Aromar Revi's Annual day lecture to the Symbiosis School of Economics, Pune

1. India’s Urban Transformation: iihs
The Way Forward
Symbiosis, Pune 4th March 2013
Aromar Revi
arevi@iihs.co.in ; @AromarRevi
www.iihs.co.in

2. The challenge of contemporary Indian cities:
integration of the pre-colonial, colonial, ‘modern’ & informal

3. Yamuna Pushta: c. 2003

4. Yamuna Pushta demolitions: Feb-May 2004

5. Yamuna Pushta Forced Evictions: Feb – May 2004
2004
2011

6. A 30+ year process of state-led eviction, demolition and exclusion
Dupont, 2011

7. Systematic processes of eviction and & Resettlement Colonies (1990-2008)
Delhi: Demolished Settlements regularisation define Delhi’s land ‘market’
Pushta
Dupont, 2011

8. Our future hinges on
the state of Indian
cities

9. Urban Development: catalysing five national outcomes by the 2030s
Reduced Poverty and Inequality
Inclusive Economic Growth
Social Transformation
Environmental Sustainability
Unified & Robust Polity

10. A long view of History

11. Relative National Share of Global Economic Output (1500 to 2050ACE)
35%
30% China
% Share of Global Output
US
25% India
20%
15%
Russia
10% UK
5%
Japan
0%
1500 1600 1700 Time 1800 1900 2000
US China India UK Japan Russia
Asia returns to centre of the global economy after a gap of 250 years

12. Urbanisation: a key growth & economic development driver

13. New Geographies = New 21st century Histories
Early- mid 21st century
16-18th century
19- mid 20th century Late 20th century

14. The Challenge of the 21st century Sustainability Transition
Present consumption requires ~2.0 worlds
21st century Population growth needs 1.5+ worlds
Available
only One
World
Ending poverty at present throughput ~2.0 worlds
The Sustainability traverse will be largely played out in Chinese & Indian cities

15. Himalayan Glacial melt (1921-2009)

16. Future History - Sustainability Transitions: 2005 
‘Sustainable
Development’
Can China traverse the environmental Kuznets curve; Germany & USA converge
without serious Human Development decline India ‘tunnel through’;
or will there be serious international ‘resource’ conflict?

17. China’s urbanisation: 1992-2012

18. Deng’s tour of the Southern provinces: Feb 1992

19. China’s urbanisation: the view from Space..

20. China: Feb 1992

21. China: Feb 2000

22. China: Feb 2008

23. Why is China’s urbanisation important?
1. It is the largest urbanisation in human history:
the addition of ~300 million people to China’s
urban population in 20 years
2. This propelled the largest economic growth surge
in history

24. India’s urbanisation: the view across time..

25. Major Powers of the Indian Subcontinent
(500 BCE to 2010 ACE)
Maurya Gupta Hoysala Tuluva Mughal British

26. India Urban Dynamics: 1951-2031

27. 1951
Tibet
W. Pakistan
Nepal
E. Pakistan
India
Population Size (millions)
< 0.1
0.1 – 0.5
0.5 - 1
1-5
>5
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10

28. India 1951
• Only 5 cities with a population > 1m and 41 with > 0.1m
• Much of India lived in 0.56 m villages

29. 1961
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Urban Population Growth
Kolkata
(5.7)
Population Size (millions)
800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 500
400
1-5 300
200
>5 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement Growth

30. 1971
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Urban Population Growth
Kolkata
(6.9)
Mumbai
(5.8)
Population Size (millions)
800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 500
400
1-5 300
200
>5 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement Growth

31. 1981
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Delhi Urban Population Growth
(5.6)
Kolkata
(9)
Mumbai
(8.6)
Population Size (millions)
800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 500
400
1-5 300
200
>5 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement

32. 1991
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Delhi Urban Population Growth
(8.2)
Kolkata
(10.9)
Mumbai
(12.3)
Population Size (millions)
800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 500
400
1-5 300
Chennai 200
>5 (5.3) 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement Growth

33. 2001
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Delhi Urban Population Growth
(12.4)
Kolkata
(13.1)
Mumbai
(16.1) Hyderabad
(5.4)
Population Size (millions)
800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 Bangalore
500
400
1-5 (5.6) 300
Chennai 200
>5 (6.6) 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement

34. 2011
800
Population (in millions)
700
600
500
3 cities with a 400
300
population > 10 m 200
and 53 with > 1m 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
833 m live in 0.64 mDelhi Urban Population Growth
villages (16.9)
377 m live in ~ 8,000
urban centres
Ahmedabad
(5.7)
Kolkata
(15.5)
Mumbai
(20) Hyderabad
(6.7)
Population Size (millions) Pune
(5.0) 800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 Bangalore
500
400
1-5 (7.2) 300
Chennai 200
>5 (7.5) 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971- 2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement

35. India 2011
• 3 cities with a population > 10 m and
• 53 cities with > 1m
• 833 m live in 0.64 m villages
• 377 m live in ~ 8,000 urban centres

36. 2031
800
Population (in millions)
700
600
500
400
300
200
100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Delhi Kanpur Urban Population Growth
(24.4) (5.1)
Ahmedabad
(8.5)
Kolkata
Surat (22.3)
(6.3)
Mumbai
(28.6) Hyderabad
(9.9)
Population Size (millions) Pune
(7.4) 800
< 0.1 700
Urban Settlements
0.1 – 0.5 600
0.5 - 1 Bangalore
500
400
1-5 (10.6) 300
Chennai 200
>5 (11.1) 100
0
1951 1961 1971 1981 1991 2001 2011 2021 2031
Source: Census of India, 1971-2001
UN, 2007
IIHS analysis, 2009-10 Large Urban Settlement Growth

37. India 2031
• 6 cities with a population > 10 m and > 70 with > 1m
• How many Indians will live in medium & small towns?
• The bridge between rural & urban India

38. India’s urbanisation: the view from Space..

39. Feb 1992

40. Feb 2008

41. India: 13 Nov 2012

42. Spatial Concentration of Economic
Activity: 2005

43. District agricultural
output distribution: 2005

44. District Manufacturing
output distribution: 2005

45. Top 100 Cities : 2011
Land
Land 0.24%
Population
Population 16%
Output
Output 43%
0 10 20 30 40 50
Proportion of all-India

46. Distribution of India’s Population by Settlement Size : 1951-2011
100% 1%
3% 3% 4% 3% 4% 4%
1% 3% 2%
3% 3% 2%
2% 3%
4%
265m
7% 4%
90% 8%
6% 5%
6% Class I Cities
3% 8% 7%
1% 8%
5% 8%
1% 9%
80% 8% 1% 8%
200m 112m
10% 8%
Proportion of All India Population (%)
1%
17% 12% 1% 9% Other Urban Centres
70% 1%
18% 14%
16%
20%
60% 17% Large Villages
21%
20%
50% 22%
21%
23%
21%
40% 24%
20%
21%
30%
Medium and Small
537m
19%
19%
18%
18% Villages
20% 17%
15%
12%
10% 22% 10%
17%
13% 8%
10%
7% 5%
3%
0%
1951 1961 1971 1981 1991 2001 2011

47. Urban Growth & Sprawl: 1991-2011

48. Delhi : 1992
8.7 million
8.7 million
1992

49. Delhi : 2000
13.7 million
13.7 million
2000
8.7 million
1992

50. Delhi : 2011
16.3 million
16.3 million
2011
13.7 million
2000
8.7 million
1992

51. Bangalore : 1992
3.4 million
3.4 million
1992

52. Bangalore : 2001
5.7 million
5.7 million
2001
3.4 million
1992

53. Bangalore : 2009
8.5 million
8.5 million
2009
5.7 million
2001
3.4 million
1992

54. Chandigarh : 1989
0.6 million
0.6 million
1989

55. Chandigarh : 2000
0.8 million
0.8 million
2000
0.6 million
1989

56. Chandigarh : 2011
1.0 million
1.0 million
2011
0.8 million
2000
0.6 million
1989

57. Migration Trends: 1961-2011

58. Components of Urban Population Growth : 1961 – 2011*
100
90
80
Urban Population Growth (in million)
70
60
50
100
40 90
80 Net Rural to Urban
Urban Population Growth (in million)
30 70 migration
60 Expansion in urban area /
20 agglomeration
50
10 40 New towns less
30
declassified towns
0 20 Natural Growth
1961-71 10 1971-81 1981-91 1991-2001 2001-2011

