Understanding the Urban Challenge

Compared to other areas of economic analysis and policy focus (such as economic growth, employment, poverty, foreign trade and payments, public finance, agriculture, industry, rural development and social sectors), issues of urban development have suffered relative neglect in India. Five-Year Plan documents paid scant attention to the field until the 1980s. It was not until 1992 that the 74th amendment to the Constitution empowered urban local bodies in the economic and social governance of the nation. And it was only in 2005 that the Jawaharlal Nehru National Urban Renewal Mission imparted a serious and long overdue national policy thrust to this area. Unsurprisingly, those who devoted time and attention to this field, including the editors and contributors to the volume under review, had to struggle with a pervasive lack of reliable data in the many dimensions of urban development in the country.

Of course, this relative neglect of urban issues in analytical and policy domains did not stop the normal process of economic development and structural change in the country under which the shift from rural to urban habitations is an intrinsic part of the process. As incomes rise, the relative role of agriculture shrinks, while that of industry and services rises. And, the world over, these non-agricultural activities prosper best in urban areas, which nurture the economies of scale, scope, connectedness and proximity (the so-called economies of agglomeration).