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12/10/2020 - Government Policies

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October 12, 2020

A small change in defining urban areas can have a far-reaching impact on the ease of living and economic development of the country. Analyse (200 Words)

Refer - Financial Express

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IAS Parliament 11 months


·       There are two main ways to define urban areas. One is a statutory town, which includes all places with a municipality, corporation, cantonment board or notified town area committee. These towns are defined by state governments and place India’s urbanisation rate at 26.7%.

·       Census, however, adopts three criteria to define what is urban. The three criteria are: i) a minimum population of 5,000; ii) at least 75% of the male main working population engaged in non-agricultural pursuits, and iii) a density of population of at least 400 persons per sq km

·       This definition skews the policy maker’s attention and budgetary allocation, which is not in tandem with the ground realities. There is growing evidence—mostly from satellite imagery—that India is way more urban than the 2011 Census estimate.

·       There are some clear benefits. First, the budgetary allocation will reflect the reality and scales will balance between rural and urban areas. Second, the urban areas will not be governed through rural governance structures of Panchayati Raj Institutions. Third, we can avoid the trap existing cities face, devoid of basic urban infrastructure.

·       The sewerage networks, fire services, building regulations, high-density housing, transit-oriented development, piped drinking water supply, among others can be provided in areas which otherwise would continue to operate as rural areas. Post-Covid, there is an urgent need to expand our investments in the urban areas—housing, transport, medical facilities, among others.

·       Fourth, these newly defined urban areas could act as a new source of revenue for funding local infrastructure development through municipal finance sources such as property tax and development rights. This would ease pressure on state finances. Lastly, the rethink of urban definition would have an impact on the regional and national economy.

·       As more people continue to depend on non-farm incomes, this change in definition will usher in new economic opportunities. A rethink of urban definition in Census 2021, particularly with some degrowth in urban areas due to Covid, will bode well for India for coming decades in more ways than one. 



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