Are Indian Cities Urban?

By Partha Mukhopadhyay (Centre for Policy Research, New Delhi)

Editor’s Note: On March 26, 2021, UAR Co-Editor Yue Zhang participated in the webinar “How Urban is Contemporary India?”, organized by the Munk School of Global Affairs and Public Policy at the University of Toronto. The panel provided critical commentary on the State of the Cities: India Report (SOCR) published by Om Prakash Mathur and his colleagues. This forum is a collection of essays written by the panelists based on their remarks at the webinar. The forum starts with an introduction of the webinar event by Bharat Punjabi, followed by an overview of the SOCR by the lead author of the report, Om Prakash Mathur. The following essays by Jan Nijman, Richard Bird, Partha Mukhopadhyay, Yue Zhang, and Shahana Chattaraj provide reflections on the SOCR and India’s urbanization from an interdisciplinary perspective. The forum concludes with Om Prakash Mathur’s response to some of the questions raised by the panelists. In publishing this forum, we hope to invite more scholarly debates on global urbanization, especially the drastic urban transformation in the Global South.

As Professor Mathur indicates, we really do not have a good sense of what is urban in India. In part this is because it is extremely hard to be formally urban in India because one has to jump through three hoops, viz. density, size and then finally occupational structure. This is in contrast to China where the definition of an urban area is administrative and includes what may charitably be called a significant part of the urban periphery. Curiously, when attempting a like to like comparison using 2001 data Uchida and Nelson (2008) found that while Indian urbanization increased from 28% to 43% or even 52%, Chinese urbanisation did not budge from the then official figure of 36%. Of course much has changed from that time, but the broad question that professor Mathur poses remains relevant.

The question I pose here, while inspired by Prof. Mathur’s provocation, is, however, slightly different. What I wish to ask is whether Indian cities are truly urban. What do I mean by that? I mean that urbanization is usually associated with social emancipation and political agency (Wirth 1938, de Coulanges 1866)1 and economic progress (see Glaeser 2012 for a recent exposition). It is for these qualities that the process of urban transformation is imbricated with not just growth, but development, the reason why it is so desired and also the reason why it is resisted. How do Indian cities fare on these metrics?

Social emancipation is a matter of considerable import in India because social oppression has historically been characteristic of Indian society, especially on grounds of caste and to some extent on grounds of religion too. Recent work on these aspects reveal a disquieting feature.

Susewind (2017), Bharathi, et. al. (2021), Singh, Vithayathil and Pradhan (2019) and Sidhwani (2015) show that segregation in major Indian cities is quite pronounced on grounds of religion, as well as on the basis of caste. Even in and around the national capital region of Delhi, one of the most “urbanized” spaces in India, Badrinathan and Kapur (2021) find that retrograde social attitudes continue to persist. They find that 43% of people of respondents would not invite a person from lower caste to their home for a meal. Further, while a majority still accepts commensality, the acceptability of inter-caste marriage was much lower. Less than 2% of the least wealthy would accept marrying outside the caste, religion or even language and while the acceptance did grow a little as the wealth of the household increased it never crosses into double digits – 7% of wealthiest households are willing to accept inter-caste or inter-lingual marriages, while interreligious marriages are frowned upon by over 96% of even richer households (Reed 2021).2

On the political side, Indian cities have very limited agency. As India has urbanized, city politics has not evolved in tandem. The picture in Sivaramakrishnan (2011) is not very different from Jones (1974).  The 74th Constitutional Amendment, which gave constitutional status to urban local bodies (ULBs) enabled the states to decide which functions to transfer to the ULBs and, as a result, even large and apparently successful metropolises like Bengaluru do not have control over their water supply and sewerage, their electricity, their land allocation or even their public transportation. Each one of these is under the control of an agency of the Karnataka state government. Local governments spend a very small portion of the total government expenditure, only about 3% by one estimate (Ren 2015) and thus the politics of the city is not very interesting – they are hardly the home of associations. Most of the expenditure on urban services is usually under the control of the state government, leaving the city to basically pick up the trash.3 This is reflected in the participation in local elections vis-à-vis state elections. Joshi and Maiti (2012) find that voting participation in assembly elections in rural constituencies has been more than in urban constituencies and participation in panchayat elections is much higher than in municipal elections.4

