The contribution of urban population to national GDP is likely to register 16% growth and touch 70 per cent by 2011 from current level of 60 per cent in view of rising job opportunities that will be provided by major metros and large cities as these will have emerged as major epicenter for larger economic activities for domestic and overseas businesses, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
In a Paper on `Urban India: Growth, Opportunities & Difficulties', it has been pointed out that metros and large townships in next 5 years will have ample of infrastructure and adequate input access to industrial renaissance. This will result for higher urban per capita income which will rise by minimum of Rs.10,000 per annum and touch Rs. 36,000 per annum by 2011. Currently, the urban per capita income is estimated at.26,000 per annum. The per capita income during 2005-06 has been estimated at Rs. 25,500 per annum which stood at Rs. 23000 per annum in 2004-05.
Commenting on the Paper, ASSOCHAM President, Mr. Venugopal N. Dhoot said, the major cities including metros will offer multifaceted job opportunities to a large number of job seekers and qualified professionals in areas of IT, ITEs, manufacturing, services and biotechnology. These cities will be Delhi, Mumbai, Chennai, Haryana, Bangalore, Haryana, Hyderabad, Uttar Pradesh, Kolkata followed by other emerging states like Kochi, Pune, Ahmedabad, Chandigarh, Dehardun and Jaipur.
Table 1
| YEAR | URBAN POPULATION CONTRIBUTION TO GDP |
| 1951 | 29 |
| 1981 | 47 |
| 1991 | 55 |
| 2001 | 60 |
| 2011 (estimated) | 70 |
With almost 300 million Indians living in urban areas, India has the second largest urban population in the world. Urban population comprises about 28 per cent of the total population and accounts for more than 90 per cent of the government revenues.
According to ASSOCHAM Paper, The share of urban population in total population had grown from 25 per cent in 1991 to 27 per cent in 2001 is expected to further increase to about 30 percent by 2011. In 1991, India had around 3768 towns and cities the number of which went up to 4368 in 2001 and will further rise to over 5000 by 2011. The reason for significant rise of urban India population is the growing economic activities, improved infrastructure facilities and massive job opportunities in the major cities and the emerging metros. Employment in urban areas registered a growth of around 38 per cent (over the last decade), substantially exceeding the rural employment growth rate of around 16 per cent.
Urban India Population
| Year | Urban Population (in Million) | Urban Population as % of total Population | Number of UAs/Towns |
| 1951 | 62.4 | 17.3 | 2,822 |
| 1961 | 78.9 | 18.0 | 2,334 |
| 1971 | 109.1 | 19.9 | 2,567 |
| 1981 | 159.5 | 23.3 | 3,347 |
| 1991 | 217.6 | 25.7 | 3,768 |
| 2001 | 285.9 | 27.8 | 4,378 |
| 2011(estimated) | 367 | 29.75 | 5000 |
While the Government has set up Jawaharlal Nehru Urban Renewal Mission with Rs 1 lakh crore outlay to cover 60 cities with a million-plus population in the next seven years, an additional investment of Rs. 1 lakh crore will be needed for the growth of urban India for improved infrastructure, housing and sanitation facilities. In view of ASSOCHAM, the annual investment needs for urban water supply, sanitation and roads are estimated at about Rs. 28,035 crores during the next ten years. However, the amount that will be required for urban transport infrastructure investment in cities with population 100,000 or more during the next 15-20 years would be of the order of Rs. 207,000 crore.
In spite of this rosy picture, the ASSOCHAM Paper highlights that urban infrastructure facilities face serious problems due to population pressure, deterioration in physical environment and quality of life. According to estimates, nearly one third of the urban India lives below poverty line. About 15 percent of the urbanites do not have access to safe drinking water and about 50 percent are not covered by sanitary facilities. Traffic congestion has assumed critical dimensions in many metropolitan cities due to massive increase in the number of personal vehicles, inadequate road space and lack of public transport. There is a huge and widening gap between demand and supply of essential services and infrastructure. Urban poor in India are forced to live under unhygienic conditions in slums, lacking in basic amenities. Slums have grown in almost all major cities due to inability of major chunks of population to afford accommodation in planned areas of the cities.
ASSOCHAM has also recommended that there is a need for urban reforms in the sector. The private sector investment for provisions of urban infrastructure can not take place unless a proper legal and regulatory framework for such investment is created and developed which ensures a full cost plus recovery of such investment. This calls for innovative reforms in municipal tax structure and user charges, taking into account poor paying capacity of a sizeable section of urban population.
The Chamber Paper concludes that in order to crystalise the development of urban infrastructure, though the government has allowed 100% FDIs under automatic route for housing and urban infrastructure, it should take a similar bold decision in another areas so that the flight of foreign capital becomes easier to meet domestic needs.