59. Estimated Major
Inter-State Migration
Streams : 2001-2011

60. Estimated Top 50% Migration Streams into Urban Areas: 2001-2011

61. The national economic context:
1970-2010

62. India Rural: Urban GDP share (1970-2009)
70
Early Phase I Phase II
60 economic economic economic
reforms reforms reforms
50
Rs Lakh Crore
40
Urban
30
Rural
20
10
0
1970-71 1975-76 1980-81 1987-88 1993-94 1999-00 2004-05 2009-10
(estimate)
Post-liberalisation boom in India’s urban All amounts in constant
2009-10 prices.
economy, esp. In the Phase II period Source: National Accounts
Statistics

63. India Rural: Urban GDP fraction (1970-2009)
100%
Early Phase I Phase II
90% economic economic economic
80% reforms reforms reforms
70%
Percent of Total
60%
50%
Urban
40% Rural
30%
20%
10%
0%
1970-71 1975-76 1980-81 1987-88 1993-94 1999-00 2004-05 2009-10
(estimate)
Above half of India’s GDP comes from All amounts in constant
2009-10 prices.
~8,000 urban areas Source: National Accounts
Statistics

64. India: Urban sectoral GDP growth (1970-2009)
35 Other Services
30 Public Admn & Defence
25 Real Estate & Business Services
Rs Lakh Crore
Banking & Finance
20
Transport, Storage & Communications
15
Hotels & Restaurants
10
Trade
5 Construction
0 Electricity, Gas, Water
Manufacturing
Mining
Agriculture
Manufacturing, trade, transport, banking and real All amounts in constant
2009-10 prices.
estate primary drivers of the urban economy Source: National Accounts
Statistics

65. India: Urban sectoral GDP structure (1970-2009)
100% Other Services
Percent of Total
90%
Public Admn & Defence
80%
Real Estate & Business Services
70%
60% Banking & Finance
50% Transport, Storage & Communications
40%
Hotels & Restaurants
30%
20% Trade
10% Construction
0%
Electricity, Gas, Water
Manufacturing
Mining
Agriculture
Decline in manufacturing , construction and trade All amounts in constant
2009-10 prices.
shares. Growth in transport, banking & real estate Source: National Accounts
Statistics

66. India: Inclusive Wealth trends (1990-2008)
Dasgupta et. al, 2012
India’s Inclusive Wealth base is about 4 times its GDP.
Of this, the largest component is ‘human capital’

67. India’s Coming transition (2011-2031)
• India will add at least 300 million new people to its cities in the
next 30 years
• This is on top of the current urban population of ~300 million, of
whom over 70 million are poor
• In 2031, three of the ten largest megacities in the world will be in
India: Delhi, Mumbai, Kolkata
• Over 75 other cities will have a population of over 1 million
• This will be the second largest urbanisation in human history
creating huge market opportunities and development challenges
• The only option to avoid complete systemic urban breakdown is
the simultaneous transformation of India’s cities and its villages
• A wide range of technical, institutional and social innovations will
be required to enable this

68. India: Urban Workforce distribution (2004-05)
30
25
Percent of Total
20
15
10
5
0
Two-thirds of the urban employment is in Source: Sachar
Committee Report,
manufacturing, trade & other services. 2006

69. India: GDP & Employment structure (2009)
Urban Formal :
5% Urban Formal : 25%
Urban Informal :
25%
Urban Informal :
26%
Rural : 45%
Rural : 70%
Source: NCEUS, 2009; Kannan & Raveendran (2009)
The urban informal sector with a quarter of the workers produces roughly a
quarter of the GDP. The urban formal sector with 5 percent of the workers
produces a similar share of the GDP.

