Abstract
The main objective of this paper is to analyze the recent trends and patterns of urbanization before and after the economic reforms in India. In addition, the paper explores the emerging patterns of urban growth and captures the changes through development indicators based on the available data from the Census of India and National Accounts Statistics. The study employs an exponential growth rate and a linear model for determining the pace of urbanization, which is then plotted on a scatter diagram. It is surprising to note that wherever urbanization was expected to accelerate, it has instead slowed down. Economic reforms have been not uniformly implemented because of the faulty national economic policy which has discouraged the growth of urban employment and is a cause for concern that requires political attention. The study concludes that economic reforms are necessary for accelerating urbanization, promoting small and medium-sized urban areas, human capital, socio-cultural mobility, and plans for eco-friendly green cities.
Introduction
Currently, the world’s urban population constitutes 54% (UNDP, 2014), while as a developing country, India’s urban population proportion has been low and fairly unimpressive as compared with the rest of the world as well as other developing nations. As per the 2011 census, only 31.16% of India’s population is urban, as against 52% of China, 54% of Indonesia, 87% of Brazil and 61% of South Africa. However, India’s contribution to the total global urban population amounts to 10.6%, while that of China to 19.54% for 2014. When it comes to South Asia, India has an advantage over some of its neighbors in terms of urbanization. Countries such as Afghanistan (23.5%), Bangladesh (28.4%), Sri Lanka (15.1%) and Nepal (31%) account for lower levels of urbanization than India, excepting Pakistan (36.2%) and Bhutan (35%) that display higher levels of urbanization (UNDP, 2014).
In 1981, India was ranked 91 out of 124 countries in terms of urbanization, with only 33 countries showing lower urbanization rates than India (Mohan and Pant, 1982), but was ranked 159 out of 195 countries for the year 2011 (UNDP, 2014), indicating that urbanization in India has remained almost at the same level as compared with other countries. This low level of urbanization in India is a clear demonstration of the failure of five-year plans and the implementation of policies towards the improvement of urbanization.
Urbanization is a process of population concentration, structural and socio-cultural changes affecting both the people and the nation. Urbanization refers to an increase in the number of towns and populations of urban areas, characterized by social, economic and psychological changes that constitute the demographic landscape. Demographic processes are influenced by changes associated with the concentration of population in cities not only in terms of age groups and sex structure but also their occupational composition, educational levels and occupational mobility (Sarkar, 2019a). The urban location differs in terms of population, economic activity, type of organization (formal and informal) and many others.
The Indian economy has come to be considered one of the fastest growing economies of the world. However, it was in a precarious situation in 1991. The economic crisis of 1991 could be attributed, to a large extent, to an inefficient administration of the economy during the 1980s (Panchamukhi, 2000). The income that the government was generating was not enough to cover the increasing expenses. Therefore, the government was forced to borrow heavily from external sources, as a result of which India found itself in a debt trap. A debt trap is a deficit that occurs due to an increase in government expenditures relative to its revenues. Due to the consistent failure of previous economic policies that ultimately led to a serious balance of payments crisis in 1990, the Government of India (GoI) was forced to think of drastic economic policy responses.
Accordingly, the economic reforms initiated in 1991 brought about various essential changes, not only in the economic and social structure but also in urban development in India. The new economic reforms in India, also referred to as neoliberal, and the New Industrial Policy (NIP) of 1991 formed the core of policy. The underlying rationale of the reforms was to liberalize the economy, simplify regulations, provide additional roles to the private sector and open up the economy to competition at the global level (Bhalla, 1995).
The previous economic development policies created many problems with respect to urban development in India, with economic reforms also contributing to a portion of these issues. The rapid urban growth, indicated by the number of million-plus cities that grew up from 23 in 1991 to 53 in 2011, has led to several issues such as urban spread, inadequate urban infrastructure and deterioration in the quality of urban living conditions (Chadchan and Shankar, 2012).
