India & Urbanization

One in every 25 indians lives in Delhi or Mumbai. Add Kolkata to it and the figure comes down to 20. Nearly 50 million Indians live in these 3 cities. This is larger than populations of most European countries, or even Australia.

But as a nation, we are reluctant urban.

To be politically correct, you have to say that ‘India is a country of farmers’. The truth of course is far from that. India is actually a country of farm labourers. Nearly 65% of india’s population is engaged in farm related activity in villages. They account for 20% of India’s economic output. And that is why they are poor. Just too many people farming a land area. Again, on paper India has the largest land area under cultivation. But much of that is farce because the land under irrigation is much smaller. As for the land under irrigation, output per unit of land is much lower than in China. In many areas where farmers are reluctant to give up their land for industry, the landholding is roughly an acre (87,000 sq ft) per owner – the size of a kitchen garden! What farming are we talking about?

In the earlier decades, we killed our textile industry much before militant trade-unions hammered the final nail. The government thought textile to be important industry for growth and jobs. Its socialist policies thought it necessary to intervene, and in turn needed the size of each textile manufacturer to be limited. As a result, we nurtured our textile industry into utter un-competitiveness and allowed other countries to catch up, shrinking our share in the world market from more than a third to a less than 1.5%.

This reminds me of a famous international institutional investor saying “China is what it is because of its government, and India is what it is in spite of its government”.

Now we are probably doing that to our farms. Subsidies, more subsidies and loan waivers. For any vibrant economy, the uncompetitive methods need to die and pave way for the more efficient ways. We need efficient farms, to improve farm productivity. We need industrial and city jobs for today’s village folks – the only way to improve their earnings and standard of living. That would need vibrant cities.

But we are still living in a state of denial. Our governments are ashamed of committing funds to make our cities capable of handling more people, more efficiently. Every now and then, erupts a politician pretending to speak for the villages.

Good quality of life is a good thing– and everyone would acknowledge it. Once upon a time, villages provided that. Today villages are in bad shape. Our villages lack basic amenities. To laud village-life as virtuous in current times, while demonizing cities, is self-denial. Denying that the only way to lift a billion people's lives lies is in urban centres.

We need many more Mumbais and Delhis.

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