70. India: Urban Unorganized Sector GDP structure (1980-2009)
100%
Other Services
90%
80% Real Estate & Business Services
70%
Banking & Finance
Percent of Total
60%
50% Transport, Storage & Communications
40% Hotels & Restaurants
30%
Trade
20%
10% Construction
0%
Manufacturing
Agriculture
Share of transport and real estate has grown,
construction and trade remained steady and All amounts in constant
manufacturing contributors to urban unorganised 2009-10 prices.
Source: National Accounts
sector output declined Statistics

71. India: Urban GDP composition (2009-10)
3.5
3
Rs Lakh Crore
2.5
2
1.5
1
0.5
Organized
0
Unorganized
Urban India has a highly differentiated structure of economic output and
mix of informal sector activity – which has been poorly addressed in
urban development

72. India: Informal & Formal Worker productivity
6,00,000
(GVA per worker 2004-05)
5,00,000
Rs per worker
4,00,000
3,00,000
2,00,000
1,00,000
0
Aggregate GVA per worker Estimated GVA per worker in unorganized sector
Labour productivity of some informal sector activities are comparable
with the formal sector: trade, construction, real estate, personal
services

73. Urban Poverty and Inequality

74. City-size wise Urban Poor and Slums
100%
90%
80%
Large Cities
70%
(>1million)
Percentage Share
60%
Small and
50% Medium
Cities
40%
30%
20%
10%
0%
Share of urban poor Share of slum population

75. Caste-wise Wealth Distribution in Rural India (2002)
Rural Rural
600 600
500 500
400 400
ST
SC
300 300
OBC
FC
200 200
NH
100 100
0 0
5 10 15 20 25 15 20 25 3045 50 45 50 55 6070 75 75 80 85 9095
5 10 30 35 40 35 40 55 60 65 65 70 80 85 90 95

76. Caste-wise Wealth Distribution in Urban India (2002)
Urban Rural
600 600
500 500
400 400
ST
SC
300 300
OBC
FC
200 200
NH
100 100
0 0
5 10 15 20 25 15 20 25 3045 50 45 50 55 6070 75 75 80 85 9095
5 10 30 35 40 35 40 55 60 65 65 70 80 85 90 95

77. Managing India’s Urban Future
2011-2031

78. India’s Urban Future (2011-2031)
• India will add at least 300 million new people to its cities in 30 years
• This is on top of the current urban population of ~300 million, of
whom over 70 million are poor
• In 2031, three of the ten largest megacities in the world will be in
India: Delhi, Mumbai, Kolkata
• Over 70 other cities will have a population of over 1 million
• This will be the second largest urbanisation in human history creating
huge market opportunities and development challenges
• The only option to avoid complete urban breakdown is the
simultaneous transformation of India’s cities and its villages
• The key to this the education of a new generation of changemakers
and entrepreneurs and building the capacities and motivation of
current working professionals

79. XI Plan Sectoral Investment Allocations (2007-12)
300
250
> 10 times
200
(Rs Thousand Crores)
150
100
50
0

80. India: the opportunity of ten simultaneous Transitions
1. Demographic transition: population stabilisation & aging
2. Health transition: infectious + lifestyle disease burden
3. Education transition: elementary  secondary tertiary
4. Energy transition: oil + coal  gas + renewables
5. Environmental transition: ‘brown’ + ‘grey’ + ‘green’ agendas
6. Information transition: post phone cell phone + www
7. Livelihoods transition: agrarian  green + knowledge jobs
8. Economic transition: primary + secondary  tertiary-led
9. Political transition: decentralised, youth and urban
10. Urban transition: rural  ‘urban’

81. India’s Urban Development opportunity:
stylised facts & ‘speculation’
Indicator Unit 2012 2030 2040
GDP/cap (2010 prices) Lakh Rs/capita ~0.75 ~ 2.5 ~ 4.5
GDP (@ ~7% growth) crore crores 1 3.5 6.5
Urban share % 55% 70% 80%
Urban GDP lakh crores 55 231 520
∆ Urban GDP lakh crores/yr ~9 ~ 29
Urban Informal lakh crores 26 115 260
Life Expectancy years 68 75 80+
HDI 0.55 0.75 0.9
Consumption Gini 0.38 0.33 ? 0.3 ?
Carbon footprint t C/capita 1.5 2.5 ? ~ 1.5 ?

82. Who manages Urban India?
Top Management
• MPs & MLAs 5,300
• Higher Judiciary 650
• IAS & IPS 8,200
• CXOs (top 500 corporates) ~ 5,000
• NGO leadership ~ 1,750
Total 20,900
% educated & trained in urban practice < 5%
Middle Management
• Senior Municipal officials ~ 4,000
• Senior Engineers ~ 8,000
• Urban Planners ~ 2,000
Total ~ 14,000
% educated & trained in urban practice < 20%