In general, an unplanned and uncontrolled rapid growth has produced severe negative impacts on urban dwellers and their environment. Undoubtedly, recent improvements in some urban centers seem impressive, but most of the cities in India have a long way to go before solving many of the problems facing them. Most of them continue to face the problem of providing adequate urban services for their inhabitants.
The reasons for the growth of each one of these categories may also be different. In physical terms, urban centers are characterized by huge populations with varied economic strengths, lifestyles, occupations, organizations, land-use patterns and institutions. Therefore, the development of urban centers requires an efficient, effective and citizen-centric planning. In India, urban centers are usually governed by diverse urban local bodies, but in order to keep up the urban infrastructure and services, a massive amount of resources is required. The present study aims to critically explain the recent trends and patterns of urbanization before and after the economic reforms in India. Also, the paper attempts to examine the emerging pattern of urban growth in India and to capture the changes in development indicators based on census data.
This paper is divided into five sections. In the first section, an overview of the conceptual background of economic reforms and its relation to urbanization in India is presented. In section two, we discuss briefly the spatial variations, trends and patterns of urbanization in India. In the third section, the emerging pattern of urban growth in India is examined. In the fourth section, an attempt is made to understand the urbanization trends in India before and after the economic reforms. In the final section, the main findings and conclusions of the study are summarized.
Data and methods
The analysis is based on secondary sources of information, i.e., the Census of India, Sample Registration System (SRS) and National Accounts Statistics. Data utilized in this paper have been taken from the Census of India 1981, 1991, 2001 and 2011. The process of urbanization has been analyzed based on selected urban indices-level of urbanization, the decadal growth of urban population, annual exponential growth rate and tempo of urbanization. Urban growth rate refers to changes in the size of either urban areas or an urban population expressed in percentage terms and is calculated by
Where pf is population of the final year (2011) and pi is population of the initial year (2001).
Annual exponential growth rate (AEGR) is calculated by =
Where t is time interval (10), log is a natural log, p2 is population at time period t and p1 is population at period 0.
Tempo or pace of urbanization is the rate of change in the population (in percentage terms) between two census years and is calculated by using a linear model.
Where
A scatter diagram is used for locating the correlation between two variables, such as per capita income and urbanization; similarly, the share of GDP in the industrial sector and urbanization. The correlation between the share of GDP in the service sector and urbanization in India is also measured.
Findings and discussion
Spatial variations, trends and patterns of urbanization in India
At the beginning of the twentieth century, the urban population of India was only 25.85 million, representing 10.84% of the urban population in 1901 before reaching to 31.2% by 2011. In absolute terms, the urban population stands at 377.1 million, according to the 2011 census. During the period between 2001 and 2011, the growth rate of urban population increased to 3.38%, an increase of 92 million urban populations due to globalization, with larger opportunities for employment and technological progression (Bhagat, 2011; Kundu, 2011; Misra, 2016; Sarkar, 2019a).
Figure 1 shows that in 1911, there was a negative growth in the urban population. It was 10.84% in 1901, which decreased to 10.29% in 1911. The crucial reasons mentioned for this decline were starvation and plague that occurred during the 1901–1911 decade. But in 1921, the urban population expanded to 11.18%, even though the 1911–1921 decade was under the shadow of a flu epidemic (Sarkar, 2019b). Likewise, in 1931, the level of urbanization increased to 11.9%, a slight improvement as compared with the previous decade and, very importantly, this occurred during the year of the agricultural depression (Sarkar, 2019a). Therefore, over a span of the initial 30 years, i.e., 1901–1931, the level of urbanization witnessed an increase from 10.8 to 11.9%. However, it was predominantly after 1931 that the urbanization process gained momentum, with the urban population increasing at a faster pace.

Rural and urban population and urban–rural growth differential (URGD) in India, 1901–2011.
