also Omkar Goswami, Rural is Much More Than Only Agriculture (mimeo), CERG Advisory, New Delhi, (n.d.); and Census of India in http://indiastat.com

5. Five Year Plan 2002-2007, The Planning Commission, Government of India, New Delhi, Vol. 1; Annexure 5.3; see also Statistical Outline of India 2006-7, Department of Economics and Statistics, Tata Service Limited, Mumbai, p. 35.

6. Business Plan, Tiruppur Municipality, Final Report, Tamil Nadu Urban Development Fund, Government of Tamil Nadu, Wilbur Smith Associates, (n.d.). http://tiruppur corporation.tn.gov.in/CCP/CCP_BP_ Tiruppur%20-%20Final20%Report.pdf) accessed on 30 April 2011.

7. See urbanindia.nic.in/theministry/subordinateoff/tepo/DMA_Report/CHAPTER_3.pdf; see also Times of India, 20 October 2011.

8. Amitabh Kundu and P.C. Mohanan, ‘Employment and Inequality Outcomes in India’, (n.d.), in http://www.oecd.org/dataoecd/54/51/42546020.pdf; accessed on 23 January 2010, p. 13; see also Pranati Dutta (2010), ‘Urbanization in India’, presented at the European Population Conference, 21-24 June 2006; see http://epe2006.princeton. edu/download.aspx? submissionId=60134; accessed on 23 January 2010; and Amitabh Kundu, ‘Trends and Patterns of Urbanisation and Their Economic Implications’, in Amitabh Kundu (ed.), Urbanisation and Migration: An Analysis of Trends, Patterns and Policies in Asia, Human Development Research Paper Series, vol. 16, no 2009, 2006.

9. Census of India 2001, Part (II) B (i) primary Census Abstract, General Population.

10. Census of India 2001, H Series: census houses and the uses to which they are put, p. 293, table H-1.

11. Umakant Venkateswarlu, Urbanization in India: Problems and Prospects, New Age Publishers, New Delhi, 1998, p. 23.

12. Ibid.

13. Government of Tamil Nadu, op cit., p. 12.

14. Ibid., p. 13.

15. D.P. Singh, India: Urban Poverty Report, Ministry of Housing and Urban Poverty Alleviation, Oxford University Press, Delhi, 2009.