Finally, are cities sites of economic progress, engines of growth? Are they places of learning and spillover of knowledge? One of the posited channels of such spillovers is the exchange of tacit knowledge embodied in employees, e.g., via labour mobility (Foster-McGregor and Poschi 2016, Fallick, et. al. 2006).  But, the urban labour market is increasingly becoming contractual, with rapid growth in staffing firms and contract labour. Bertrand, et. al. (2021) find that the share of contract workers in large firms (more than 100 workers) rose from 20% in 2000 to 38% in 2015.  While this may lead to more value-addition, largely by reducing labour cost, it may hurt knowledge spillovers and productivity growth, which are negatively associated with high shares or temporary workers, more flexible workers, higher turnover, etc. are all associated with lower productivity growth and new product development (see, for example, Zhou, et. al. 2011, Lucidi and Kleinknecht 2009, Arvanitis 2005).5 Neither is there much formal worker training, in part due to the large number of tiny enterprises though the number of highly educated (graduate) workers is, rising, from 16.1% in 1991 to 22.9% in 2011. Further, existing social cleavages also find economic expression. Thorat, et. al. (2009) find that the odds of a scheduled caste applicant being asked to interview were about two-thirds and that of Muslim applicant one-third of the odds of a high caste Hindu applicant for identical job applications. This points to the “existence of discriminatory processes … even among well-qualified university-educated Indians applying for jobs in modern private sector businesses in India”.6 These features diminish the effectiveness of knowledge spillovers as an engine of growth.

This seems to be reflected in the rural-urban composition of GDP and associated workforce. Figures 1 and 2 draw upon the National Accounts Statistics, which periodically allocates the GDP to rural and urban areas (latest in 2011-12), and the Census of India 2011, to calculate value added per worker for the GDP sectors. Two features become starkly evident.

First, in key urban sectors like manufacturing and real estate and other services, the estimated urban value added per worker is lower than that in rural areas (ratio less than one)! This implies that if one moves a manufacturing worker from rural to urban areas, the total value added will actually decline.  In real estate and professional services, the much larger share of workers in the sector in urban areas is not matched by a sufficiently increased productivity. Second, relative to value added per work in rural agriculture, all other sectors have much higher value added per worker, whether they are located in the urban area or are part of the rural non-farm sector, i.e., there are substantial gains from moving to non-farm work, even in rural areas. The two findings indicate that urbanization has not been an automatic economic positive.7

Thus, on all three metrics, social, political and economic, it would appear that the potential of Indian cities as transformative spaces vis-à-vis rural areas is not high.  One is thus tempted to conclude that Indian cities are not particularly urban – a telling indictment of the fractured nature of Indian society, its constricted constitutional and political imagination and the surprisingly weak economic advantage provided by its urban environment. The true flourishing of Indian democracy and economy can only happen once it moves away from this low-level equilibrium.

End Notes

  1. As de Coulanges (1869) la ville était le lieu de réunion, le domicile de cette association (the city is the place to meet, the home of this association)
  2. In the US as of 2010, 8.8% of couples with at least one white partner were mixed race. Of these, 1.1% were white – black. See
  3. This continues even though the problem is recognised at the highest levels. For example, Mr Kant, the CEO of NITI Aayog, too points to the need for “empowering political leadership at city level” (Kant and Mehta 2016).
  4. In order to control for differences in constituency definitions, they compare the participation in state assembly elections vis-à-vis local elections in Hyderabad, after making adjustments for comparable boundaries and find that the participation in local elections is lower for all constituencies.
  5. Even though Bertrand, et. al. (2021) estimate that the rise in share of contract labour increased total factor productivity in Indian manufacturing by 7.6%, they also find that this was based on a reduction in misallocation of labour between large and small firms – a one-time effect with limited impact on the long-run growth rate.
  6. The study used identical CVs with different caste specific names. Carswell and De Neve (2014) find a more nuanced picture in the Tiruppur garment industry, with lower castes gaining access in one village and being disconnected in another. Uchikawa (2017) also finds that “social networks function beyond community and caste while Strümpell (2008) finds that caste practices are negated within a company settlement of a public sector – ownership may matter according to Parry (1999) – power plant, but maintained outside in the workers’ villages.
  7. This could also be due to the way data is collected. Given the cost of urban land, large organized sector manufacturing complexes may be included in rural GDP, if located in rural areas at the urban periphery.


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Partha Mukhopadhyay

Senior Fellow
Centre for Policy Research
Chanakyapuri, New Delhi

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