In 1941, the urbanization rate was 13.86%, while the growth rate was 31.97% during the 1931–1941 periods. The decade of 1941–1951 registered one of the fastest growing urban populations, that is, 41.42%, and a 17.92% level of urbanization. The high urban growth rate recorded in the census year of 1951 was largely because of a massive population displacement during the partition of the country in 1947, with a large number of the rural population moving to large urban centers (Kundu, 2011). In India, the urban–rural growth differential (URGD) 1 has been close to or below 2% since 1951 (see Figure 1). After independence, the growth rate of urbanization shows a steady upward trend until 1981. This exponential growth has been explained by the introduction of 782 new cities in the 1981 census (Misra, 2016). However, the subsequent decennial growth rate of urbanization indicates a slowdown. For the decade of 1981–1991, due to the slow pace of economic development, the urban growth rate has decreased to 36.19% as compared with the previous decade of 1971–1981.
What is very surprising to note from Table 1 is the steep decadal decline in the urbanization rate over the period from 1991 to 2001. It has been seen that from 1991 to 2001, the urban populace expanded from 217.17 to 285.35 million, while the number of towns expanded from 3768 to 5161 and the urbanization level from 25.7 to 27.8%. On the other hand, over the same decade from 1991 to 2001, the percentage change in the urban population shows a reduction from 2.38 to 2.06, the decadal urban growth reduced from 36.19 to 31.3%, respectively.
Urbanization trends in India (1901–2011).
This downward trend appears shocking and surprising, particularly at a time when India entered the phase of liberalization, privatization and globalization in the post-1991 situation. One would have expected both the urbanization level and the rate of urban growth to increase significantly due to the availability of greater opportunities in urban India with the country entering the world markets (Sarkar, 2019a). However, the pattern of urbanization in India from 2001 to 2011 shows a different and better trajectory, with the urban population in India reaching to 377.1 million and the number of urban centers increasing to 7935 (Sarkar, 2019b). The decennial urbanization growth rate has increased from 31.3% in 2001 to 31.8% in 2011.
Emerging pattern of urban growth in India
As per the Indian census, we come across six categories (see Table 2) of urban centers, based on their population size, regardless of their status, i.e., either as census or statutory cities. A significant feature of urbanization in India is that most of the urban population is concentrated in Class I cities. Class I cities include million cities as their population exceeds 1 million and above. Urban agglomerations with populations of 1 million or more are called metropolitan areas. Table 2 indicates the percentage of population living in urban areas across different class cities in India from 1901–2011. According to the 1901 census, only 26% of the urban population lived in Class I cities, while 47% of the urban population lived in Class IV, V and VI cities. However, after independence, the percentage of the urban population in Class I cities shows an increase from 44.5% in 1951 to 68.5% in 2001, while the percentage share of all other smaller cities and towns (Class II to Class IV) shows a steady decline over the period.
Growth and distribution of towns in India (1981–2011).
Notes: (1) N = number of cities by size-classes. (2) AEGR = annual exponential growth rate.
Source: Author’s calculation using the various census data.
In 2011, we find the scenario reversed, with the percentage of urban population in Class I cities decreasing (60.4%), and the percentage share of all smaller cities and towns (Class II to Class VI) increasing (39.6%) over the last decade. From Table 2, it is observed that although the numbers of cities are more in Class IV and Class V, the percentage of urban population is high only in Class I cities. Large cities with an unusually large population size have led to a virtual collapse of urban services, followed by problems in housing, slums, water, infrastructure and quality of life (Datta, 2006).
The number of cities in the Class VI size increased from 479 to 569 from 1901 to 1951, while between 1951 and 2001, the number decreased to 232. Moreover, the number of cities in Class V shows some fluctuations over the period from 1901 to 1941, but a decreasing trend over the period from 1951 to 2001, i.e., from 40.21% to 20.17%. It has been observed that, in 2011, the number of cities of Class I size has increased to 468, but the percentage of population shows a decrease to 5.9% due to an increase in the cost of living index—it is especially people who work in the unorganized sector who can’t bear the burden of such a high cost of living in the Class I cities.
