A new UN report projects India’s urban population to rise by 404 million by 2050, the largest such addition globally. This is not entirely unexpected—as per Census 2011, India was on an urban climb between 2002 and 2011, with the urban/rural distribution of population increasing from 27.81%/72.19% (Census 2001) to 31.16%/68.84%.However, this could be overwhelming to manage. Census 2011 found, despite the increase in number of births in rural areas, the population growth in rural areas declined; it remained nearly constant in the cities. Thus, it is safe to assume that rural-to-urban migration surged during the census period. Given how India still has 857 million people living in villages, if such migration continues, the pressure on both resources and access to these (through income) could become debilitating for existing urban centres—the UN report projects Delhi alone to add almost 11 million to its existing 25 million inhabitants by 2030.
Such a leap in urbanisation thus necessitates the creation of new cities, preferably by developing the satellites of metropolises and upgrading mid-size cities to accommodate the influx. The government allocating R7,600 crore in the FY15 Budget towards the creation of 100 smart-cities broadly reflects this approach. However, this spending would mostly be on infrastructure needs. With the demand for employment outside agriculture, a sector that remains largely rural, set to surge rapidly—Crisil puts it at 52 million jobs by as early as 2019—these cities must become the loci of non-farm jobs. Given how the right investment climate can create these non-farm jobs, for urbanising smoothly, India needs reforms in nearly all aspects of doing business—from labour and land acquisition to taxation and regulatory oversight—as much as its needs better infrastructure.