According to 2011 census, in terms of the absolute numbers of population living in urban areas, Maharashtra occupies the first place with 50.8 million and also contributes to 13.5% of the total urban population of the country. Uttar Pradesh represents approximately 44.4 million, followed by Tamil Nadu with 34.9 million. Thus, the central, southern, and eastern zones account for the highest number of Class I cities. At the state level, most states show that larger cities grow faster than smaller cities. However, the states such as Tamil Nadu, West Bengal, Karnataka, and Gujarat show that larger cities grow more slowly than smaller cities. It also shows that weak states such as Bihar, Uttar Pradesh, Jharkhand, Madhya Pradesh and Rajasthan display a vast difference between the growth rates of small towns and large cities (Bhagat, 2004).
The distribution of urban population across cities of different sizes reveals variation, with the highest concentrations of urban population in large urban centers vis-à-vis smaller towns and that the majority of the population prefers to live in large cities, as can be seen from Figure 2. This trend has become more explicit in the last decade, 2001–2011. According to the 2011 census, the most significant number of Class I cities are found in states like Uttar Pradesh, West Bengal, Maharashtra and Andhra Pradesh. It is also found that northeastern states and union territories account for a lower number of Class I cities.

Percentage distribution of urban population by city size class in India (1901–2011).
Urbanization pattern in India before and after the Economic Reforms
The globalization of urbanization is only a recent phenomenon. Most of the developed countries have already reached a very high degree of urbanization. However, the current process of urbanization has only begun in the second half of the twentieth century in the developing countries. It is important to note that the level of urbanization is closely linked to the level of development. For example, the level of urbanization is much higher in the context of developed countries than in developing countries (Khairkar, 2009). Urbanization is not only the outcome of industrialization but also the consequence of modernization.
The urban centers of India (comprising cities and towns) are part of states in which they are located and are thus part of Indian federation with a mixed and open economic system (Narayana, 2010). All investments concerning foreign trade policies are developed and carried out at the national level, while the states and urban centers complement the policies through producers and investors. In addition, they provide fiscal and financial incentives, apart from creating a friendly neighbourhood environment with necessary amenities and infrastructures.
Since 1991, India’s economic reforms in (a) foreign trade in goods and services and (b) privatization of manufacturing and infrastructure with foreign investment have contributed to economic globalization in terms of greater openness to trade and internationalization of capital (Bhalla, 1995). The mid-1980s witnessed the beginning of India’s trade-opening policies, which further intensified and expanded with the introduction of national economic reforms since July 1991 (See Figure 3). The reforms began to overcome the 1990 crises, such as (a) the decline in economic growth and foreign exchange reserves, and (b) the increase in domestic price inflation, the current account deficit and the budget deficits of the Government of the Union. As the crises generalized both in the internal and external sectors of the economy, the reforms had to start simultaneously across different sectors: fiscal sector; industrial sector; public sector; financial sector (i.e., banking sector and capital market); and external sector, which includes trade, exchange rate, and foreign investment. In general, the reforms were oriented towards the stabilization and structural adjustment of the country.

Mathur (2005) argues that urban growth post-liberalization came to be determined by the substantial growth of urban population and changes in the proportion of employment in the manufacturing and services sectors. Narayan (2016) examines the causal association between economic development and urbanization in the Indian context, utilizing data from the World Development Indicators (WDI) for the period 1960–2013. The outcomes estimated for India demonstrate that financial growth has had a positive causal impact on urbanization, while urbanization, in turn, has not had any causal impact on economic development. According to Tripathi (2018), economic reforms in India have not promoted urbanization. Economic reforms are required for urbanization through the promotion of small and medium-sized towns, human capital, social portability, and the formulation of adequate plans for new green cities (Tripathi, 2018).
The regional pattern of urban growth and economic development
The pattern of urbanization in the process of globalization shows a more significant growth and concentration of populations in cities of larger class size. Urban economic growth is increasingly accounted for by the services sector, declining participation of the manufacturing sector, and increased labor productivity (Narayana, 2010). Kundu (2011), while exploring the disproportionate economic bases of Class I cities (million-plus cities) and medium towns (50,000 to 1 million population) and small towns (less than 50,000 population) in terms of employment, consumption and poverty observes that they are characterized by an unequal distribution with a few metropolitan cities and more massive megacities growing at a faster rate, given the presence of a large disproportionate urban population in India.
Mills and Becker (1986) point out that even historically, several policies and programs were implemented with a view to controlling urbanization and city size in India. Despite the presence of such policies to control urbanization and city size in India, within the country, urbanization is positively associated with economic development, measured by the average salary and urbanization at the state level (Sridhar, 2016).
The theoretical arguments for urbanization as a source of productivity gains and the strong correlation between income and participation of the urban population have been the basis of literature that promotes urban growth as a path to wealth and development, besides leading to the perception of a strong and positive effect of urbanization on economic growth (Bloom et al., 2008).
Figure 4 shows that the relationship between urbanization and per capita income for Indian states is positive, as may be found in the linear trend line plotted to the data. It has been termed the urbanization–industrialization gap, which is observed in the Indian context as well.

Relationship between per capita income and urbanization, Indian states, 2011.
How is this relationship maintained between the states of India? From the state-level analysis, it is observed that there is no clear relationship existing between urbanization and per capita GDP for 1991 and 2001. It is because Punjab and Haryana were among the wealthiest states in 1991 and also less urbanized. However, for 2011, there is a definite positive relationship observed between urbanization and GDP growth, with more urbanized states like Maharashtra, Tamil Nadu, Gujarat, and Kerala accounting for very high levels of per capita income. Also, urbanization has a more explanatory power for output growth in 2011, as compared with 1991, with implications for a potential divergence between states if the more urbanized states continue to grow faster than others.
Urbanization and sector-wise contribution to GDP of India
India’s globalization has been measured by pre (i.e., before 1991) and post (i.e., after 1991) periods. There are two indicators used for this measurement: (a) internationalization of capital; and (b) internationalization of trade. The internationalization of capital is measured by the inflows and outflows of foreign direct investment (FDI) or the share of flows in GDP. The internationalization of trade is measured by the degree of openness to foreign trade (i.e., exports and imports).
India launched a policy of economic liberalization in 1991. During the post-liberalization phase, the importance of cities and urban centers has been increasing with respect to the economic development of India. However, with increased economic growth, prosperity is being concentrated in cities and urban centers, while at the same time, rural–urban gaps related to income and salary levels and employment opportunities are widening (Bhagat, 2011). This could be attributed to globalization, industrialization and economic development.
The proportion of urban population had not spread much in the backward regions of several states such as Bihar, Rajasthan, Odisha, Madhya Pradesh, Andhra Pradesh and many northeastern states. It was mainly progressive in the industrial and agricultural states of Maharashtra, Gujarat, Tamil Nadu, Karnataka, Kerala, Uttar Pradesh, Punjab and Haryana (See Figure 5). A natural increase of urban population, in-migration from rural areas and smaller urban places and expansion in urban boundaries that include adjacent towns and villages contributed to the rapid growth. Reasonably, southern India is more urbanized than its northern counterpart. Coastal areas are characterized by a higher degree of urbanization due to the development of port areas, industrialization and commercialization.

Urbanization and sector-wise contribution to GDP of selected states in India, 2011.
Between 1901 and 2016, the share of manufacturing sector in the gross domestic product (GDP) in India increased from less than 5% to around 15%, while participation in the services sector increased substantially from 25% to almost 70% (Sivasubramonian, 2000). For 2011, the level of urbanization and the share of GDP in the industry sector across the states of India show that there is no positive relationship (See Figure 6). However, as shown in Figure 7, the level of urbanization and the share of GDP in the service sector across the states of India show that there is a strong positive relationship (the r value is 0.707564).

The relationship between urbanization and share of GDP in the industry sector, Indian States, 2011.

Relationship between urbanization and share of GDP in the service sector, Indian states, 2011.
Post economic liberalization (1991–2011), millions of cities have registered an extraordinarily significant increase in their numbers from 23 to 53 cities while adding nearly 53 million residents over a short span of 20 years. The interior cities have developed very fast together with port cities. Surprisingly, the Indian megacities have registered a slow growth rate, as per the 2011 census. The fastest growth rate is recorded in which they recently joined the club of million-plus cities in the 2011 census. On the other hand, cities such as Malappuram, Vasai-Virar, Thrissur, Kannur, Kollam, Ghaziabad and Kozhikode, which have achieved a growth rate of over 100% in the last decade due to jurisdictional changes, natural growth and migration, have recently joined the club of million-plus cities, as per the 2011 census. They also achieved growth due to the expansion of their municipal boundaries resulting in their designation as urban agglomerations.
In addition to this, FDI flows play an important role in strengthening the metropolitan areas in terms of economic development. The states that are already developed with a high competitiveness index and a higher percentage of FDI flows include Maharashtra, Delhi, Gujarat, Tamil Nadu and Goa.
Summary and conclusions
This paper has explored the trends and level of urbanization, temporal variations and urban growth in the Indian context. The process of urbanization in India has been rather slow over the last two decades. The main reasons for this slow urbanization in India are the high growth rate of rural population and problems of urban census definition. The population of India has risen from 238 million in 1901 to 1,210 million by 2011, of which the rural population constitutes 833.1 million, and the urban population 377.1 million. In absolute numbers, there is an increase from 90.97 million and 90.99 million people in rural and urban areas, respectively, in 2011.
The study provides an overview of India’s urbanization and explores the changes in India’s urban scenario, based on the 2011 census data. The number of urban agglomeration cities in India has grown from 1827 in 1901 to 7935 in 2011. One of the important trends, as revealed by 2011 census, is the increased rate of urbanization and the emergence of more than 2500 new census towns (Sarkar, 2019a). The emergence of new towns is one of the essential factors underlying urban growth in India. It has been observed that cities of other categories, excepting Class I, have shown a continuous fall in their growth rates. However, according to the 2011 census, the expansion of Class I cities has slowed down. Nevertheless, post-independence in India, the urbanization process has been entirely dominated by Class I cities.
In India, there existed no clear relationship between urbanization and per capita GDP for the period 1991–2001. It was mostly because Punjab and Haryana were among the wealthiest states in 1991, and were also less urbanized. However, by 2011, there is a definite positive relationship observed between urbanization and growth, with the more urbanized states like Maharashtra, Tamil Nadu, Gujarat and Kerala accounting for very high levels of per capita income. Also, urbanization has a more explanatory power for output growth in 2011 as compared with 1991. The proportion of urban population had not spread much in the backward regions of several states such as Bihar, Rajasthan, Orissa, Madhya Pradesh, Andhra Pradesh and many northeastern states. It was mainly progressive in the industrial and agricultural states of Maharashtra, Gujarat, Tamil Nadu, Karnataka, Kerala, Uttar Pradesh, Punjab and Haryana.
Finally, it can be concluded that urbanization of India reflects a structural change in the economy, but not as quickly as one might have expected. It appears surprising that the urbanization process slowed down at a time when it was expected to accelerate. Economic reforms have not been uniform in India because of faulty national economic policies that have discouraged the growth of urban employment. However, some developed states such as Maharashtra, Andhra Pradesh, Gujarat, and Tamil Nadu have experienced a positive impact on urban economic growth because of agricultural and industrial development. Economic reforms for accelerating the urbanization process are necessary through the promotion of small and medium-sized urban areas, human capital, socio-cultural mobility, and the formulation of effective plans for promoting eco-friendly green cities in India.
Footnotes
Acknowledgements
The author would like to thank the reviewers for their valuable comments and suggestions and special thanks to Prof. C M Lakshmana, Dr. Pamela. Deb and Mr. Azhar Khan C A, for their moral support and motivation, who drove me to give my best.
Funding
The author received no financial support for the research, authorship, and/or publication of this article.
